Hello friends, and welcome to Chapter Three of my wedding series!
Last month, we paid off our honeymoon, booked our florals, lighting, decor & photography, ordered my wedding dress, and went to two wedding shows. What an exciting and eventful month! Here’s what we did in the way of wedding planning in June:
Okay, we did one thing – researching wedding invitations. However, we were shocked to find how expensive they were. With RSVP cards, information cards, and menus included, they added up to over $1000! Good thing we decided to give it time, because we discovered a free wedding website that lets guests easily RSVP online and lets you add useful information, directions, menus, and even your very own love story. Awww. So, we’ll see what happens in July.
Still, ‘nothing’ stands true. In all honesty, June was simply a very long, tough month, for reasons that will hopefully soon be irrelevant.
So instead, I’ll be sharing with you something else: how my fiancé and I are saving up for our wedding!
Money and love. Couples’ finances. Sharing money as a couple. Whatever you want to call it, this is a topic I have wanted to write about for a while, so I figure this is the perfect opportunity. You will hopefully find some inspiration for saving up for your special event or ambitious goal: perhaps a holiday, a laptop, a car, or even a house.
To save up for our wedding, my fiancé and I are:
- tracking our income within our wedding timeframe
- working on realistic, timely savings goals
- growing and investing our wedding funds
1. Tracking our income within our wedding timeframe
To be sure that we will be able to pay for our wedding in full, we needed to ask ourselves:
How much income will we be earning between now and our wedding?
Doing this is simple. Do you get paid weekly? Great. How many weeks are there between now and the date the first of your balances are due (for example, the date you have to pay for the venue & catering)? Do you get paid fortnightly? Great. How many fortnights are there between now and that same date?
Total that up, and ta da – you have your number! Which is, hopefully, a large number to work with.
Note: I touched on this on Chapter One – if you want to see the chart I created to illustrate this method, you can go here.
2. Working on realistic, timely savings goals
Obviously, life isn’t free; we all need food to eat and bills to pay. So, how much can you comfortably save? What is a percentage you feel good about?
People think money is only about numbers; it isn’t. It’s about mindset. So to make sure you can make it happen, keep the momentum going, and stay motivated, another important question is: what is realistic?
For us, we have tried many ways ever since we started exclusively using only our joint spending and savings accounts in February, and have come to a percentage we are happy with: 40%.
How did we get to this figure? Well, earlier this year, I was reading a personal finance book that suggested the idea of living on one salary. It sounded like a challenge, but I liked it.
So, for a month, here’s what we did: every time we got paid, we deposited our entire pay into our joint spending account, then immediately transferred 50% to our joint savings account. The bank account transactions would look like this:
(Some context here: we earn a similar income to each other; just in different ways. He earns a fortnightly salary while I earn a weekly salary, weekly rental income, and occasionally extra income. Our salaries, while similar, are not the same, so this was the best way for us to ‘live on one salary’.)
The verdict? We could do it! We found that we could save 50% of our income and that living on one salary was possible. However, it felt limiting. We didn’t feel like we had enough breathing space. We couldn’t make any spontaneous decisions to go out for brunch, buy a little something we wanted or send extra to our debts, even if our savings were growing fast.
So we relaxed it to 40% and now, it is perfect – our savings are still growing reliably and consistently, but we have breathing space. Hooray!
Note: on weeks when we have something special or have more to pay for, such as a weekend getaway or a season of hockey fees, we use 30%. I know I have written about the savings rule of 50/30/20, where 20% is the savings goal, but since we are able to take advantage of our financial situation at this time of our life (joint income, both working full-time, no kids).. Why not?
3. Growing our wedding funds
We are growing our wedding funds in two ways: our regular emergency fund, and an account that I would personally describe as a half savings account, half PIE investment.
Remember that hilarious post by my friend & guest blogger Lucius, called When Shit Happens? I briefly mentioned that my partner and I were considering using our emergency fund for our wedding fund, then starting from scratch, making him more qualified to write about emergency funds at the time. Well, my fiancé and I have since found what works for us.
Our regular emergency fund used to be considerably large as it was based on Dave Ramsey’s Financial Peace University ‘Baby Steps’ that you should save 3-6 months of your living expenses in case you lose your job. His other ‘starter’ emergency fund is $1000.
We withdrew everything in our emergency fund but left $2000, $1000 for each person. (Coincidentally, $2000 is the also the initial amount you should have in your savings account as recommended by Scott Pape, aka The Barefoot Investor.) Since March or so, we’ve kept that $2000 in the account, a BNZ Rapid Save account – their highest interest-bearing bonus savings account.
Where did we transfer all the money? To Kiwibank’s Notice Saver, a savings account and term deposit in one. Technically, it is a PIE investment, with the bonus of being taxed 28% at the most compared to regular income tax rates, which can be taxed up to 33% (if your income is over $70,000).
This account means we can deposit money at any time, but have to give at least 3 months notice if we wish to withdraw. Why is it not a term deposit? Because with term deposits, you can’t deposit extra money whenever you want.
The interest rates were the highest available at the time we started saving, but have gone down since. BNZ’s Rapid Save was 2.20% when we started; it is now 1.90%. Kiwibank’s Notice Saver was 3.25%; it is now 3.10%. I’ll be exploring options and will share if I find anything useful!
In a nutshell
- We are keeping $2000 in an emergency fund, in a BNZ bonus savings account which we can withdraw from at any time. We chose $2000 as it’s $1000 for each of us; this amount will grow slowly and passively. Interest rate is 1.90%, soon to be updated!
- We took the rest of the money we initially had in the emergency fund and put it into a locked-away savings account / PIE investment account called Kiwibank Notice Saver. This account is the one we officially call ‘our wedding funds’. Interest rate is 3.10%.
- We save 40% of our income every pay and send it straight to our wedding funds.
- Knowing how much we are going to earn between now and our wedding, we know we will be able to achieve our savings goal and pay for our wedding in full – Queenstown wedding ceremony and Auckland wedding reception all inclusive, just under $30,000.
I hope you’ve found today’s post helpful and perhaps found inspiration for your own savings journey, no matter your goal! Or, you might have some recommendations or suggestions for what my fiancé and I could do better. Either way, I’d love your thoughts. As always, you can leave a comment below or contact me here.