Saving for marriage

Weddings are happy occasions, celebrating the bond between two people as they dedicate themselves to each other and start an exciting new life together. However, while participating in a wedding can be a great experience, planning (and paying for) a wedding can be quite stressful, especially if you don’t plan far enough ahead.

In this article, we’ll walk you through setting your expectations and offer you some tips that can help you to plan for your big day.

While most of the above can’t be cut out of a typical wedding budget, there are a few questions that you can ask to help trim down the costs, such as:

• Are there any must-have traditions we absolutely need to keep? Identifying must-haves is an essential part of making a budget.
• How many attendees will we have? The guest list will be the determining factor to a lot of your required expenses: the number of guests will determine how much catering will be required, how large you need your venue to be, how many wedding favours you’ll need to provide, how many drinks will be consumed, and how large the cake will need to be.
• What sort of reception will there be? Traditionally, a wedding reception is a massive dinner to which everyone from the wedding is invited. However, this isn’t always the case. Couples can instead opt to have less-extravagant brunches or lunches instead, which can have a significant impact on your budget. Plus, while a reception is generally thought of as a part of a wedding, it’s functionally an afterparty for the ceremony and is technically not required at all if the couple doesn’t want one.
• Will there be a rehearsal dinner? A rehearsal dinner is like a mini-reception the day before the wedding, and can add another layer of expense onto the event.
• What type of venue do you want? Venues can represent a significant part of your budget, and the cost of a venue can vary widely. If you have a specific type of venue in mind, you can nail down one of the most significant line items in your wedding budget.
• What’s included in the venue price? Make sure that, when you get a quote for the venue, it includes all of the furniture and equipment you will need. Many venues have additional rental and setup charges for tables, AV equipment, staffing, and more that can inflate the quoted price.
• Will you be sending people home with gifts/favours? Favours might not be the biggest expense, but it can be very helpful to nail down the cost of any memorabilia you want to provide for your guests to take home.
• Will your family (or new extended family) help out? This question might not necessarily establish how much your wedding will cost, but it will be helpful when determining how much you’ll have to save.
• How will the expense be split between you and your spouse? This also might not change your budget, but figuring out how you and your spouse are going to be coordinating your funds can help you craft your savings strategy.
• If you have to cut something, what should be the first to go? We can’t always get everything we want, but imagining something you can do without can give you a good sense of where you might want to start trimming if your wedding plan starts to go over-budget.

Of all the expenses in your budget, your venue and catering will typically be your largest expenses, often clocking in between 40-50% of your wedding budget–and that’s not including the cake. There are a few ways that you can help mitigate this expense, the most obvious being to simply limit your attendance. Fewer attendees means less seating and fewer plates that you will need to cover at the reception.

With a smaller guestlist, you might be able to consider a cheaper venue as well. Some venues like public parks or gardens may be cheaper than renting out an entire hall, and backyard weddings are a common way to reduce venue costs if you or someone in your family has the space. 

It’s commonly recommended that you tell the venues that you’re planning an event when you’re getting a quote, as some venues actually charge a premium when they know that you’re hosting a wedding instead of a reunion or other social gathering.

You can also have a cash bar at your venue. This can cut back on the food and drink costs, but make sure that you consider how your guests will react. Cash bars can slow down service and might come across as an inconvenience to your guests.

You might also be able to cut down on the venue expense by holding the ceremony during an ‘off-peak’ month. Rental prices tend to dip when less people are getting married, and could also lead to other reduced expenses like a cheaper honeymoon vacation. Just make sure that you plan according to the weather, especially if you’re going for a mid-winter wedding date.

Another way to supplement your budget is to forego the wedding gifts, and instead ask guests to chip in cash to cover the meals and venue. This could be particularly helpful if you and your partner have been together for a while, and already have everything you need.

Finally, as with most things related to finance, it can be a great benefit to do your homework. Comparison shopping can help you find more competitive providers, and being thorough in your quotes can help ensure that you aren’t blind-sided by hidden service fees.

Remember: time is money

Prioritize your savings and expenses

Discipline is an important factor when it comes to saving over a long period of time. Life is full of distractions, surprises, and emergencies that can derail your savings, either by denying you money you had planned to contribute or draining funds that you’ve already saved.

Whenever an expense pops up that could interrupt your savings plan, make sure that you approach it responsibly. How large a priority is this expense? Is there another way you can adjust your budget to tackle high-priority expenses? And if not, what adjustments can you make to get your savings back on track?

When in doubt, automate

It can be difficult to save for the big day, especially if you’re not getting married for a while. There are a few Questrade features that can help you stay on top of your contributions so that you can keep your trip down the aisle on track.

• Pre-authorized deposits (PAD) are a great way to keep your savings on track without having to worry about manually sticking to a schedule. Just link up your bank account and set the frequency and amount you want to contribute. Learn how to set up a PAD.
• Questwealth Portfolios are a pre-built group of diversified ETFs based on your goals and your timeline. They’re fully automated, which keeps fees much lower than most mutual funds, and are overseen by a team of experts to keep your investments on track.
• Passiv is an automation tool for those who prefer to manage their investments themselves. It links to your Questrade accounts and automatically invests your deposits according to your settings. Even better, it can rebalance your investments with a single click, making sure that your account is diversified according to your own preferences.

Make the most of available tax-advantaged accounts

There are a number of accounts available, and there’s no one account type that’s best for everyone. However, there are some things to keep in mind when choosing how to save for your wedding:

You may be able to use a tax-advantaged account. Tax-Free Savings Accounts (TFSAs) are commonly used to save for short-term goals. Growth and withdrawals are tax-free, you can withdraw at any time for any purpose, you get more contribution room every year, and after you withdraw funds you get that contribution room back. Learn more about TFSAs.

If there’s no tax-advantaged option, you may still be able to use a margin account. Margin accounts aren’t tax-advantaged, but they also have no contribution limits and less account restrictions than many registered accounts. Learn more about margin accounts.

Whichever account type you choose, you may want to open a dedicated one. You’re allowed to open multiple accounts of any type, so if you’re concerned about mixing your wedding savings with other goals or funds, you can open an account dedicated towards investing for the big day. Just keep in mind that if you are using a registered account such as a TFSA, your contribution limits are shared across all accounts. So, for example, if you had an existing TFSA with $10,000 in available contribution room, and you put $2,000 into a new TFSA to save for your wedding, you would have $8,000 in total contribution room to split between all your TFSAs.

What if you don’t have enough time to save for your entire wedding?

We don’t always know where life will take us, and often our nuptial timelines don’t give us enough time to squirrel away enough to cover the whole event, even with budget-cutting measures.

There are several ways that people can scrounge up funds, such as approaching extended family for help, dipping into other savings, or even making even more budget-cutting decisions such as changing the venue or paring down your guest list. The best approach will depend entirely on you, but there are two important things to keep in mind:

• Think it through. Make sure you’ve considered all your options and weighed their potential consequences so that you can make an informed decision about how you’ll cover the rest of the cost.
• Be honest with your partner. If you’re going to need to trim down the guest list, borrow money, or borrow from another savings account to hold the event, your partner should at least be made aware.

While the wedding itself will likely take up the lion’s share of the budget, it’s important that you not forget about the other ways you may celebrate your union. Stag and hen parties may vary in cost, especially they involve travel and lodging, and a traditional honeymoon can also tack on an extra chunk of change.

You may also want to keep other goals in mind, such as buying your first home or starting a family, when you’re considering your wedding budget. While making your big day memorable is important, you and your partner may find it prudent to trim your budget a little so that you can get a head start on your next major milestone.

When the wedding celebrations are over, you and your partner might want to look into some next steps to make sure your new lives together start on the right foot:

Update your financial profiles. If you’re changing your surname, then you will want to make sure that you update your Questrade account profile to reflect the new name. Please note that you will need to confirm the change with either a government-issued photo ID with your new name or a name change certificate. You cannot confirm a name change with only a marriage certificate.

Please also remember to update your name on all your other financial accounts, as you will likely encounter problems if you attempt to transfer funds across accounts with mismatched names.

Look into accounts designed with your future in mind. Once you’ve tied the knot, you may want to consider opening a spousal RRSP account. This account lets you both pool your RRSP contributions, which might be leveraged into a tax advantage. To learn more about the benefits of joint RRSP accounts, contact your tax advisor.

If kids are in your future, you may want to look into opening Registered Education Savings Plan accounts (RESPs) for them once they come along. RESPs are tax-advantaged accounts that can help you save towards your children’s post-secondary education. 

Finally, remember: financial issues are often cited as a friction point within a marriage. Make sure that you’re both on the same page when it comes to your money, especially when it comes to joint savings and saving towards shared goals, to give you the best chance at a happily-ever-after.

Note: The information in this blog is for educational purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied, is made by Questrade, Inc., its affiliates or any other person to its accuracy.