How To Pay For Your Wedding
Planning a wedding is an exciting time in life and a big milestone in a couple’s relationship. However, one of the most difficult parts of wedding planning is determining a reasonable budget and figuring out how to pay for it. According to The Knot, the average cost of a wedding was $30,000 in 2022. Things are slightly more expensive if you’re getting married in the state of New York: $46,000. While some couples receive financial help from their families, many others have to cover some or all of the costs of a wedding on their own. In this article, we’ll look at a variety of ways to pay for your big day, from savings accounts to personal loans for weddings.
The first step is to start saving.
A regular savings habit not only helps you put aside the money you need for your wedding, but the right savings account can also help your money grow. The best savings accounts for a wedding include:
- High-interest savings account: Earn a higher-than-average rate of return with a high-yield savings account.
- Money market: Earn a higher interest rate on your primary checking account.
- Certificates: If your wedding date is a while away, consider a savings certificate. You’ll enjoy a high interest rate, and you can’t take your money out and use it for something else–a nice bit of accountability for savers who may be tempted to spend. Learn more about this savings option in our blog “What is a Savings Certificate?”
Put Your Money To Work For You
In addition to saving money, you can use rewards that you earn from everyday purchases you already make to help pay for your wedding expenses.
Rewards Credit Cards
Earn rewards on all your credit card purchases, from groceries and gas to your wedding dress. There is no cap on how much you can earn per month with a rewards credit card. You can use the points to pay for travel expenses such as hotel and airfare for your honeymoon.
Borrow Against Your Home
Even though you’ve saved and collected cash back, you may still need to explore your options for wedding loans. If you’re a homeowner, you also have the option to borrow against your home’s equity.
- Home Equity Loan: A term loan with a low interest rate secured by the equity in your home. Receive a lump-sum payment upfront and repay what you’ve borrowed in regular monthly installments.
- HELOC: A Home Equity Line of Credit is a revolving credit line secured by the equity in your home and featuring a low variable interest rate. HELOCs offer the flexibility to borrow what you need, when you need it, repay what you borrowed, and use the credit line. Learn more about what a HELOC can be used for.
- Cash-out Refinance: If your credit score has improved since you first applied for a mortgage, or if interest rates have fallen, a mortgage refinance can help you save money with a lower interest rate while converting some of your equity to cash.
Borrow against your Retirement Savings
Do you have a 401(k) retirement savings plan through your employer? You may be able to use your 401(k) as collateral to get a low-interest rate even if you have fair or bad credit. However, taking out a loan for a wedding by borrowing against your retirement could jeopardize your future. And, if you leave your employer, you may need to pay back the loan quicker than you anticipated.
Another option is a Roth IRA. If you’ve had your Roth for more than five years, you can withdraw up to a $10,000 lifetime maximum and your earnings won’t be subject to taxes if the distribution is made in substantially equal periodic payments. Talk to your tax advisor before choosing this option.
Personal Loans for a Wedding
Perhaps the simplest option is a personal loan for your wedding. A personal loan is a term loan that can be used to pay for anything, including a wedding and honeymoon. You don’t need to have home equity or a retirement account to get a personal loan. Approval is based on your creditworthiness. Personal loans generally offer better rates than credit cards and can be repaid in predictable monthly payments. You can also get a better rate by joining a credit union. Members save for at Palisades CU!
Create a wedding budget
Before you take out a personal loan for a wedding or any other type of wedding loan, you will need to know how much you need. Create a reasonable budget for your wedding so you have a savings goal to reach for.
Adjust your regular monthly budget as much as possible to make room for wedding expenses. Put aside as much money as you can. Cut back on unnecessary expenses and include wedding savings in your budget as a line item.
What is the best loan for a wedding?
Are you wondering, can I get a loan for my wedding? Learn more about personal loans and discuss your wedding loan options with a local lender or financial representative from Palisades CU. Ready to start your application online? Apply for a personal loan for your wedding. Adjust your budget with our personal loan calculator.
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