If you're planning your 2022 or 2023 wedding, you may already be suffering from sticker shock. The Knot revealed the average wedding price tags in each state from 2020, ranging from $19,700 in Utah to $48,600 in New York. With inflation rising by more than 6%, many couples can expect to pay higher prices. There's no question that you'll need to save money to finance your wedding, but figuring out where to store your funds is a whole 'nother matter. Before you commit to any solution, it's worth evaluating your available options.
Savings Account Features
Some couples consider opening a joint savings account to put back money for the big day. As My Wallet Joy points out, it can help you keep wedding funds separate from your everyday living expenses. You can't automatically access those funds with a debit card, which can prevent you from spending what you've squirreled away.
There is one major downside to using a savings account. Nerd Wallet also mentions that you'll rack up a lot in fees if you make too many withdrawals. That's partly because Federal Reserve's Regulation D limits certain types of withdrawals to six per month, and some banks' rules are even stricter than the Fed's.
The Lowdown on Checking Accounts
For most couples, a joint checking account is a better option for wedding funds. Investopedia explains that they offer better funds accessibility than savings accounts because there are usually no transaction limits. You can also order a debit card and checks with this account. Keep in mind that there are many kinds of checking accounts, so you'll need to choose yours wisely:
- Regular
- Premium
- Interest-bearing
- Free/no-fee
Another Investopedia piece details the pros and cons of each account type. Premium checking accounts offer some useful perks, but they usually require maintaining a high minimum balance. Other checking accounts may not place limits on the number of transactions, but they may charge fees. Free checking accounts don't have monthly fees or minimum balance requirements, so they're rather versatile.
A Primer on Money Market Accounts
Bankrate mentions that money market accounts combine features from both checking and savings accounts. They permit you to write checks and allow access to your money, but they also pay interest. On the flip side, they also require higher minimum deposits and limit the number of monthly transactions. With these restrictions, a money market account may not be a smart option to save wedding funds.
Investing Your Money
As you consider your options for saving your wedding money, there's one factor you shouldn't overlook: timing. US News' Emma Kerr suggests investing your money instead of using traditional checking or savings accounts if your financial goal is three years away or more. Long engagements aren't unusual anymore, so you can begin investing money now for a wedding in 2025 or 2026.
Investing in securities comes with risks, but there's the potential benefit of compounded earnings. You also don't need a bucketload of money to start: Nerdwallet offers a guide for investing $500. Platforms such as Stash and Acorns let you start with even less money — only $5. You can buy fractional stock shares or invest in ETFs, exchange-traded funds containing multiple stocks or bonds.
Collaborating on Your Savings Plan
A strategic savings plan can help you reserve money for your wedding. As you and your partner construct this plan, you'll need to consider a lot of factors: your total budget, how often you need access to the money, and how much time you've got left to save. Whatever you decide to do, you both must be on the same page. Common goals, a wisely chosen financial vehicle, and equitable contributions from both partners can help you successfully fund your big day.
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