As a newlywed, you are guaranteed to receive a lot of money among the other presents, whether you specifically asked for it or not. For some people, this rapid inflow of money can be quite thrilling. But instead of succumbing to the sudden temptation of going on a huge shopping spree, you need to consider what to do with your money carefully. By wisely investing the cash you receive on your wedding day, you can build a reserve that can help sustain you throughout your marriage. Here are the top five investments every newlywed should consider:
1. Paying off debt
Considering that most couples pay for their own wedding nowadays, they often enter their marriage carrying a large debt. Even if a couple manages to alleviate some of the cost of the celebration, or even evade debt for the wedding, most couples still enter their new life with existing debt, such as student loans, consumer debt and any other expenses that double when the two households combine. If you have too much debt to be able to pay it off entirely with your wedding money, find the most toxic one and get rid of it first. Apart from saving money in the long run, the faster you take care of your debt, the sooner you will be able to invest in your future together.
2. Buying a car
While buying a car is quite possibly the second largest purchase you’ll ever make, it is also one on the smartest. But before you go in to talk to a dealer, you need to have a good idea about what both of you want. You should ask yourselves who will drive the car the most, how many miles you expect to put on the car in a year and what size car will best fit your needs. If children are a possibility in the near future, cars such as SUVs are the best and most reliable family cars. Take time to discuss what’s important to you and your partner and decide together what features are necessary and fit for your budget.
The best part about money is that you can make even more of it by investing in an interest-bearing account. Not only is a certificate of deposit one of the securest investments you can make, but the interest rate is also higher than with a regular savings account. You simply place your money in the account, wait until it has matured, then receive your initial principal plus interest rate. You can even augment the wedding money with regular payments from your paycheck in order to save money for a house, vacation or whatever else is important to you.
4. Buying a house
Buying a home is one of the wisest investments for newlyweds. While houses are the most expensive purchase most people will make in their lifetime, buying a first home is often considered the first step a couple makes towards building their life together. But, don’t allow your enthusiasm to exceed reason when buying a home; always make sure that your finances are in order first. Before applying for a mortgage, you’ll want to pay off as much debt as possible and ensure that you have enough in your budget to cover a house payment. If buying a home isn’t possible right away, consider putting your money in a savings account for a year or two, and then rethink the plan after you’ve been able to save up.
5. Buying something nice together
Marriage shouldn’t only be about investments in grand, costly things – it is perfectly fine to spend some of the money from your wedding gifts on something nice you’ll both love. Many frugal couples are so used to only buying second-hand or bargain goods nowadays that they don’t realize how good it can feel to treat themselves and splurge on something nice every once in a while. Assess your budget with your partner and see if you can make room for one practical, but still luxurious purchase, such as a large screen TV or a high quality bed. By choosing something that you can both enjoy for years to come, you are also making an investment in your future together.
Depending on your needs, your future plans and how much money you’ve received, it is up to you to determine what the best use of your wedding gift money is. As long as you carefully consider all of your options, you will be able to make the most of your gifts to start your new life together.