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Building Up Savings For Your Child’s Big Day

Nick and I 2005

I love it when people complain about how they had to take out a second mortgage or a loan just to pay for their child’s wedding expenses. I am telling you that it is a completely preventable situation (unless they’ve been unemployed for years). Especially since you generally know from the time that the child is born that they will, hopefully, get married someday and that you will be financially responsible for a huge portion (if not all) of it.

The month that I had my first child is the month that I started saving for her wedding. At the time, I could only afford to put $5.00/month away, but every little bit helps (We try to get caught up on this savings any time we get a bonus or tax return).

How do you decide how much money to save?

I decided to base it off of my wedding expenses and age. I was given $4,000.00 to work with. I figure that if I take a bit of inflation into account, times that (4k)  by 1.5(for inflation) to get the amount I want to save for each kids wedding, which equates to $6,000.00. I plan on needing to have the 6k by the time each child is 19 (how old I was when I got married) So, 19 years to save gets broken down like this:

$6,000/19 years=$316.00 a year(I rounded the cents up)
$316.00/12 months is about $26.50/month

There you have it. The amount I plan to save each month (per kid) to have the money ready when needed is $26.50 (you can adjust the equation to save your desired amount of money). Heaven forbid that a child dies before they get married, but it will help to have some money set aside to pay for funeral expenses if need be.

Initially I planned on having separate accounts for each child, but I’ve found that it’ll be smarter to keep all the money in one untouchable account so that the interest will grow on a larger sum of money. Mine is in a term deposit that allows me to add to it each month.

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*I am not equating any earnings from interest…that’ll just be gravy.*

**I’m in the tough love frame of mind when it comes to my children’s college fund, they can work hard and get scholarships or they can pay for it themselves. They are welcome to live at home with me until they are either married or through college, but I’m not going to fork over thousands of dollars (or take out loans) to pay for it.**

***Some people may wonder why I plan on saving the same amount for both boys and girls and my answer is this. For a boy we’ll need a chunk of that 6k for their wedding, but I plan on using a portion of it to help pay for a mission if they want to serve (otherwise I get to keep it;).***