Newlywed Financial Advice: Put Wedding Gifts To Good Use

This guest post was brought to you by Camille Johnson. Today, she’ll share her tips on how to put wedding gifts to good use.

Enjoy!

In recent times, it has been found that newlyweds received as much as $235 from each guest toward their wedding gift funds. Before you start spending the money all willy nilly, take a moment to consider using it for your future together. Here are some of the ways you can put the money to good use.

Tackle Your Debt

According to Debt.com, about a third of the one thousand newlywed couples surveyed went into debt when paying for their wedding. These couples had an average debt of almost $12,000, some of which came from personal loans or credit cards. If your gift money is enough to pay off the debt in full, then that sounds like a good option. If not, you can put the money towards paying the debt off and develop a plan for getting rid of the debt altogether — even when you’re low on cash. This is most helpful if your debt is coming from multiple sources. Attacking your debt first is a good way to put wedding gift funds to good use.

Use It for a New Home

Like many couples, you may be ready to purchase your first home together. And putting your wedding money toward a down payment is a great way to make your money work for you. Providing a down payment presents the opportunity to secure a lower interest rate and a lower mortgage payment because the less you borrow, the less you’ll pay each month. Twenty percent down is the ideal amount if you choose a conventional loan. Of course, even if you can’t put down 20 percent, having any money for a down payment can still make a difference. Alternatively, your wedding funds can go toward closing costs or inspection fees.

Build an Emergency Fund

Now that you’re married, you should be having a conversation about combining your finances if you didn’t already. While you should be thinking about opening a joint account, you also need to have a joint emergency fund. A typical emergency fund should cover between three to six months of your expenses and should be used to pay for unforeseen major expenses like a fall in income or the repair of a large appliance. Your wedding gift funds would be a great way to start your emergency fund, and then you can keep building it. Even small daily savings can be used to build an emergency fund you can be proud of.

Invest in Life Insurance

It might seem a little early to be thinking about policies that are meant to cover expenses in the event of your passing, but life insurance is one of those things that are best started early. According to Heritage Garment Preservation, it’s best for newlyweds to know the different types of life insurance policies available, as well as how to shop around for insurance companies.

You can determine how much life insurance you need by using the monetary difference between your assets and your expenses. If you prefer, you can also do a general estimation based on your annual salary.

Start Investing

Investing as a couple can be challenging if both of you have different approaches to financial risk. Because of this, it’s advisable for you to talk with your partner about what you’d both like to accomplish and what you’re comfortable with.

Speaking with a financial advisor can go a long way in helping you determine which type of investment accounts will be best for you and if you should explore having joint, as well as separate accounts at the beginning. Some popular investment accounts to take advantage of as a couple include traditional or Roth IRAs and Health Savings Accounts. You can also make the most of your investments by diversifying your portfolio with stocks, bonds, and mutual funds.

Life can throw a lot of challenges at married couples, and financial management can be one of them. You can get a handle on your finances early in your marriage by making good use of your wedding gift funds. The above tips can come in handy as you financially plan your future together.