What Is a Better Gift Than a Grand Wedding? Glad You Asked.
First, congratulations. You’ve brought your son or daughter through all the challenges of infancy, childhood, and young adulthood. You’ve worked hard to give them the best of everything, perhaps that even included paying for most or all of their college education. Now they’re engaged, and there’s most likely the temptation to reward them, and yourselves, with a lavish wedding.
But consider this: The average wedding today costs over $30,000 (and rising). And it’s much more in cities like Manhattan ($80,000+) or Chicago ($60,000+). Regardless of whether you can afford it, you should ask yourself: Is paying for this single day truly the best investment for your beloved child’s future?
There are a number of alternatives to paying for a wedding that still allow you to give your child a meaningful gift to celebrate the next chapter in their life.
Pay down debts
Maybe you’ve covered most of your son’s or daughter’s college expenses. However, there may still be some residual school loans or credit card balances that will be very difficult for them to pay down with their initial income. The average college graduate has more than $30,000 of debt upon graduation, resulting in a need to defer many of the “rites of passage” experienced by other generations like buying a home or starting a family.
Consider paying off their account balances. A fresh financial start may be the best wedding gift of all – and give them the freedom to pursue their most promising career paths instead of needing immediate income to cover debts.
“Beginning a new life together is an inherent adjustment,” explains Mary Ellen Krueger, Director of Investment Advisory and Principal at Aspiriant in Milwaukee. “And if coupled with debt, it can lead to stress and discord. Use the opportunity to encourage your child to have an open and honest conversation with his or her spouse-to-be regarding shared financial goals.”
A special day vs. a special life
Would a more lavish honeymoon, or even several months of living and travelling in Europe, provide more and better memories than a day in a fancy ballroom? You could fund this with the money you would have spent on a major wedding. The same amount could also buy a year or more of graduate school and help launch a very profitable professional career that pays dividends for a lifetime.
A home of their own
Saving up for a down payment on a first home may take many years, even decades, for the newlyweds. Have you considered offering a down payment? As you know from your own experience, real property will be a major asset – providing a base of net worth and credit worthiness, a trade-up for future homes, and a valuable lesson in the value of long-term investment.
“Lending standards for home buyers are higher than historical averages making home ownership unattainable for many,” says Krueger. “And as home ownership continues to decline, rent is becoming more expensive. A gift towards a down payment on a home will give your child the opportunity to save on rent and start building equity.”
Pave a new pathway
You may envision your son or daughter taking over a family business or following you into a profession where your guidance and connections could help pave their way. Keep in mind, however, that your adult child may have developed interests, talents and passions far different than yours.
Consider helping them start up a business of their own. Your investment in the business of their dreams could be the most profitable you’ve ever made – building a stronger family relationship based on your love and support for their individuality and entrepreneurial courage.
Times they are a-changin’
Today, college-educated young adults marry for the first time at a higher age than at any time in American history, on average women are 26.5 years old and men are 29.5. You may be surprised at how receptive and mature they can be in understanding and responding to your family discussion of their wedding options.
“No matter what gift you make to your child in recognition of this important milestone in their life, be sure it’s an amount that is a comfortable level for your financial situation,” Krueger recommends.
Perhaps even consider giving them an open-ended gift and pass the responsibility of budgeting and prioritizing onto your adult child. This may be one of your last opportunities to impact your financial wisdom and values on your child.
*Census Bureau; workers aged 18 and older, 2014