This might sound super crazy but hear me out. I did not pull a Monica and put my name down on a waiting list at a venue before I am engaged (FRIENDS reference hopefully y’all got that). I do not have my entire wedding planned out (only part of it). The reasons why I am saving for a wedding before I am engaged are because I have to pay for my entire wedding and I don’t want to go into debt (or take out loans) for my wedding.
My goal is to have my dream wedding fully funded before I get married. It will take me a few years to save the amount I need. This is because I have other debt, expenses, emergency fund, fun money, etc. I am trying to make sure I am prepared for my future by being realistic and starting early. This same principle can apply for all future purchases. If you know you will want to buy a house in the next few years, but realize it will take a few years to save for the downpayment, start saving now.
Here are some tips for saving for events/purchases in the future:
1. Set Realistic Goals
I would like to have $25,000 saved for my wedding. As of July 2017, I have around $9,000 saved for my wedding. I might spend less but the goal is to not spend more. After I pay for my wedding I want to have a little left in my savings (an emergency fund) so I do not use every single dollar I have to my name. I know it will take me a few years to save which is why I have already started. The good thing about starting early? If I can’t put money into that account one month that is okay! I can miss a month and still reach my savings goal. When I do get engaged, planning a wedding will be a lot less stressful because I will not have to worry about where I am going to get $25,000 in the next year. I won’t have to live on ramen for a year to save money for my wedding. I will actually be able to enjoy the planning process.
Write down your future financial goals and set actionable steps to help you reach them. You don’t need to have every detail figured out to start planning. Estimate how much you will need, when you will need it, and how much you need to save a month to reach your goal. This will help keep you out of debt and allow you to cash flow big purchases.
2. Open Up a Separate Savings Account
I LOVE Ally Bank. It is my favorite bank (I have mentioned this in other posts so sorry for repeating this). I have forced many friends to open accounts and they love it too. Ally actually just increased their interest rate to 1.15% for a savings account which is AMAZING. There are no minimum balance requirements and no monthly fees. My wedding fund is in my Ally savings account. This way I do not see the account every day and I am less likely to take money out of it. I transfer money from my Bank of America checking account every month (or every few months) to my Ally savings account (transferring from another bank is free!). Another competitive savings account is the Capital One 360 savings account. I personally do not have one but I know people love this account as well. They also have great interest rates and you can label the account as what you are saving for (house, car, wedding, vacation, etc).
3. It is NOT Your Emergency Fund
If I really needed this money in order to avoid debt would I use it? Yes, but the goal is to only use it for what I am specifically saving for. I do not consider this money part of my emergency fund. Just like I do not consider my 401k part of my emergency fund. I honestly don’t even add my 401k into my savings calculation because I cannot touch it for 28301 more years. I don’t want to think that I have that money to spend. This is why it is important to have separate savings accounts. I keep my emergency fund in another savings account at another bank. My Ally savings account is specifically for my wedding. After I will relabel the account for another goal (probably a house) and start saving for that.
4. Don’t Be Embarrassed
It is okay to plan for the future. At first, I didn’t want to even write this post because I felt people would be like omg she is one of those crazies who plans her entire wedding before she is engaged.
Do I love to plan? Definitely (if you need any planner recommendations let me know)
Am I Type A? Ummm 100% ask anyone who knows me.
I just like to be prepared. I do not want to get engaged with $1,000 saved and then freak out that I cannot afford my wedding. If I ended up not getting married I would just use this money for a house or some other large purchase. People might judge you but I mean they’ll just be jealous when you throw an amazing wedding with no help from anyone and no debt! If you are in college and know you want to buy a house a few years after you graduate, start saving now. When all your friends are still living at home or can barely afford rent, they will be jealous and want to come over and hang at your new house.The earlier you start, the less stressed you will be later.
To me, saving for the future shows maturity. There is nothing wrong with knowing what you want and being financially ready for it. The end goal is financial freedom and saving for future purchases, even when there are multiple unknowns, helps you get there even faster.
How many savings accounts do you have? What are you currently saving for?
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