Paying for your white wedding

Fathers worried about footing the bill for their daughter's big day; can breathe a sigh of relief - the tradition is fast becoming a thing of the past. These days, around 80% of couples pay for their own wedding, easing the financial burden on parents but heaping it on for newlyweds. But while money cant buy you love, it certainly helps when it comes to splashing out on your big day. The average cost of a wedding is now an eye watering £19,500, leaving many couples big day memorable for all the wrong reasons.

"The cost of a modern wedding continues to rise, and whilst a wedding should be the most important and enjoyable day of your life, it does come with a hefty price tag attached," says Richard Al-Dabbagh, Head of Personal Loans at Alliance & Leicester. "Getting the finances right is probably just as important as the choice of reception venue, entertainment or even the rings. That is why it is essential that you budget well."

Huge increases in food and fuel and the rising cost of inflation have left the dream of a big white wedding out of many couples' reach, but the good news is that if you start planning your wedding well in advance you can cover the costs involved.

Saving for the 'big' day

A nest egg is essential if you want to fulfil your dream of a big white wedding. Start putting a percentage of your salary away each month as soon as you announce your engagement. Shop around for the best home for your savings with the same vigour as for your wedding venue. Among the best regular savings accounts are Barclays paying 7.75% AER and Abbey paying 7.25% AER on maximum deposits of £250 per month

But do bear in mind that if payments are missed on regular savings accounts, there may be penalty of a reduced interest rate, loss of an annual bonus or the account may even be closed. "Couples should really only consider a regular savings account if they can commit a set amount each month," says Darren Cook of Moneyfacts, "Otherwise the penalties for missing a payment or making a withdrawal can wipe out additional interest earned."

Which is the best savings account for you? Let Moneyextra guide you to the right choice with our comparison service.

Consider using a cash individual savings account (ISA) so that money which might have lined the taxman's pocket will instead go towards your champagne! You may each save up to £3,600 during each tax year and any interest earned is paid free of tax. Among the best buys are HSBC and Barclays, both offering instant access cash ISAs at 6.25% AER.

Borrowing for the 'big' day

But for those who do not have the time to save for their big day, borrowing may be their only option. Personal loans should first be considered for wedding expenses before credit cards.

Want the personal loan that is right for you? Find it with Moneyextra's comparison service.

Yet if you genuinely think that you can repay quickly any debts accrued, consider a 0% purchase rate credit card. Try to use credit cards for large purchases, such as the ring or deposit on the venue, as you are protected by section 75 of the Consumer Credit Act. So if the goods don't turn up or are damaged, you can pursue the lender as well as the retailer for breach of contract.

If you can afford to pay for your purchases in full every month, opt for a cashback credit card. This will enable you to earn up to 5% cashback.

26 June 2008 © Moneyextra.com

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