Everyone should start their marriage off on the right foot—especially when it comes to finance. There's a reason that setting your budget is probably one of the most important steps on your wedding planning checklist. For help on how to stick to it—and not go broke from your big day—we chatted with money whiz Alexa von Tobel, newlywed and CEO of financial planning site LearnVest. Here's what she had to say.
Brides: How Do You Feel About Brides Going Into a Little Debt to Pay for Your Wedding?
Alexa von Tobel: While I love a beautiful wedding (and they're expensive!), it's critical to avoid going into debt for your dream nuptials. You certainly don't want to be paying off those bills as you celebrate your first anniversary!
So How Do You Avoid It?
Alexa von Tobel: Start by setting up a separate savings account just for your wedding expenses. You can automate savings into that account on a monthly basis, so you don't feel the financial pressure all at once. Planning for a wedding takes time—and building this account can take time too. Once you know what you're working with, set a clear (and fixed!) budget and then go plan yourself the wedding of your dreams.
Should I Dip Into My Savings?
Alexa von Tobel: I suggest you keep an emergency savings account (which I call a "freedom fund") with at least six months of living expenses. It's there as your financial safety net—it can tide you over in case of an emergency, like if one of you loses your job. The wedding savings account should be separate from this.
How Would You Prioritize Wedding Spending?
Alexa von Tobel: One of my rules of thumb is that it's best to spend money on services, like the band and the caterer, and negotiate on hard goods, like food and alcohol.
What's the Best Payment Method?
Alexa von Tobel: Paying in cash makes it easy to track how much you are spending in real-time. On the other hand, a credit card gives you some protection (e.g. if something were to go wrong with a vendor). You can also rack up great bonuses if you use a rewards card. My husband and I flew to France (for our honeymoon) on points! But remember, as with all credit card purchases, it's imperative to pay the bill in full, every month.
Is Going Over-Budget the End of the World?
Alexa von Tobel: Depleting all your savings or going wildly over-budget is one sure way to start off on the wrong foot. A solid marriage is about being a good team when handling everything life throws your way—including financial difficulty. Money can be a major source of stress in relationships, so use this time to get on the same page, understand your goals and priorities, and work together.