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INTRODUCTION
Planning a wedding is exciting, but you must create a personal budget before starting your wedding budget, choosing a venue, or getting a DJ. Setting financial limits with your finances with a budget keeps your wedding finances from ruining your financial future. A personal budget lays the foundation for your financial future by giving direction to your money. In addition, a budget helps you avoid overspending and ensure your wedding doesn’t compromise your finances before marriage. Here’s why having a personal budget matters and how to set it up effectively while planning your wedding.
Why You Need A Personal Budget Before Your Wedding
1. Set Realistic Expectations Based on Your Current Financial Needs
A personal budget clarifies what you can afford for your wedding so that your wedding doesn't ruin your finances before you get married. When you make a budget, you understand where your money is going and how much you can afford for a wedding. Having a personal budget ensures you use the money to create the life you want within your means. This personal budget ensures your rent gets paid for, you have groceries, and you can get to work without using money allocated for a wedding. The more you “live below your means” in your budget or save more income than you need to live, the more freedom you have financially.
2. Identify Your Financial Limits
Your personal budget sets health boundaries for you and your money. It ensures you don’t stretch yourself thin and risk your financial future. If you overspend what you have or “live beyond your means,” you may need to cut costs for your wedding budget. When you understand your personal finances and how to use money to support your life, you can then create a wedding budget that works to support your future, not financially ruin you. If you haven't done so, talk to your partner about your budget and financial limits for a wedding.
3. Have Emergency Fund Savings To Protect Your Wedding Fund
With a personal budget, you can allocate a portion of your finances towards an emergency fund to keep emergencies from draining your wedding savings. Many people don't have $1000 saved for emergency repairs, job loss, or fridge replacement. If you lose your job and don't take steps to build an emergency fund, then your wedding fund becomes your emergency fund.
4. Avoid More Debt For Your Wedding
Don't regret your wedding because of debt. Without taking control of your finances with a budget or spending plan, you risk taking on unnecessary debt that can weigh you down for years. Going into debt with credit cards or using wedding loans to pay for your wedding to please other people who won't help you pay off the debt will not benefit you in the long run.
A wedding is one day; your financial future lasts a lifetime. You do not need to go into debt for a wedding! Talk to your partner about debt before marriage so you are both on the same financial page. A debt-free wedding is possible with a personal budget and a plan.
5. Start Getting Your Financial House In Order Before Marriage
Weddings can be expensive, and sometimes it’s easy to overlook the long-term impact on your finances. Don't let the cost of a wedding become the big financial fight at the start of your marriage. A personal budget helps ensure you don’t start your married life in financial confusion. Your budget changes when you get married to account for another person who impacts your finances. By having a personal budget before your wedding, you can easily start adjusting your budget with your partner for future goals like saving for a house or paying down debt with your spouse.
How to Create a Budget That Supports You and Your Wedding
1. Track Your Spending
To create a budget that works for you, start by tracking your expenses. Tracking your expenses shows you where your money is going and can reveal how you spend (or overspend) your funds. For example, you may have spent $1500/mo on Amazon and don't remember why. By tracking your expenses, you can see where your money is going and can make changes.
Several ways to track your spending include using Excel spreadsheets, budgeting notebooks, or budgeting apps. Budgeting apps are great because you can link all your accounts, and the budgeting app takes care of the rest. Several apps can give you recommendations and insights for your spending. Many apps have different interfaces or features. Find one that works best for you. Some popular budgeting apps include:
- Simplifi: Tracks all expenses with up-to-date net worth calculations, personalized insights, and goals with an account-sharing feature for couples.
- You Need A Budget (YNAB): Popular app that uses zero-based budgeting to give every dollar a job.
- Monarch Money: Offers shared budgeting and expense tracking with sharing features for couples.
- Every Dollar: Follows a simple, easy-to-use budgeting method created by Ramsey Solutions.
- Rocket Money: Automatically tracks subscriptions and cancels unwanted ones.
- Empower: Monitor net worth for free, track spending, and save goals to simplify your finances.
2. Choose a Budgeting Style That Works for You
Once you track your expenses, you can create a budget that works for you. Design a budget that prioritizes your values in a system that aligns with you. If you value traveling more than eating out, create a budget that supports your ability to travel more. Whether it’s a reverse budget to prioritize saving or an account bucketing system that isn't as detailed but keeps your money organized, consistency is the most important thing.
3. Automate Your Finances
Automation simplifies money management, ensuring you never miss payments for rent, utilities, or other fixed expenses. When you automate your finances, you use technology to send your money to what you value. With automation, money will go to paying your bills, building an emergency fund, saving for your wedding, paying off debt, or funding your retirement each month without you having to consider it. Automation can even make you a millionaire! Here is one way to set up your finances with automation.
4. Establish An Emergency Fund
Weddings often come with unexpected costs, such as last-minute decor or additional fees, but life also comes with unexpected expenses. A budget helps you build an emergency fund, ensuring these surprises don’t derail your plans. Start with a goal of $1000 for an emergency fund. Set aside 3–6 months of your fixed expenses to avoid financial strain from unexpected costs.
I recommend keeping your emergency fund separate from your primary bank so that you are less tempted to use the money. It also helps to keep your emergency fund in a high-yield, FDIC-ensured savings account so that it is protected and growing faster because of higher interest. We started an emergency fund at Wealthfront for our wedding, and its high interest has made our savings grow faster. Other great options are Ally Bank, Capital One, or Sallie Mae.
5. Plan for Expenses and Future Goals
Budget for recurring expenses, retirement contributions, and goals like buying a home. Plan for future expenses with intentional saving accounts or sinking funds. Sinking funds for specific costs like weddings, honeymoons, or car repairs can help you prepare for the future without relying on debt. You can keep these sinking funds in high-yield savings accounts and use them when needed, like using your car repair fund when you need new tires for your car.
You can automate funding for your retirement accounts and other investments as well. Want to start investing but don't know if you have enough or where to begin? Check out books like “The Millionaire Next Door” by Thomas Stanley, “A Random Walk Down Wall Street” by Burton Malkiel, and “The Simple Path to Wealth” by JL Collins. These are great introductory books on wealth and investing and how you can start investing to build wealth, too.
Do your research and understand your risk tolerance before you start investing. You can even start investing as little as $25/month at places like Fidelity or use apps like Acorns to round up change to invest based on your goals. With some financial basics and tools like automation, you can start investing to build wealth beyond the wedding.
6. Make A Plan To Pay Off (and Avoid) Debt
When planning your budget, paying off debt should be a top priority. Start by making it an automatic payment like your fixed monthly expenses—just like rent or utilities. When I paid off my school loans, I used Dave Ramsey's “Total Money Makeover” and the snowball method, where you first pay off the smallest debt to build momentum. If you have many credit cards or high-interest debt, use the debt avalanche method, which targets the highest-interest debt to save on interest in the long run.
Additionally, it's important to build habits that help avoid accumulating new debt or getting trapped in the debt cycle. If you or your partner have debt, talk about crushing your debt together. Set realistic spending limits to prevent overspending. Plan to pay off credit cards in full each month. If you can't, then stay away from credit cards because the benefits from points don't outweigh the credit card interest that accrues. Keeping your debt in check requires consistent effort and planning, but having it as part of your budget ensures you’re always moving toward financial freedom.
7. Adjust Your Budget to Reflect Your Priorities, Values, and Future Goals
When you get married, adjust your budget to match what matters most. If dining out or fitness is a priority, allocate money for it. To save for the wedding, reduce costs by cutting unused subscriptions, optimizing grocery spending, or house hacking to save on rent. Track your net worth to see how your finances are growing with your budget. Have regular money dates to review your budget and your goals. Allow your budget to help you control your money so that you can enjoy the financial journey.
CONCLUSION
A personal budget ensures you can enjoy your wedding day without financial regrets. Setting up a personal budget first gives you a clear picture of your financial situation. The key is to make a budget system that works for you and helps you reach your financial goals while planning a wedding. Planning your personal budget now will pave the way for building wealth beyond the wedding.
Are you ready to create a budget that supports your wedding and financial future?
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