Wedding Cash Gifts: Smart Financial Planning for Newlyweds

Got a bundle of cash for your wedding? Here's how to put it to good use.Image source: Getty Images.

It's no secret that getting married costs a bundle of money. The average U.S. wedding tab is $33,391, according to The Knot, and in some parts of the country, it's considerably more. 

The upside? You'll probably come away from the big event with a pile of cash and checks. In fact, your wedding could wind up being your single largest payday in your adult life, especially if you have a large number of guests. But tempting as it may be to blow that money on a luxury honeymoon or indulge in a host of fun purchases (think a new sports car or perhaps a boat), you're better off using it responsibly. Here are a few smart things to do with the cash your wedding guests generously gifted to you. 

1. Build an emergency fund

Without emergency savings, you could be forced into debt the next time an unplanned bill lands in your lap. Not having savings could also introduce a layer of stress into your marriage, and that's not what you need when you're trying to start a life together. The good news? If you're sitting on a pile of wedding cash, you can use it to build your emergency fund. That way, you'll have some protection from life's unknowns.

Ideally, your emergency fund should have enough money to cover three to six months of essential living expenses. That amount of cash could also, conceivably, tide you over during a period of unemployment. 

2. Pay off your wedding debt

If you racked up debt in order to pay for your wedding, it's imperative that you knock it out as soon as possible. Even if you charged those expenses on a credit card with a low interest rate, or, better yet, a 0% introductory APR, you must pay off that debt quickly before interest accrues and you wind up spending more on your wedding than you ever imagined. 

Another thing -- if you carry wedding debt for too long, you could wind up regretting it. And that's not the sort of sentiment you want to associate with such a special day. 

3. Pay off other debt you're carrying

Maybe you took out a personal loan a year before your wedding. Any type of debt can be a source of stress in a marriage, so rather than let it drag on, use your wedding money to make it go away. Doing so could help you achieve other milestones faster -- milestones that are important to you as a couple. For example, some people hold off on building a family when their finances aren't solid, but if you pay off your debt (or a large chunk of it) with your wedding cash, you might feel comfortable expanding your family sooner. 

4. Save for a home down payment

Many couples choose to become homeowners once they're able to combine financial resources and better afford a mortgage. If that's your plan, then your wedding money could end up serving as your home's down payment. And that's important for a couple of reasons. 

First, if you're able to put down 20% of your home's purchase price, you'll avoid private mortgage insurance, or PMI, which is premium that gets tacked on to your monthly mortgage payment, thereby making it more expensive. Just as importantly, the more money you put down on your home, the sooner you can build equity in it and use it as a financing source should the need arise. 

A wedding is certainly a milestone worth celebrating, and if you're coming away with a load of cash gifts, even better. Use that money wisely so your marriage can really get off to a solid start.