A child’s wedding day is a proud moment for parents. Their child is starting a new chapter in life, and most want to mark the occasion with the perfect ceremony and reception. Whether parents plan on paying for their child’s wedding entirely or to help financially, the cost of the celebration can add up.
According to The Knot Real Weddings Study, the average cost of a wedding in the U.S. in 2023 was $35,000, but that cost can vary significantly depending on where the wedding is held. For example, a Manhattan wedding might cost upwards of $60,000, while a wedding held in the Midwest might cost around $20,000.
Here are some tips for funding the big day:
Planning ahead is key
Parents looking to pay, or assist in paying, for the event should start setting aside money well in advance, says Angie O’Leary, head of Wealth Planning at RBC Wealth Management–U.S.
“A wedding is a big-ticket expenditure,” O’Leary says. “Parents need to ensure they understand how they are going to fund their child’s wedding—and the impact it could have on their long-term wealth plan.”
For example, O’Leary says parents planning to use their investment assets will want to avoid taking out the funds at a time when the markets are down. This can mean moving money to a separate investment account, with less risk, months or even years in advance.
“We often recommend that people put the money aside in its own account, like you would a college fund,” she says. “Prepare for it. Be ahead of it.”
O’Leary says some parents like to gift the money to their kids and have them pay for the nuptials or use the money for other reasons, such as a down payment on a house; but they should be aware of the $18,000 per year, per person gift tax limit. Anything above that amount may subject the parents to gift tax complications.
Couples can receive four, or even eight, times that amount since the $18,000 limit is per child, per parent. In other words, gifts can be $72,000 per parent couple, or up to $144,000 if both sets of parents gift to each child. That’s typically enough to pay for the average wedding, even in New York City.
If the wedding is going to cost even more, O’Leary recommends spreading the gift money over more than a year.
Strategies to split costs
Today, most couples contribute their own money to their weddings, either to maintain some control of the event or to cover costs beyond the parents’ budget. A recent survey by popular wedding website Zola found about 90 percent of couples are contributing to the cost of their nuptials, with 30 percent covering every penny themselves.
Investing their own money allows them the freedom to spend how they want without as much pressure from parents and traditions.
This is especially true as couples get married later in life, when they’re more financially established, O’Leary says. Or, in some cases, parents may simply refuse to pay for certain costs, such as flying their child’s friends to Europe or an island for the big day.
“Setting expectations and limits is important when there are financial considerations,” O’Leary says. “Kids may have different priorities than their parents when it comes to their wedding. You need to figure that out before they start picking venues and placing orders.”
Beware of sticker shock
When budgeting for a wedding, it’s important to remember the extra costs, such as sales tax on the cake and wedding attire, rental fees for décor and catering service charges.
“Sometimes there can be a little bit of a sticker shock when the final bill comes in,” O’Leary says.
She recommends using the services of a wedding planner who has experience sourcing and costing expenses for the big day.
“Having a wedding planner can easily pay for itself several times over,” she says. “When you engage with someone who does this for a living—who knows the ins and outs—it just makes sense. Let them focus on hidden costs and spending. That leaves you to focus on the overall budget.”
A wedding planner can also reduce stress from planning the event or relying on family and friends—who may have the couple’s best interests in mind, but not their tastes—to handle the details.
Wedding costs in an overall wealth plan
Too often, O’Leary says parents forget to mention to their financial advisor that they plan on paying for their child’s nuptials, which means the best strategies to finance the event can get overlooked.
Luckily, “a good advisor is always going to bring it up with parents,” she says. “A wedding is a looming expense that needs to be built into their overall wealth plan, alongside paying for college or helping with a down payment on a house.”
Financial advisors will also help parents pull the money out of the right places, at the right time.
O’Leary says there are two places parents should never take money from to fund a child’s wedding—their home and assets intended to pay for retirement.
“There are a million ways to get married, but there’s only one way to retire,” she says.
Weddings are joyful and memorable occasions, and with these tips in mind, parents can be ready to support their child’s next step.