Five smart ways to use your wedding gift money

Summertime is wedding season. And, that means lucky couples leave their reception often with quite a bit of money from wedding gifts. That money can burn a hole in newlyweds’ pockets.

Though it might be tempting to do so, don’t just spend it all on the honeymoon. That influx of cash can have a big impact on your future as a married couple, if you use it wisely. Use that wedding money wisely to lay a strong foundation for your future. Consider the following:

Pay Off Wedding Expenses

Weddings are expensive. So if you had to pay for all or part of the festivities yourself, you likely incurred some debts. It would be smart to pay off those expenses before moving onto any other purchases.

Start a Rainy Day Fund

Even after the wedding is paid off, you’re likely to see plenty more expensive events throughout your marriage. Your home might need repairs, you could need some extra money for medical expenses, or other events might put a strain on your bank account. So the best thing you can do is set up a bank account with money just set aside for such emergencies. That can ensure that those emergencies are far less stressful when they inevitably occur.

Life happens and everyone needs to have some cash in short-term savings to cover emergencies. Give yourself peace of mind and consider opening a separate account specifically for these unplanned events. A good goal is to have at least three months of income set aside.

Invest in the Future

This is also the perfect time for you to invest a bit in your long-range plans together. At the very least, you should take a look at or set up your retirement accounts. Consult a financial professional if necessary to ensure that you’re setting aside enough money so that you and your spouse will be able to live comfortably later in life.

Improve Your Home

Any time you find yourself with extra cash, making improvements to your home can not only improve your current quality of life, but also help you financially down the road. And if you don’t currently own a home, consider setting some of your wedding money aside to buy one at a later date.

Enjoy the Rest

Once you’ve made some good financial decisions for your future, you don’t have to feel guilty splurging a bit. It’s important to set yourself up for the future, but don’t forget to enjoy your life today.

About the author: Pamela Audette is a senior vice president at Bank of Birmingham, a full-service community bank in Birmingham, Michigan, founded in 2006, to provide competitively priced banking services and products that meet the needs of individuals and businesses by listening, advocating and delivering banking solutions. More information can be found at www.bankofbirmingham.com