Giving Your Daughter the Wedding of Her Dreams

by | Sep 14, 2022 | WWC WorthWhile Reading


Every significant milestone holds financial implications. As a parent, you think about what the future may bring for your child. We set budgets and plan for their back-to-school clothing and supplies, upcoming birthday’s, Halloween costumes, and for their education. Then we plan for one of your child’s most monumental milestones, and likely the last one you will be 100% responsible for, before your child starts planning for their own children.


Here are a few tips on how to give them a magical day:


You Smile When the Dream Becomes a Reality


Does the thought of planning your child’s dream wedding make you smile, or does the financial stress make you cringe? Maybe you haven’t thought of it at all because you thought you’d avoided that obligation. Well, times have changed, and now everyone has to play their part – whatever that looks like for your family.


The first step in making plans to give your child the wedding of their dreams is establishing clear expectations. You need to understand what your child is hoping to receive from you, and your child needs to understand your commitment to them. Unfortunately, many parents become so overwhelmed when planning their contribution that they fail to connect with what their children may want or need. Sometimes, despite paying the bills, parents forget how to budget for such a large event. And while it can be hard to remember at that moment, this day is for them and should be focused around what they want in that day.


Prepare Your Wallet for Fancy Invitations and Exquisite Decorations


The next step is to start saving if you haven’t already. Remember that one dollar today will be worth a lot less in the future, especially with today’s increasing inflation levels. Determine how much you can contribute to this wedding, and consider helping your child set a budget.


Whether you plan to cover the entire event or plan to set a budget and leave it up to your very financially savvy child to pay for the rest, every wedding requires a decision on food, flowers, photos, entertainment, location, accommodations, decor, attire, the reception… to name a few! Let’s not forget that the price increases depending on the number of guests you invite. Since you do not know what your child will want and how extravagant or minimalist, they’ll want it to be, come up with a baseline for each component of the wedding:


  1. Food/drinks – We all know that food and beverages are among the most important parts of the wedding. Do you want your child to have top-shelf alcohol and an extensive food assortment? If so, come up with a reasonable dollar amount per person.
  2. Entertainment (because we all know getting people on the dance floor is key for a successful wedding) – A live band will be the most expensive and the price can quickly increase, while a DJ may cost significantly less. Decide what you would want to cover yourself.
  3. Allocate a portion to location – This may be simplest by deciding on a fixed amount, as the cost can fluctuate significantly based on the venue and whether food is included in the price per person.
  4. Allocate the remaining portion to all other items. This bucket may be more than the first three items combined and depends on your child’s preferences.


Set It Up – A Wedding Investment Account 

Once you have set your budget, start contributing money to an investment account and put that money to work. For compounding interest to be most effective, allocate a fixed amount to your account each month. Depending on the time frame, this account can grow significantly. It should also be noted that these funds should be separated and earmarked for this event and not comingled with your personal investment funds. While it can be within the same account, the amount you’ve budgeted for your child’s wedding should be treated independently for these savings to be implemented as planned. Setting up these accounts and organizing your investments does not have to be as stressful as it sounds. Consult a financial advisor who can guide you and share advice regarding your decisions.


From a Dream to a Reality


Once the wedding is on the horizon, have an open and honest conversation with your child about what they may expect and how much you plan to contribute. Don’t be surprised if your child asks for money outright for a financial venture, like a down payment on a house or a contribution to their honeymoon.


Also, remember that you may also have a surplus of funding. After you reach your funding goal for the wedding, if you don’t gift the amount to your child, you may be able to use the remainder of the funds for your retirement. Remember, this is an account in your name, and you can do whatever you want with it, so it’s a perfect savings vehicle on its own. Regardless of how you use the funds, remember that this is one of the most memorable days of their lives, and you may still have a small nest egg left over when all is said and done.




This commentary was originally posted by Carol Dixon, CFP®






**Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.