“I had a wedding and we received quite a bit of money gifts from family and friends. How can we best use it?”
In many cultures, the idea of getting anything other than a money gift (or “busta” as it is often referred to among Italians and other Europeans) is uncommon. Absolutely, those close to the couple can and do buy gifts, but a money gift given at the wedding reception is customary. In fact, couples often set out a decorative box to collect the cash filled envelopes at the reception receiving line (and it goes under heavy guard by a key designates…brides father…uncles, etc).
So what to do with the money collected is a great dilemma! Here’s key tips that the bride and groom would do well to consider, as put forward by our personal finance guru.
Do Use Money Gifts From Your Wedding to…
Pay off your higher interest debt. If you’ve incurred any credit card debt to pay for your wedding, start by using your wedding day cash gifts to pay those off.
Pay for the costs of setting up a home together. Although many these days have lived on their own before getting married, some people have not. If you’re living outside of your parents’ home for the first time, use some of your wedding day cash to purchase needed household supplies. Make your gifts of money last by avoiding high-priced designer brands, and stick to budget brands that are made with high quality and will last for a long time.
Pay down your student debt. The longer you carry student debt, the more interest you’re going to pay. If you have any wedding day money left over, consider using it to pay down your student loans. Getting rid of this financial noose around your neck will make you feel financially free and help get your married life off to a happy start!
Invest – if you’re in the vast minority, you’re well established financially when getting married, and any money made from wedding money gifts can be used to splurge. But for the rest of us, establishing RRSP’s or TFSA’s is one of the best places to start (along with a monthly contribution plan). Oh, and a secret, people that are well off (and self made) are typically very aware of how to manage money, and already know a lot about what NOT to do with it…
Do NOT Use Money Gifts From Your Wedding for…
The don’t list, like it or not, comes down to one piece of advice. Whatever you do, don’t consider your wedding day cash gifts as a windfall to blow on short-term gratification (unless you honestly are starting out so well off that you can afford to do so!)
For most of us, money will be tight after the wedding, and that can lead to stress between you and your new spouse. Avoid that problem by not spending your wedding day gifts of money on frivolous things such as lavish honeymoon upgrades, a new car (when your old one is still able to do the job just fine), or a down payment on a house whose mortgage payments will put a financial strain on you.
Here’s a BONUS money management tip that 99.99% of you will not take, but should:
Take a personal management finance course or counseling (from someone qualified). You’re not after a degree or diploma here, but personal financial counseling for couples is invaluable. If you take away 1-2 principles from any training or counseling, you’ll reap a lifetime of benefit. Oh, and the number one thing married couples fight about? MONEY
! Money management is a joint effort, but it’s perfectly fine if one partner takes the lead and manages the money. After all, certain partners are better at certain things. As with anything in marriage, trust is vital.
Use Money Gifts From Your Wedding to Plan for a Solid Financial Future
If you choose expenditures wisely, your wedding day gifts of money can turbo-charge your financial future as a newly married couple. Once you’ve paid down your debts, and all other necessary expenses that come with starting a new life together with your spouse, sit down together to discuss your joint and individual financial goals. Strategize to come up with a financial plan for these cash gifts that will set you both on the path to financial wellness. Maybe the best use of any leftover cash is a downpayment on a home with affordable mortgage payments. Maybe the best use of it is to buy the furniture that you need for your home together. Whatever it is, the best way to handle this is to sit down together and come up with a solid plan.