It’s a joyous occasion when a child gets married, and the last thing you want is for the event to be derailed by financial stress. But with the average wedding costing more than $30,000, it can be hard not to feel overwhelmed.
“People want to help all they can, but everything has to be within their means,” says Matt Reiner, chief executive officer at financial advice website Wela. “There needs to be a balance.”
Here’s how you can contribute to your child’s big day without sidelining your own savings goals:
Treat it like retirement
Trevor Ewen, who writes the personal finance blog Pear of the Week, recommends saving for your child’s wedding the same way you would approach saving for retirement.
“It’s the same basic concept,” Ewen says. “You have a certain amount of money you’re making, you’re putting it away for a fixed event in the future and you are taking on less risky assets as you’re approaching the event.”
The amount of risk you undertake with your investments should align with the time frame of the wedding. If you’re planning years in advance, you have the option to utilize high-risk—but high return—vehicles such as stocks. Alternatively, if you only have a couple of years before your child ties the knot, you may want to consider safer investments such as bonds and money market accounts. Ewen says with those safer channels, you can anticipate about a 3 percent annual return.
“It’s about growing what you have in the safest way you can,” he says.
Track your spending
Reiner has found temporary “economic shutdowns” to be helpful for determining how much money you can set aside in a limited timespan.
“Basically, you plan every single purchase ahead of time, and it makes you think about where all of your nickels and dimes go,” he says. “This system can be a good way to get you to think about money and get the savings process started.”
While this approach can help you determine what you can afford to save, don’t feel pressured to set aside every spare cent to cover the wedding. “Keep in mind what the wedding is about,” Reiner says. “It’s more about the marriage than the event itself.”
Settle on a fixed amount
Ewen recommends setting a fixed sum that you will contribute to the wedding. If you agree to supply a percentage of the funds, it can be difficult to plan for a specific number. It’s easier to tell the couple the exact dollar amount you can provide at the outset and let them create the wedding budget from there.
“Set that goal,” Ewen says. “And if you’re having a particularly good investing year and you’ve reached your target goal, you should feel comfortable withdrawing your funds from the market.”
This approach also sets the same expectation for all of your kids, which Ewen says can help minimize conflict down the line.
Finally, remember that any amount you contribute will be helpful. It’s all about keeping it in perspective and resisting the pressure to be extravagant.
“Life will allow for different things for different people,” Reiner says. “So it’s okay to spend within your means.”