After all the champagne has been popped, the gifts unwrapped, and your honeymoon tan is achieved, you may notice that you’re sitting on a pretty penny in cash wedding gifts. But once you stop smiling at your new last name on the check from your great aunt, you might also realize that you and your better half may have different plans for that moolah. You want to stash that cash away for a new house, while your new spouse wants to upgrade your electronics. Uh oh. Here’s how to handle disagreements on how to use your wedding cash.
Come up with a game plan — before the wedding.
“The first thing I would tell couples is not to think of this as winning the lottery and that now you can [go pay for] all your dreams to come true,” Joan Antoniello, principal of WeiserMazars Wealth Advisors LLC, says. (This means no springing for a Beyoncé-Jay-Z level vacation or fancy furniture that is way outside your means, sorry!)
Antoniello says couples should sit down before their wedding and devise a plan that includes their common financial objectives and the timeline for those goals, including how to pay off any outstanding debt and the budget for the wedding. “It’s really important to have the discussion before [the wedding],” she says. “People have very different experiences dealing with money. You need a conversation and common ground.” One of her top suggestions for deciding whether spending your money on something is worthwhile is asking yourself where you see your financial situation in five years. Once you are clear on that, you can decipher what steps it will take to get you there.
Use it to further your joint financial goals.
Dan Yu, managing principal of financial planning and investment advisory firm EisnerAmper Wealth Advisors LLC, says depending on the couple, there may be a bit of debt already hanging around that should be dealt with immediately. “My strongest advice [in that situation] would be to pay down any credit card debt first,” he says. If a couple has paid off credit card debt, stashed away enough for an emergency fund (six months of living expenses), then that couple may want to consider putting money into a savings vehicle for an apartment or home down payment, he says. If a couple is considering investing but doesn’t have much experience yet, he recommends low-cost mutual funds to start off with.
Cool off and reconsider.
If a couple is at odds over where to spend their money, Antoniello recommends a “cooling off period of up to 90 days” before deciding where those funds will go. She also says couples can “come up with an agreement about how much goes into savings” and then earmark, say 10% for a splurge—whether it’s a golf outing or a trip to Vegas.
Give each other a free pass.
For couples that disagree about how to spend wedding cash given as gifts, Yu recommends giving each person a “mulligan” of sorts—where each partner can choose a fun or frivolous thing to spend a set dollar amount on (perhaps you want to cap it at $1,000 each). “You want it so that both parties have a 50/50 stake in how this money is spent…You only get on this rodeo once, so you should enjoy it,” Yu says. Most importantly, Yu emphasizes that both parties compromise and display a willingness to listen to each other about their potentially different ways of viewing money. “It shouldn’t put a wedge between [the couple],” he says.