Help Me With the Math (re: Making Weddings)

Diamond Member Joined: Dec 28 2005 Posts: 4656

On the footsteps of other active threads addressing weddings and finances:

If you've married off kid(s), how did you do it? Please specifiy Israel, US, etc. and feel free to post anon. Did you start saving early? Take out debt? Other?

I am really most curious about how the numbers worked.

IE - saved up $X per month for Y months which gave us $10,000 by the time child was engaged. Or - racked up $10,000 on the credit cards. Or took a home equity loan or second mortgage.

And what about when another child gets engaged not too long after?

I have not married off children yet. But we are saving now. This is how we are doing it.

Every month we have $100 deducted directly from our savings account and placed into a mutual fund. We are hoping that at a point (we don't know when yet) we will be able to stop putting in for each child and we hope that the mutual fund will keep on earning on its own so we can build up for the younger children. We start as soon as our kids are born. If it gets to be too much we plan on decreasing the amount to $50.
Based on what our financial advisor told us its better to do this for a number of years and put in the money monthly rather then yearly. This way when the market is down your buying at a huge discount and when the market goes up you end up with more, and that helps you be ahead eventually. He was saying that people who used this method, even if they bought mainly when the market was up, and their kids got married when the market was down, they still came out tremendously ahead. He gave us references to call of people who had that situation who were marrying off kids now and they agreed that it worked for them. We are only putting the money in very secure, non-risky mutual funds and hoping that it will work for us.
Call me in 12 years and I'll let you know. Wink

My parents took what they had on their account (money not saved but just not spent, that generally went to big vacations in summer every year), my dh brought the same sum. We could have done with a lot less if need had been. Though it seems that for Imamother it was a cheap and small wedding (quality vs quantity Wink

)

We got married in Israel.
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"You will have many many children and make successful shidduchim beh", rebbetzin Esther Jungreis
"It's all cultural, disagree respectfully", me

Diamond Member Joined: Dec 28 2005 Posts: 4656

I like your wavelength, amother.

Is the $100 monthly for one child or more than one?

We do something similar � have a set amount each month direct deposited into a money market account, starting when each child was born (or more accurately, when I went back to work after a 3 month maternity leave).

There are 4 factors here � time, interest rate, monthly investment, and yield at the end of the term. With 3 being known, the 4th can be determined. We wanted that in 20 years� time we�d have $X (known to us; theoretically enough in today�s dollars to more than cover one side of a wedding + a year in Israel). Interest rate we put at a realistic 4% (the rate that the money market was making a few years ago when we started; more about that). So then we could calculate the monthly investment needed to make that happen.

I wanted steady, secure investment (ie � it all there when we need it) so put that over potential larger growth. I would consider investing in a low risk mutual fund but if money market was making 4% that was enough for me and with no risk. Of course, rates dropped (that same money market is currently at 1.10% and now I just use it as a holding point) so I searched for other options until I found a 7 year CD that was at 3.60%. I transferred the accumulated earnings to that and am kicking in the additional .40% (which is less than $5/month with what�s currently in the account). I can�t add to the existing CD, so every 4-6 months I am re-buying new CD�s � all online.

Truthfully, I find a lot of naysayers to our savings plan. I don�t know why. I have gotten countless �how do you know you�ll always be able to continue saving at that rate� or �just wait �til your expenses go up because of X� or �what if you can�t save for younger (theoretical, not yet born) kids the way you are for older ones � how is that fair?� To me it is obvious that just because I don�t know what the future holds doesn�t mean I shouldn�t do smart savings TODAY.

Platinum Member Joined: Aug 12 2007 Posts: 20496

I don't know much about investing but $10000 put in a mutual in April 2007 isn't worth that much now. It was down in the 4000 or 5000 for a while and now is at 9200 or so. What once was considered "cant' lose" is volatile now. From my understanding, when the mutual doesn't perform well (or something like that), you get dividends so that the amount of your shares grows. Ideally, when the mutual fund goes up, you have more dividends, so you have more money.
Whatever, nothing is very impressive these days unless you are willing to be risky. Or, invest in the Israeli stock market Very Happy

I'm the amother who is saving now.
We put the money seperatly into an account for each child.
We don't know if we will be able to save this way in the next few years, but why should that stop us now? At least we can do it now. Our hope is that we won't be putting in for each kid until their wedding but will be able to start earlier and let the account grow during that time.
We are also assuming that when our first gets married we will have more expenses then when our younger children will get married. Its impossible to know, but its a pretty good assumption considering we will be having more tuition etc then.
I feel like at least I'm trying.

Also, regarding Israel Yeshiva and seminary expenses DH is saving into some sort of 401 K that allows you to deduct tax free for college, and you can use that for Israel yeshiva and seminary, so we are saving there assuming that we can use that money if we need it then, we do save a lot in taxes by doing that.

Diamond Member Joined: Dec 27 2005 Posts: 2805

check out this week's Binah (Monday Oct 25th issue)-- there was a huge, comprehensive write-up about how 3 diff families with diff incomes make a wedding.

personally, my weeding was mostly paid by settlement money for an injury. siblings weddings my mother got her degree and started working when I got married, most of the money gets saved for them

Diamond Member Joined: Dec 28 2005 Posts: 4656

Diamond Member Joined: Dec 27 2005 Posts: 2805

Platinum Member Joined: Nov 01 2009 Posts: 8215

We aren't specifically saving for weddings - we have a general fund for each kid. That money can cover college, wedding, downpayment etc. How they budget it will be up to them. At least, that's our plan right now.
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Never mistake activity for achievement.

Some put away their children's child allowance (in EY) for that adding Bar Mitzva and birthday money.
They start when the children are born.
Others start around Bar Mitzva time and invest that money and add monthly.
A third group - big in EY at least - pays for the wedding out of the wedding present checks. Anything leftover goes to the chossen-kallah.
A fourth group counts on grandparents to pay.
A fifth group borrow money from the bank when the children want to get married.
A sixth group use gemachs with no interest.
A seventh group goes around and borrows from all the relatives.
And some just have enough income that if their children are of the right age they just put away a monthly sum for a few months and it's all covered.

Depends on your income, number of children, family status, expectations etc.

And Ruchel that crack about quality and quantity really wasn't necessary. What about "disagree respectfully"? That remark was rather under the belt..
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"Olam Chessed Yiboneh", Tehilim 89.

We transfered about $20K in investments that were doing well (so far David Lerner REITS at ~8% interest) to each child shortly after they were born. This, plus all interest that accumulates over 20 or so years, iy"H, is to be used for weddings/early marriage/other expenses.

Additionally, we put away about $2000 (maximum amount) in an education fund (I don't remember its name - it grows tax-free) per child each year. We hope to be able to put in about $10000 total for each child, to cover college and/or post high-school yeshiva tuition (though I think that this account may be used for elementary/high school education as well).

B"H we were able to do this for the first couple and hopefully we will be able to do this with all other children to be born, iy"H. (Don't get the wrong impression, we are not wealthy, we just are very careful with what we spend, happily so, and save as much as we can.)

Diamond Member Joined: Dec 28 2005 Posts: 4656

ILL - I think it may have been removed. Truthfully, there were a couple of spinoffs and I don't even remember which one I posted in.

I will try to re-post my thoughts on the Binah coverage specifically but it will have to wait until I don't have a bouncing toddler on my lap.

Diamond Member Joined: Dec 27 2005 Posts: 2805