Financial Advice for Newlyweds: What Should I Do With Wedding Gift Money?

It’s known as the post-wedding glow. That time after the DJ has spun the last song of the night, the top tier of your wedding cake has been tucked safely into the freezer, and you’ve traded your formal wear for sweats and yoga pants.

When you stare dreamily into the eyes of your new husband or wife and say to each other, “Let’s make smart financial decisions with all the wedding gift cash we just got!”

Okay, so it may not be the first thing you tackle in the hours after you say, “I do.” But how to spend that wedding windfall deserves some serious consideration.

“You’re in this relationship and you are committed to each other. So the same thing should apply to your finances,” said Trent Bryson, a certified financial planner and CEO of Bryson Financial in Long Beach, California. “Part of a marriage is you’re coming together and you’re starting to plan things together.”

Before you walk down the aisle (or at least before you start writing all those thank you notes) check out our dos and don’ts of spending your wedding gift cash.

Do start a joint savings account

While some couples prefer to keep separate bank accounts, it makes smart financial (and relationship) sense to set aside an account that’s for both of you. A joint savings account is a great team effort to save for major household items like kitchen updates, furniture, or new appliances. You can even it used to fund a vacation or for a baby and starting a family. Consider having an automated deposit from your paychecks and then discuss with your spouse how and when to spend the money you save.

Do build an emergency fund

Regardless of your financial situation, consider setting up an emergency fund. It can help you achieve your financial goals.

Tyler Dolan, a CFP with Society of Grownups, got firsthand experience with this “do” after he got married in 2014. He and his new bride sat down and made a list of financial priorities, starting with stashing away three to six months of income just in case.

“It’s really important to have something to fall back on in the event something unexpected happens, he said. And in Dolan’s case, the unexpected happened in the form of being laid off shortly after they were married. “Thankfully we had the emergency fund to draw from because, if not, we would have been totally scrambling and panicking.”

Do begin a joint retirement account

There’s no better time to get that nest egg started, Bryson said. And it’s also a symbolic gesture of your commitment to growing old together.  “The earlier you get started,” he said, “the better off you are.”

Two retirement plans to consider are an individual retirement account (IRA) and a 401(k). While you can only contribute to a 401(k) if your employer offers them, anyone can set up an IRA, and you have some choices—you can set up either a traditional or Roth IRA.

You can find out more about the differences between IRA and 401(k) accounts here.

Do save for a down payment on a house

This “do” is Bryson’s favorite way for new couples to spend their wedding cash because it’s both practical and fun. “It’s the most stable investment you can have,” he said of homeownership. “If they can use it as a down payment on a house that’s within their means, I think that that’s the best.”

Do pay off your student loans and credit card debt

Sure student and credit card loans aren’t sexy. But then again, neither is debt. “You are easing a burden together,” Bryson said. “And you’re saying, ‘Let’s remove this stress from our lives and pay this down so that we can begin the next step.’”

Do invest

Whether you are increasing your contribution to your 401(k) or investing for a medium range goal, 5 to 10 years out, make sure your money is working for you, Dolan said, “rather than having it sit in a bank account.”

Do consider life insurance policies

Talking about death isn’t the most romantic gesture. Think of it instead as caring enough about each other to make sure you’re protected. Getting started with life insurance right away makes smart financial sense for several reasons. First, the younger you are, the lower your premiums could be. Life insurance can also take a weight off your mind when it comes to providing potential income for your family, and for paying costly burial services in the event of a death.

Don’t blow it all on your honeymoon

This will not be the only vacation you take as a married couple. Instead of blowing all your cash on a far-flung, exotic and expensive honeymoon create those first memories together on a nice vacation that you can comfortably afford. “Spending more money on a honeymoon doesn’t create more happiness,” Bryson said.

Don’t keep the money under the mattress—or anywhere else in the house

This is Dolan’s No. 1 ‘don’t.’ That wad of cash and checks in your hand no doubt feels good, but it’s not safe to keep it lying around, even if you think it’s well hidden. “Stuff happens,” he said. “There could be theft, there could be fire.” Put that money in a bank account as soon as you can.

Don’t buy a brand new car

No one wants to drive off into the sunset in a 10-year-old beater, but a short-term reward is not the best use of your wedding gifts. With a major (and possibly unnecessary) splurge, “you’re already kind of tainting the idea of something permanent,” Bryson says. “If you’re getting this gift and you really want to set yourself up for success, think about it in the long term, just like you are committing to the relationship in the long term.”

Don’t forget to treat yourselves just a little… and within reason

It’s your wedding! You have a wonderful reason to celebrate and, thanks to the gifts, a way to do so. But the key, Dolan said, is to make it a splurge rather than a spree. He and his wife decided to add a few wedding-gift funded extras to their honeymoon, like a sunset sail or a nice dinner together.

“It’s okay when you are sitting down with priorities and goals to say, ‘Let’s have a little bit of fun,’” Dolan said. “Not with all of it, but it’s important to understand that life is short.”