Before You Spend Your Wedding Cash Gifts

Keep track of how much each guest gave you. This will be helpful when you are writing your thank you cards and looking for the most appropriate adjective – generous versus very generous, for example. Most importantly, you'll be able to determine how much you should give your loved ones when they get married or invite you to other celebrations such as naming ceremonies, baptisms, bar and bat mitzvahs, etc. You’ll have to adjust for inflation, the type of event, and the location, but it will give you an idea of how much you should give, which will help you budget accordingly in the future.

The next step is adding how much money you have in total. Once you know what you’re working with, you can start deciding what to do with it all. The first thing you should do is pay off any debts you have. A marriage can start off on the right foot more easily when the couple is in the black. Depending on how much you still have after paying off debt, you can decide to spend 5 to 10 percent on something fun such as your honeymoon or a big-screen television.

Then, you should take whatever is left over and start thinking about how you’d like to save or invest your money. One option is to stagger your money in 75-day CDs and money market accounts that garner more interest than a checking account. Start these accounts with your wedding money and then allot a certain amount of your paycheck each month to invest in them. This is the least risky way to hang on to money because the bank is generally secure and the money should only grow.

It's never too soon to start thinking about retirement. If you have an eye on the future, you can put some of your wedding money in a 401(k), which some employers match dollar for dollar, or an IRA (Individual Retirement Account). Taxes are deferred on both until you withdraw the funds. You should only do this if you are ready to leave this money alone because if you withdraw before retirement, you could face a tax penalty. If the cash stays put, you will be able to travel the world, or buy the beach house you've always wanted (to name a couple of options), when you're finished with your careers.

High rollers can consider investing in the stock market. Head to online brokerage firms and read the financial papers to keep track of the ups and downs of the markets and carefully choose a stable company in which you'd both like to invest. Some couples choose stock in companies that are meaningful to them such as a music label that recorded and sold their song. But, especially if you’re not experienced with the stock market, you should only invest a small amount. It's the riskiest avenue because the market can be volatile. Mutual funds, for which a financial firm creates a portfolio for your money, are much safer.

Another clever way to spend your wedding money is to put it toward a down payment on a house. Real estate is almost always a sure bet if you are careful about the property you choose. Make sure it passes inspection and there are no major problems that will cost you later, such as poor plumbing or fire hazards. Your home will generally increase in value, and paying rent, while sometimes necessary for young couples starting out who can’t afford a down payment and mortgage, does nothing to beef up your financial credentials. Essentially, rent is money lost.

If your goal is to have children in the future, then you could also start a separate account for them. Let’s face it: Their education will be super expensive if they choose to attend a four-year college or university. The time leading up to college is costly, too. Think about diapers, food, a flurry of activities – from soccer to ballet – clothes, and other essentials. In other words, having kids can be rewarding but also expensive. There’s no time like the present to start saving, so you can afford children.

Those interested in going to graduate school can put their wedding money toward their education. Every little bit helps, but most young couples still have to take out loans for graduate school, which can cost upward of $40,000 per year. Still, the return on investment could be worth it. For instance, students who attend graduate business school often come out with jobs that have them earning more than $90,000 annually. That could make for a nice life down the road. The good news is that while one of you is in school, you can also get a tax break.