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By Stephen Sellner | Citizens Bank Staff
Weddings are expensive. Any engaged or married couple knows that all too well.
Fortunately, many wedding guests today give gifts of cash! After all, most of your registry will have been bought for you between the wedding shower, holidays, and birthdays that occurred during your engagement. Some couples even forgo the gifts altogether and set up a cash registry. Regardless, you could be opening up some serious green after the wedding dust has settled.
So how can you make all this cash count?
Your savings could probably use some tender loving care, now that you’ve forked over $100 a plate for guests like your distant cousin’s questionable plus-one. So why not use a chunk of that wedding windfall to restock the shelves of your savings pantry?
With the average U.S. wedding costing north of $33,000, it’s possible you took out a loan to help cover the cost. If that’s the case, use your gift money to pay this debt back first. That way you’re not paying off your wedding bill if/when kids come into the picture. After all, the wedding was just the start of your journey; you don't want the cost of your wedding to hold up your other financial goals.
With wedding costs so high, you may have downsized your honeymoon to save money. Instead of the dream trip to the tropics, you may have opted for a weekend getaway that’s close to home.
But now that the checks are rolling in, you can afford an upgrade!
All of a sudden, the honeymoon in paradise is back on the table. Some couples actually prefer to book their honeymoon a few months after the wedding — known as a “later-moon” — to prolong the post-wedding high.
Were you hoping for a tropical honeymoon? Your wedding gift money could provide the funding you need to make it a reality.
Marriage is the start of a lifelong journey together. The next big step on that journey might be buying your first home. This wedding cash windfall could be the jumpstart (or the final push) you need to cover your down payment and closing costs.
You might think your down payment fund is in good shape, but did you know there are perks to putting 20% of the home’s purchase price down in cash? Not only does it mean borrowing less, but it could eliminate the need to pay mortgage insurance. Mortgage insurance is an extra monthly cost added to your mortgage payments that does not go toward lowering your principal or paying interest. So if your wedding money boosts your down payment up to 20%, then it could lower your monthly mortgage payments.
Already a homeowner? Maybe there’s a renovation project you’ve been meaning to tackle, but haven’t gotten to yet. Not only could your wedding cash improve your home, but it could raise its value as well. Or you could go the more practical route and replace that old couch you inherited from your parents.
Have retirement savings or other investments taken a back seat to wedding planning? That’s understandable. Fortunately, your gift money could get you back on track.
Gift money could be added as a tax-free contribution to each of your retirement accounts, or be used to open a new one. Just remember not to exceed yearly contribution limits — $19,500 for 401(k)s, or $6,000 for both Traditional and Roth IRAs.
Retirement might be a tiny blip on your radar at this point, but it’ll be here before you know it, and the gift money you contribute now should grow over the years thanks to compound interest.
Life’s too short to not treat yourself every once in a while. Your wedding gift money was just that — a gift! There’s no fault in using some of it on a “want” instead of a “need.”
So pick an amount that you’re both comfortable using for play. You’ll probably have an easier time using the rest on the smarter options above if you know you treated yourself first.
For instance, is a four-legged furry friend in your future? What about a shiny new addition to your home entertainment system? Find something you both can agree on and make it happen!
Your wedding can make you feel like all your money’s going out the door. Seeing money flood back in afterwards can be quite the shock. Wedding gift money is a great opportunity to get your finances back in order, move toward the next goal on your list, or even treat yourself, so take full advantage of this windfall. And remember, you’re married now — discussing and agreeing on any big financial decisions beforehand will only strengthen the bond.
Need help managing your finances after marriage? Our dedicated colleagues can help you navigate the future and reach your potential. To learn more, click here, please call 1-800-922-9999, or visit your nearest Citizens Bank branch.
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