Should you pay for your kid’s wedding?
There’s no easy answer to this father’s question – especially with the high price of weddings.
Couples spend an average of $30,000 on their nuptials, according to The Knot’s 2022 Real Weddings Study. That same data shows that the average marriage age is now 30-years-old, an age group that is being hit particularly hard by from high inflation, wage stagnation and record debt levels. Many Americans, millennials included, don’t even have $400 saved – much less $30,000 – so it makes sense they’re turning to the bank of mom and dad to fund their wedding.
Before you even ask if you should pay for your child’s wedding, take a look at your savings. Do you have $30,000 sitting around or would you have to dip into your retirement savings? Personal finance personality Suze Orman warns parents not to jeopardize their retirement nest egg or put themselves in debt to finance their kids.
If you need to tell your child that you can’t afford to pay for their wedding, feel free to use this Orman-approved script: “I am no longer your bank account! I'm getting to the point where I need my money to be able to support myself. You are old enough now to go out and figure it out. So don't come to me for money.”
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What should you pay for?
The Reddit dad later writes that he decided that he wants to financially contribute to his daughter’s life, whether that be through a wedding or a house (she can’t have both, but it’s her choice).
If you decide that you also want to be financially involved in your child’s big day, you need to ask yourself: how much of this wedding am I willing to pay for?
Roughly 52% of a couple's wedding costs are covered by parents, according to planning hub WeddingWire’s data. So even if you’re not covering the whole wedding, you may still be putting up quite a bit of money.
Some parents know that they want to pay for their child’s wedding and have been saving since their birth. But if you haven’t been doing that and it’s looking like your kid may soon be walking down the aisle, it’s not too late to start.
You can automatically put money aside from every paycheck into a savings account to ensure that you have a nest egg for your child’s big day.
Depending on your cultural background, there may be certain traditions or norms for how families split wedding costs. Remember there is also your child's chosen partner and their family to consider and their contributions.
Whatever you decide you want to pay for, make sure you have a conversation with your child and their partner early on in the process to make sure everyone is on the same page, [cautions a wedding planner] in an article by planning hub WeddingWire – or else you may end up in a situation similar to the one described in the Reddit post.
Watch out for the gift tax
Now that you’ve decided on how much you want to contribute to your child’s wedding, It pays to be aware that the IRS may want its cut.
You can give your child up to $17,000 without incurring a gift tax. If you want to give more than that, you can send it to your spouse (there’s no tax for gifts between spouses) and they can send another $17,000 installment to your child.
If you and your spouse decide to contribute more than a combined $34,000 to this wedding, you will be the ones who will receive the gift tax – not your kid. If you are unsure of all the rules and ramifications of gifting money, consider consulting a financial adviser who can help you navigate the best way to help your kids out.
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