Money-Smart Ways to Save When Attending a Wedding
Kiplinger's associate editor Miriam Cross talks wedding guest etiquette and offers tips on how to attend without breaking the bank this summer. Also, hosts Sandy and Ryan explain the advantages of investing in 529 college savings plans.
Ryan Ermey: Wedding season is upon us, and you know what that means, paying for flights and hotels and dresses and gifts, and sheesh, it's a lot. In today's main segment, associate editor Miriam Cross joins the pod to talk about how you can save on the cost of attending weddings this year without looking chintzy or cheap. On today's show, Sandy and I fill you in on 529 college savings plans, and unveil a brand new edition of Deal or No Deal. That's all ahead on this episode of Your Money's Worth. Stick around.
- Episode Length: 00:28:48
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Sandy Block: I'm good. Good.
Ryan Ermey: We have an opening segment today on 529 plans with the conceit being that this week 5/29 is going to be on the calendar. It's 529 day, and it's something that we've talked about a little bit on the show before. We thought this would be a good opportunity to go a little bit more in-depth on it. A 529 plan is a type of investing account that comes with major tax benefits if you use the money to save for education.
Sandy Block: That's right. The contributions you make into these plans which are offered by every state are after tax. Your money grows tax-free and your withdrawals are tax-free as long as you use the money for qualified education expenses. The list of qualified expenses is quite long, not just college tuition, but room and board, supplies, textbooks, computers, everything that basically you need to go to college. It isn't just a four-year liberal arts school that you can use this money for. You can use it for a vocational school, for a community college. The ways that you can use these funds is quite large.
Sandy Block: The reason that we wanted to talk about this in addition to it being the 529 day is that one of the most talked about stories this week is the story about the commencement speaker at Morehouse College announcing that he was going to pay off everybody's student loans. I don't think your kids or you can count on that happening when you graduate. I got to say, that really sets a high bar for future commencement speakers.
Ryan Ermey: Do you remember who your commencement speaker was?
Sandy Block: No, but I definitely know that she did not pay off my loans.
Ryan Ermey: Mine was Kerry Washington, the actress.
Sandy Block: She didn't pay off your loans?
Ryan Ermey: She didn't, so Kerry, if you're listening.
Sandy Block: You still got those loans.
Ryan Ermey: I still got debt.
Sandy Block: That's right, I could get you some good exposure. That's not going to happen. Student loan debt as we know is a crisis. If you have kids, starting early is one of the best ways to help them avoid that. One of the nice things about 529 plans, unlike a lot of people have a problem with IRAs because they need $1,000 to get started, you can enroll in a 529 plan for nothing. You can put in as little as 25 bucks a month. You don't have to put a lot of money in, but if you start early that money will add up.
Ryan Ermey: One of the things that we talk about a lot in our coverage of 529 plans is that there are many states that offer a tax break, so in addition to the federal tax break you get, you can also get a tax break at the state level in certain states if you use their plan.
Sandy Block: You can use any state's plan, but very often you get a nice tax break by staying in your own state. If you live in one of the nine states that has no income tax, look for a plan anywhere that has low fees and good investment options. Vanguard, which we like, offers a lot of 529 plans. That's a good place to start.
Ryan Ermey: Any sort of investment we want low fees and, like you said, we have a list of plans that we like, if you happen to live in one of the states where you don't get a benefit, so you can just shop around for whatever you like. The benefit that you're going to get from contributing to your own state's plan if they offer a benefit will likely offset any advantage that you would get by paying lower fees elsewhere.
Sandy Block: Another thing I want to mention about 529 plans is the flexibility that they offer. You have to name a beneficiary, and a lot of people worry that they'll set up a 529 plan for their son, and he'll turn out to be a fabulous football player and get a full ride, and then they've got this 529 plan. Well, you can easily switch the beneficiary to your non-athletic child, or anyone else.
Ryan Ermey: Could still be athletic.
Sandy Block: I was going to say your piano playing child, but maybe they get a scholarship too. To your child who didn't get a scholarship.
Ryan Ermey: I hope all of our listeners' children get scholarships.
Sandy Block: Me too, but they probably won't, so it's easy to switch beneficiaries. The other thing you can do is use it yourself. You can make yourself the beneficiary and send yourself back to school for graduate school or continuing education. There are lots of things that you can do with these plans. As I said, because you don't have to put a lot of money in, you can start early. Another great thing about them is other people can contribute to them too. You can encourage grandparents or aunts and uncles or friends to contribute to your child's 529 plan instead of giving them a toy that they'll break or something like that. Maybe you would want to give them a toy and a contribution.
Ryan Ermey: Yeah. I was going to say. Not too many kids are excited to unwrap their 529 plan contribution.
Sandy Block: Thank you grandma. You're the best. They will thank you when they graduate without any student loans. They offer a lot of options. We'll put some things in the show notes for more information on how to find the best option for you. If you have kids, I really think this is a great way to start saving for college and set them up for success without student loans.
Ryan Ermey: One more thing, do they affect your financial aid?
Sandy Block: Money in a parent's 529 plan has very little impact on financial aid. There is one caveat here for grandparents. Some grandparents might think that they want to set up their own 529 plan and name a grandchild as the beneficiary so they can get the state tax deduction. The problem with that is that the financial aid formula treats withdrawals from a grandparent 529 plan very differently from a parent's, and it could actually hurt the child's ability to get financial aid in subsequent years.
Sandy Block: If you think the child is going to be eligible for need-based aid, the best thing a grandparent can do is just contribute to the parent's plan.
Ryan Ermey: Got you. There you have it. Up next, Miriam Cross talks budgeting and etiquette for wedding season. Don't go anywhere.
Ryan Ermey: We are back, and we're here with Kiplinger's associate editor Miriam Cross, who I'm excited to talk to today because the topic of our main segment is wedding season, which is beginning. As we know, this is Memorial Day weekend, and we have all kinds of money questions. I have a slew of weddings coming up. Miriam, thank you for coming on. Hopefully we can clear some of this stuff up.
Miriam Cross: Thank you for having me.
Ryan Ermey: I think the number one thing that people tend to ask about is, is it true that you're supposed to give a gift that's equal to whatever your plate costs at a wedding?
Miriam Cross: That is so outdated. How do you even know how much your plate costs?
Sandy Block: The first time I heard this rule, one of my relatives went to a wedding where I think it was maybe mafia funded, where they had surf and turf.
Ryan Ermey: Like Tony and Tina.
Sandy Block: It was filet mignon, and lobster tails, and she calculated that the plate was worth at least $150. This was in the Midwest. It would be more here, and that her gift as a result had to be worth at least that much. That was the first time I'd heard that rule, but I've heard it since, other times.
Miriam Cross: Then it's like you're asking your guests to pay for your wedding.
Sandy Block: Well, yeah.
Ryan Ermey: What should the rule of thumb actually be?
Miriam Cross: There is no set amount about how much you should be giving as a wedding gift. I did some searching on this before I came in here, because I was curious what the internet says, and there are all kinds of answers. A minimum amount people often recommend is $50, but I don't think that's fair. I think it really depends on your financial situation and what you feel like you can comfortably afford to spend, how close you are to the couple, how far you're traveling to the wedding.
Miriam Cross: Because if you're going to a destination wedding and you're buying flights and hotels and arranging for childcare, then you don't even need to get a gift if you feel like the cost is prohibitive. Also, how many other weddings you're going to this year.
Ryan Ermey: Like I said, I have a slew of them. I'm at that age, I'm 28. It's like every summer now is a whole agenda of weddings, and some of them you got to travel for, and some of them you don't. What are some strategies for perhaps reducing the cost of going to one of these things? Maybe we should start with the gift. How do you reduce the cost? Are there ways to reduce the cost of a gift?
Miriam Cross: Yeah. There are a bunch of ways to reduce the cost without looking cheap or tacky.
Ryan Ermey: That's what I was really asking.
Miriam Cross: You want to look at the wedding registry pretty early on. Hopefully the couple will have a range of items at different price points. If you look early, then you could choose something that fits your budget. One thing actually a friend of mine told me recently, when she got married she found a lot of people were going for the bigger ticket items and they weren't buying the small items.
Ryan Ermey: Like the knickknacky things.
Miriam Cross: Right, but they want those too.
Sandy Block: Yeah. They signed up for them.
Miriam Cross: Right, so there's no shame in getting something smaller.
Ryan Ermey: Well, my strategy has always been like put together a couple of the smaller things from the registry and hopefully thematic. If you can get a couple of different sets of bowls or whatever, and then you write a really nice card which is my Christmas gift giving advice as well, I think. If you write a really nice card, it forgives a lot of your other sins, I think.
Miriam Cross: For sure. Another thing I've noticed couples have been doing more and more in their registry is, and maybe you found the same, is they'll offer the option to donate to a few causes in their name. That is something you can do instead of giving a gift, even if they don't give the option. If they do, it makes it easy. They'll list some charities they support, and then you could donate whatever amount you feel comfortable with. Again, send them a really thoughtful card.
Miriam Cross: It's also a tasteful alternative even if they don't list any charities, but you're close enough. You know what causes they would support, and you can do that instead of giving a gift.
Sandy Block: Miriam, more and more couples are getting married later and they say they don't need anything, and they're just asking for money. First of all, do you think is that considered good etiquette? Second, if they're asking for money, how do you decide how much to give? How do you make it personal? Because it seems like writing a check while easy is kind of cold.
Miriam Cross: I think it's perfectly fine. Ideally you want to give them a gift that they're going to use. Depending on when you get married, you probably have a lot of houseware so you don't need more. Some couples do a honeymoon fund, or their registry will list what their-
Ryan Ermey: I have one of those.
Miriam Cross: They'll list what they want, so that makes it feel a little more personal. Otherwise, cash or a check is fine. Again, this is where the card comes in, so write something personal. If you want, you can add something like a little gift on top of that, like a picture frame, something that you know they'll use.
Ryan Ermey: What if you can't go to the wedding, especially with one of these big destination weddings? They're going to Fiji. Do you have to send something? What's the etiquette there?
Miriam Cross: It depends how close you are to the couple. If this is someone-
Ryan Ermey: How much you like them.
Miriam Cross: If this is someone you're very close to, then a gift is a really nice gesture to say that in any other situation I would be there. If they gave you a gift for your wedding, then you want to give them a gift also. I'd say also if you RSVP yes and then you can't come at the last minute, then you want to give a gift. If this is someone you're not that close to, it's a relative you never see or, I don't know, your old college roommate who you lost touch with, you can just put some kid wishes on the RSVP card and call it a day.
Sandy Block: What about I've got invited to a lot of wedding showers for friends and family that are here, that live far away. I appreciate the invitation, but if I'm going to go to the wedding in a few weeks, I'm not going to get on a plane and go to the shower. What's my obligation if I'm invited to a wedding shower and I can't attend, or an engagement shower?
Miriam Cross: You don't need to send a gift.
Sandy Block: Good. Because I didn't.
Ryan Ermey: That speaks to though especially if you're in the wedding, or if you're involved with a lot of the events. Especially on the bride's side, you end up with a shower and a bachelorette party, and you might have to pay for a dress and to get your hair done and all this stuff.
Miriam Cross: It's crazy.
Ryan Ermey: I think part of etiquette, and you write more about money etiquette than I do, but whenever I've talked to these people they always say that part of good etiquette is not overextending yourself financially to try to appease your friends or what society expects of you or whatever. How do you go about navigating that if you can't afford all of these different things?
Miriam Cross: If you're part of the wedding party.
Ryan Ermey: I'm invited to a bachelor party. It's going to be in San Diego. They're going to have a ton of different events. They have like race car driving and all kinds of stuff. I don't know if I can do all of that stuff, but I also don't want to be that guy who is skipping out on all the fun stuff.
Sandy Block: And just going straight to the bar.
Miriam Cross: You're not obligated to attend pre-wedding events, though sometimes it's hard not to. Then you have a lot of FOMO if you're missing out on that bachelor party in San Diego. First of all, I think the tone is really important if you are skipping out on events. You just want to sound casual about it and not annoyed about how much money one is expected to spend. Depending on how close you are with the bride and groom, I think it's okay. You can also mention sometimes if you want to be in the wedding party, but you don't feel like it's within your budget this year. You can bring that up.
Miriam Cross: Some friends of mine who've, for example, the brides have covered their hair and makeup, or sometimes even the dress, because they want people in their wedding party and they don't want it to be a burden on people.
Sandy Block: Miriam, in addition to being our money etiquette expert, you're also our travel expert. As Ryan mentioned, a lot of times weddings do involve a lot of travel. Do you have some tips for us on you want to go to the wedding, but it's on the other side of the country, and how can you save money and show up?
Miriam Cross: Well, especially if you're close to the couple, you can definitely ask them for their advice or their help in this area. In the past when I have traveled for weddings, the bride has put me and my friends up with people they know in the area, so I wouldn't have to pay for accommodation.
Ryan Ermey: That's nice.
Miriam Cross: Yeah. I feel like, in terms of flights, this is where price alerts can come in really handy. Usually the idea annoys me because I don't have dates in mind or a place in mind. I'm just willing to go anywhere, but you have dates in mind for the wedding so set up a price alert well in advance so you can buy when the ticket gets cheaper.
Ryan Ermey: That's Google Flights has that feature, Kayak or whatever... has that feature.
Miriam Cross: Yeah.
Sandy Block: A lot of times when I've been invited to weddings, they'll say they've booked rooms at a hotel. I don't know if you've looked into this, but is that the best deal or should you look at see if you can get something cheaper? Do they get a discount when they do that, do you know?
Miriam Cross: I know when I've looked at wedding websites for the hotel block they often seem pretty good. Like everything, it pays to shop around.
Sandy Block: You want to check.
Miriam Cross: Yeah... see if there was a home rental nearby or a different hotel, or, like I do, see if the bride or groom can put you up with friends of theirs.
Ryan Ermey: Before we let you go, Miriam, do you have any personal tips or stories, money-saving hacks that you've had at your weddings that you've attended?
Miriam Cross: Well, when it comes to buying a gift, I'm always a fan of the Bed Bath & Beyond registry, because I always have a ton of 20% off coupons.
Sandy Block: No one will know.
Miriam Cross: Exactly. Your $50 gift then becomes $40.
Ryan Ermey: I'm pretty sure I signed up for the email list at The Container Store or something to get the 15% discount to spend on some bowls or whatever.
Miriam Cross: You can do the same thing if there's an Amazon registry, if you have Amazon cashback or Amazon coupons you want to use. Again, that's why it's good to look at the registry early on before everyone's snapped up the stuff you wanted to buy.
Ryan Ermey: There you have it. As soon as you get that, save the date. Set those price alerts. Take a look at the registry. Try to get out ahead and budget for, I mean what for me, is going to be a very busy wedding season. Miriam, thank you so much for coming on.
Miriam Cross: Thanks for having me.
Ryan Ermey: Angie's List is free to use, but is it really the bargain it's cracked up to be? Find out in a new Deal or No Deal segment next.
Ryan Ermey: Before we go, Sandy and I wanted to bring you yet another edition of Deal or No Deal. This is timely on our end because we are just putting the finishing touches on the July 2019 issue, which will feature a whole slew of deals in all of the different arenas that we cover. We wanted to give you a little bit extra. I have some extra reporting on some of my deals. First of all, one that I got to try out that I had mentioned on a previous episode of this show is a service called Trim.
Ryan Ermey: If you didn't get a chance to listen before, you sign up for the service. I hooked up my credit and debit account, and so one thing that it does is it identifies recurring payments. For instance, it picked up that I pay $10 a month for MoviePass, which, by the way, I just discovered this past weekend, my...
Sandy Block: Still works?
Ryan Ermey: ... MoviePass still works. Yeah. I have to bring the card. It's a little bit of a different system, but it's still functioning, still part of what seems to many people to be a Ponzi scheme, but it is still...
Sandy Block: Use it while it lasts.
Ryan Ermey: ... working.
Sandy Block: You're still seeing the movies.
Ryan Ermey: I went and saw Amazing Grace, which is a fantastic Aretha Franklin documentary.
Sandy Block: I want to see that.
Ryan Ermey: You got to go see it.
Sandy Block: Documentary. Yeah.
Ryan Ermey: It's unbelievably moving.
Sandy Block: She's awesome. Good call.
Ryan Ermey: That's beside the point. The other thing that Trim does is it will negotiate your bills on your behalf and charge you a percentage of whatever they save you on an annual basis if they manage to get you some savings. I tried it right after I had upgraded my Comcast service. I wasn't expecting there to be much. I literally just signed a new contract, which means that they can't give me all that jive about, "Things have gone up. We doubled this." They're making us...
Sandy Block: We don't want you to leave.
Ryan Ermey: ... pay for more channels, this whole thing. They did find some sort of frivolous charge that I had incurred. It was like a service charge. I don't know, it was like five or six bucks, but, hey, it was five or six bucks that comes back to my pocket. I paid them a couple of bucks, and...
Sandy Block: You get the rest.
Ryan Ermey: I get the rest. They are going to do that on an ongoing basis, and I don't pay unless they save me money. To me that is very much in the deal category. The other thing that I talk about a little bit in this issue is deals on decluttering. Well, remember that our friend Heather Cocozza came on from the National Association of Productivity and Organizing Professionals, NAPO if you'll recall. Came on and told us how to save money by decluttering, the whole Marie Kondo method.
Ryan Ermey: I wanted to look at deals on getting rid of your stuff. What you'll see in the magazine, I mentioned a couple of organizations, Salvation Army and Habitat for Humanity's ReStores. They will come to your house and pick up your stuff for free.
Sandy Block: That's definitely a deal.
Ryan Ermey: Now, what they'll accept varies. Salvation Army will pick up furniture. They'll pick up a car. They'll go to the second floor of your house or your basement to get stuff, so if you don't feel like lugging that gigantic sectional couch up the narrow basement stairs. I always wonder in these situations how I got these things into my house. I can never get them out, and I was like, "How did I get it in?"
Sandy Block: You were younger then.
Ryan Ermey: Yeah, or I don't know. That's an option. Another interesting one that I saw was Give Back Box. Now, a number of retailers partner with this service that allows you to print mailing labels, put it on a box and donate gently used clothing, shoes and accessories. If you use one of these partners, they cover Give Back Box's fee, so it's free to you. There's a bunch of stores that do it. Levi's is one, Ann Taylor, Amazon has a partnership. The idea is that they want you to reuse all of these boxes that you're getting shipped to your house.
Ryan Ermey: You take all the stuff you want to donate, stick it in a box, print one of these shipping labels off for free. Like I said, these partner businesses cover it, and UPS or USPS will ship your stuff off for it to be donated. Then the last thing I wanted to touch on that didn't make it into the magazine is that there are plenty of places that if you actually get up and go to the store to donate things, you get credit to the store for bringing it in, so DSW ...
Sandy Block: H&M.
Ryan Ermey: ... gives you bonus points. H&M. Dropping off unwanted textiles in any condition at...
Sandy Block: Right, which I'm going to do.
Ryan Ermey: ... H&M will get you a voucher. Me too. Madewell.
Sandy Block: Madewell will use your jeans for building materials or something like that.
Ryan Ermey: You'll get $20 off a new pair. The North Face is another one that will accept apparel and footwear in any condition, any brand, it doesn't have to be their stuff, at one of their stores, and you get a $10 reward toward your next purchase of $100 or more at The North Face. It's not megabucks but in terms of getting rid of your stuff, doing good, we classify all of these things as deals.
Sandy Block: Really good deals. Ryan, mine is a not very good deal, and it's Angie's List. Angie's List has been around for a while, and originally they were the first crowd funders, because you had to pay to subscribe, and then you were able to read reviews of many, many businesses that belong to Angie's List.
Ryan Ermey: That do work around your home. The contractors.
Sandy Block: Plumbing. Yeah. Contract. The idea was you can find someone to do your gardening work, your plumbing, or any kind of services that have been vetted by other people. About a couple of years ago it changed the model, and now it's free which sounds like a deal.
Ryan Ermey: Which sounds like a deal.
Sandy Block: But is supported by advertisers. In a report a few weeks ago, the Consumer Federation of America pointed out that when you go to Angie's List now and find a list of top-rated pros, those top-rated pros are people who have paid to advertise on Angie's List. The top-rated pros are suspect. The other thing that the Consumer Federation of America noticed was that like a little league baseball team, everybody is a winner. Almost everyone gets an A, and that's a little suspect as well, because it's hard to believe that every plumber out there is that good.
Sandy Block: Seeing that it doesn't say that you should abandon Angie's List. It says that it's still useful. You just have to do some work. First of all, ignore the top-rated pros. Go straight to reviews and look for companies that have a lot of reviews and look for negative reviews. Angie's List isn't necessarily going to highlight negative reviews but you should be able to find them. If an A-rated company only has one review, you've got to really wonder why it's got an A. You have to do a little more work if you're going to use the service.
Sandy Block: The other thing you should do is compare it to some other things that are out there. Certainly, anyone you hire you should check with the Better Business Bureau. That's free and they are not supported by advertisers, so you can certainly vet someone there. The other thing we suggest checking out is Consumer Checkbook, and we'll put the link to that in the show notes. It's not available everywhere, but it's available in several major cities. It is not supported by advertising. I've looked at it. It is exhaustive.
Sandy Block: You do have to pay for it, but maybe you get what you pay for. My experience with it has been very good. As I said, it does have evaluations of service providers of all kinds, and it's based on consumer surveys, nothing else.
Ryan Ermey: Failing that, you can do the old-school Jersey method of asking your cousin Sal who did his plumbing or who did his electrical work. Asking for referrals is still totally a legitimate way of finding good contractors.
Sandy Block: Right, and any contractor you hire should be willing to give you referrals. I know we've used a plumber for years that we got from Consumer's Checkbook. For this area, he's a little crazy, but he's quite reasonable and does great work. My own experience with him has been very good. Other contractors that we've hired have been people who've worked for our friends. If they've done a good job for your friends, they're probably going to do a good job for you.
Ryan Ermey: That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at email@example.com. If you like the show, please remember to rate, review, and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.