How to pay for your child’s wedding without breaking the bank

These days, the cost of a wedding can be mind boggling. Weddings are more expensive than ever before. Whether you plan to pick up the entire tab for the big day or are sharing the costs with your daughter or son and their soon-to-be in-laws, having a sound budget in place will help keep it from getting out of control.

Everyone thinks being a bride or groom is stressful. But what about being his or her parent? Paying for a big event like a wedding can seem prohibitively expensive. But with a little planning and forethought, you can help give your son or daughter a memorable wedding without breaking the bank.

Save for the special day

It’s never too early to begin thinking about saving for your child’s wedding. Higher growth investments, such as stocks or mutual funds are more effective when starting out early. However, money market accounts may be the most liquid, interest-bearing solution for a wedding date that is quickly approaching. A word to the wise though: Saving for a wedding is an admirable goal, but may need to be prioritized after college and retirement savings.

Don’t offer what you don’t have

Let’s say you want to give your son or daughter $10,000 for the wedding. You may have $10,000 stashed away in stocks, but what’ll you do if the market takes a significant downturn before you cash out? To avoid these types of situations, many parents choose to give gifts in cash, a savings account or a certificate of deposit.

Don’t dip into your retirement savings

If you withdraw money from your employer’s savings plan before you’re 59½, you’ll face a 10% penalty on top of the taxes you’ll pay. And you might not be able to replenish your account, which may really set you back. You may think you’re doing your child a huge favor by making the sacrifice now, but think about how she might feel if she has to start helping you with your living expenses later in life.

Talk about it

The economic downturn hit many Americans hard. And for some parents, the costs of a wedding are more than they can handle. If that’s the case, it’s best to talk openly and honestly with your children about it. It’s not worth going into a lifetime of debt for the sake of one day.