Saving for a wedding is no joke! This is especially true if you and your partner are young 20-something year olds still early in your careers with little to no savings. Never fear! I’m sharing tips for those asking how to save for a wedding in a year.
As I’ve gone about planning my own wedding, I’ve been shocked time and time again just how expensive it is! It seems like as soon you even mention the word “wedding”, each vendor marks up their prices 300% from what any normal person would reasonable expect to pay. A few thousand dollars here, several hundred dollars there, it all adds up!
Think I’m exaggerating? According to CNBC wedding costs have increased about 17% over the last 4 years from an average of $24,700 in 2019 to an average of $29,000 in 2023.
However, if you want that large fairy-tale wedding, don’t give up on your dream just yet! My fiancé and I managed to save for our wedding in the span of a year by following these 9 simple steps:
1. Talk About Money
Is it still taboo to talk about money? Well it shouldn’t be! It’s 2023 y’all!
As a a financial planner and a CPA, my fiancé and I talk about money A LOT. Admittedly, we’re both a little obsessed about it because we see it as a path for achieving our goals.
That’s not to say you have to talk about it every day or even every week, but you should be having discussions up front regarding how much you make, what are your expectations with money, will you combine your finances once married, etc. You get the point.
Although talking about money doesn’t directly translate into savings, having the knowledge to make educated financial decisions and create a plan is a vital first step to achieving any large financial goal.
2. Reap the Benefits of Dual Income
I think this one goes without saying. If you want to have any semblance of savings, you first need a source of income. And what’s better than a source of income?
You guessed it- two sources of income! If both you and your partner are working and making money, you’ll be able to save SO much faster than you would alone.
Another thing to keep in mind is if you feel you’re being underpaid, think about asking for a raise or switching jobs! Salary information can be obtained from a quick google search. Use this information to your benefit, either by presenting it to your current employer when asking for a raise or knowing which salary range would be appropriate if you decide to seek out a new job entirely.
My fiancé and I both switched jobs roughly 6 months before we got engaged. I received a bump in pay of about 13% and he received one of almost 50%! I don’t want to understate what a HUGE impact it’s had on our ability to save for our wedding.
3. Put Wedding Savings Into A High Yield Savings Account or a Money Market Fund
One thing to keep in mind as you’re saving is the fact that you’ll need your funds readily accessible, since you’ll be withdrawing those funds in the immediate future. Hence, I DO NOT recommend investing that money in stocks, bonds, or CDs because you could potentially lose that money or be unable to access it without penalty.
Similarly, I caution you to be thoughtful of how much you save for retirement during this time; you should continue saving for retirement, but I would not recommend withdrawing retirement funds to pay for your wedding because you could be subject to early withdrawal penalties and additional taxes!
Instead, consider a high yield savings account or a money market fund. Personally, I use Fidelity’s SPAXX, which has a 7-day yield of 4.98% as of 9/22/2023 per Fidelity.
Although interest income may be taxable, high yield savings accounts or money market funds can provide substantial income. For example, if you invested $25,000 in SPAXX, your monthly interest would be $103.75 ($25,000 x 4.98% / 12), or $1,245.00 on an annualized basis. Of course, the interest rate will fluctuate, so you won’t be locked in at the 4.98% rate for the full year.
However, despite the fluctuating interest rate, an advantage of these investment vehicles is the option you have to withdraw your money at any time. This is extremely valuable when you have large expenses coming due, as is typically the case with wedding costs.
Moreover, another consideration when choosing an account is whether your investment is FDIC insured. If your investment is FDIC insured, the amount you’ve deposited is backed by the U.S. Federal Government up to $250,000.
As a side note, if you’re highly risk averse and don’t feel comfortable investing in the stock market or other risky investments, high yield savings accounts or money market funds may be the right investment options for you even after your wedding. To discover my approach to investing and why I enjoy investing in stocks, check out my investment philosophy.
Ok, so now that you’ve placed your excess cash in a high yield savings account or money market fund, it’s also important for you and your partner to agree on how much you will each contribute towards the wedding. For example, you may decide to split the costs 50-50 or follow a 70-30 allocation, with the person earning a higher salary contributing more. You may decide to set up one account that you both have access to or maintain your own separate accounts. This goes hand in hand with tip #1: talk about money.
4. Plan Cash Flows, So You Can Pay Bills as They Become Due
This step is an important part to building healthy money habits even beyond your wedding. Debt can so oftentimes be crippling, especially credit card debt which oftentimes charges high interest rates! Not only can it be hard to get out of debt, it affects your credit score too, which make it significantly more expensive to buy big ticket items, like a car or a house, if you plan to take out a loan.
I’ve heard stories of people who took out loans to pay for their wedding. Fast forward a year and they’re divorced and still paying off the loan from their wedding for years to come.
Under no circumstance would I recommend taking out long-term debt to pay for your wedding! Your wedding is just one large expense in your new life together. There likely will be lots more to come; this may include buying or renting a home, starting a family, or going back to school for an advanced degree or job change. These are all important considerations before taking out a loan to pay for your wedding!
Although any prudent financial advisor will tell you to save an emergency fund and plan for the unexpected, it’s also important that you plan for the expected. As you begin selecting vendors for your wedding, you’ll be presented with payment schedules, showcasing the timing of when each payment is due. Some of these (like the one for your venue) can be quite large. I’m talking potentially tens of thousands of dollars! For this reason, it’s vital that you plan out your cash flow needs, so you can ensure you have enough money saved in your account to cover these costs as they become due.
5. Delay, Delay, Delay Expenses
Any business will tell you a trick to managing cash flow is delaying expense. Why? It’s all about time value of money, baby! So why not operate your personal finances the same way? After all, I already let you in on my secret to growing your wealth by keeping your cash parked in a high yield cash savings account or money market fund!
One way I delayed expenses – even before I was engaged and saving for a wedding – was by living at home with my parents rent-free for 4 years after I graduated college!
I understand many parents will not let their kids live rent-free, but if yours are or if they’re willing to charge you below-market rent, it might be a worthwhile delay of gratification. Of course I didn’t want to be living with my parents! But I was able to save tens of thousands of dollars and pay off both my car and my student loans in those 4 years. Was it my ideal scenario? Absolutely not! But did it set me up for long-term financial success and help contribute to the ease with which I was able to save for my wedding? You betcha!
Again, I understand this option isn’t available to everyone, but being mindful of how you can delay unnecessary expenses, big or small, can be largely beneficial from a financial standpoint.
6. Eliminate Unnecessary Expenses & Enjoy At-Home Date Nights
Even better than delaying your expenses is eliminating unnecessary expenses. This might include foregoing discretionary clothing purchases or planning date nights at home, instead of going out! I understand this one might be a tough sell, but believe me, you can save a crapload of money by hunkering down with your significant other at home!
According to the Bureau of Labor Statistics, the average American spent over $3,600 in 2022 dining out on food. And in areas with higher costs of living, you can bet this figure will be even higher! Furthermore, this figure doesn’t include alcoholic beverages. So if you typically order a cocktail with your meal, you can expect your annual dining bill to be even higher.
Once we got engaged, my fiancé and I began to take full advantage of date nights at home, including cooking meals together. Last week, for example, we bought pre-made pizza crust, pizza sauce, and mozzarella cheese and made our own pizzas.
Total spend amounted to $6 per pizza, or $12 for two medium-sized cheese pizzas. Whereas if we had went to a restaurant for pizza, we would’ve spent $22 – $35+ for two medium-sized cheese pizzas.
If you make your own pizza once a week for a year as opposed to ordering it out, your annual savings would be somewhere in the realm of $520 – $1200+.
After we finished cooking the pizzas, we sat down to a movie and enjoyed the spoils of our labor. There’s also lots of great free date night ideas online! Here’s a list from Kim + Kalee, which I love.
7. Use Credit Cards That Pay Out High Cash Rewards
As I mentioned above, you’ll surely have large expenses with associated with vendor payments. These include deposits, which may be in the range of a couple hundred or a couple thousand dollars.
Help offset these cost by using high cash rewards credit cards! Once available, cash out those reward points and deposit them directly into your high-yield wedding savings account.
You can also follow this approach with non-wedding purchases as well! It shouldn’t generate much (unless you’re spending a lot, which gives rise to other issues), but a little bit here and there goes a long way!
I want to caveat this by saying that although high reward credit cards can be beneficial if used properly, they often charge high interest rates if you miss a payment or pay after the due date. With that said, you should only take advantage of this tip if you can successfully follow tip #4 above, pay bills when they become due.
And if you’re thinking of opening a new credit card, definitely check out NerdWallet’s rating for best cash back credit cards of September 2023.
8. Ask for Cash as a Bridal Shower or Wedding Gift
This is incredibly commonplace today, but it’s still worth mentioning! Just because a loved one gives you a cash gift for your wedding, doesn’t mean you can’t put it towards your wedding! Offsetting your wedding costs with cash gifts can be an effective way of affording your dream wedding while warding off unwelcome debt.
Say you invite 50 people to your bridal shower and 100 people to your wedding. Assuming each individual person gives you $100 (hopefully a conservative estimate), you’ll have received $5,000 from the bridal shower and another $10,000 from the wedding. That’s $15,000 total! And better yet, you should have this cash available by the time the majority of your large bills become due, depending on the payment method you use.
9. Create a Wedding Budget (and Stick to It!)
Lastly, I strongly recommend creating a wedding budget. A wedding budget will give you an idea of what you can expect to spend on each vendor to help keep the total cost of the wedding within reason. As you select vendors, it’s important to keep your budget in mind and stay within your predetermined limits.
And I’ll be the first one to tell you that I did not practice what I’m preaching – I completely blew my own budget out of the water!
That said, it’s important to be realistic about the costs and what you can actually contribute. To help with this I created my own wedding budget template free to members of TCC Club.
If you’re not a member, but would like to join and gain access to exclusive content, including my wedding budget template, please subscribe to the newsletter by submitting your information in the form at the bottom of this page.
My wedding budget template is a comprehensive guide for planning your wedding expenses. From estimating the total costs of your special day based on location and guest count to providing you with a guide as you begin to select vendors and make payments, the wedding budget template is a MUST for any bride or groom-to-be.
Want More Wedding Inspiration?
Are you getting married soon? Interested in more-wedding related content? Check out my other posts: 3 Fall engagement outfits plus stock picks and the true cost of being a bridesmaid.