5 Tips for Using Wedding Gift Money
Congratulations on tying the knot and embarking on a new journey as a married couple! As you settle into this next phase of life, you may find yourself with wedding gift money from your loved ones. Here are our tips for how to use this wedding money to build a strong foundation for your future together.
1. Pay Off Debt
Use your wedding gift money to pay off debt to set you and your spouse up to help achieve your long-term financial goals. Paying off debt relieves a big burden and opens up extra money each month to save for the future. Prioritize your wedding gift money to pay off high-interest debt first — think credit cards and loans with high annual percentage rates.
Discussing debt with your new spouse can feel daunting, but there are many ways to learn how to manage and pay off debt as a couple.
2. Spend Some of It
Since it was a gift, spend some of it to celebrate your new life together. You could use some right away or set it aside for a fun savings goal like a long-weekend getaway. Decide together on an amount that you can freely spend while devoting the rest to knocking out some of your other money goals.
3. Save It for a Rainy Day
Unexpected expenses are something that many Americans struggle to cover. Knowing this, it’s a good idea to save some of your wedding gift money for an emergency fund. You never know when you could be surprised with expenses like a car repair, medical needs or even a job loss.
Tip: Start saving by opening a designated savings account, depositing some of your wedding gift money and setting up automated transfers so that you’re saving on a regular basis.
4. Save for Retirement
Putting wedding money toward retirement can help you set the foundation for a solid nest egg when the time comes. Remember that while you can borrow for a house, a car or a return to school, you can’t take out a loan for retirement — so, the earlier you start saving, the better. If you don’t have a retirement account from your employer, you can set up an individual one such as an IRA or Brokerage Account.
5. Save for a Down Payment on a House
Consider putting your wedding gift money towards saving for a down payment on a home. The more you can save, the smaller your monthly payments will likely be. And if you can afford a down payment of at least 20 percent, you won’t have to pay private mortgage insurance.
When deciding what to do with your wedding gift money, be savvy — it will help you and your new spouse build a sound financial foundation for your life together. While you don’t have to put it all toward your future, putting away part is a good step in the right direction. Your future selves will thank you.
Combining finances or keeping them separate after you're married — a Financial Wellness Review can help point you in the right direction.