The Best Way to Budget for a Big Event

We often forget to plan for weddings, engagements, bar mitzvahs and the like, all of which can cost a pretty penny. Here’s how to make sure you’re saving for those big days.


The Shaffers are the kind of parents who put their kids first. “We prioritized RESP contributions before RRSP savings since our two sons would be in university before we retired,” says Jennifer Shaffer, a 48-year-old Toronto-based healthcare professional. “But we didn’t think about how their bar mitzvahs would happen before either of those things.”

If you’ve never planned a graduation party or 25th wedding anniversary celebration before, chances are you haven’t the foggiest idea what’s involved or the ballpark costs.

It was only when their eldest son’s 13th birthday was on the horizon that they realized they needed a few thousand dollars to pay for dinner, a DJ and new suits and dresses for the family. They’d have to do it all over again three years later when their youngest son came of age.

The Shaffers are not unusual – even the most financially savvy savers forget to take into account big life events such as sweet sixteens, engagements, retirements or graduations. You may not even know that a pricey destination wedding is coming or that your 90-year-old dad will want a big blowout for his birthday.

Todd Sigurdson, director, tax and estate planning at IG Wealth Management, acknowledges that planning ahead for family events can be difficult. “In an ideal situation, parents would save up in advance. But that doesn’t necessarily happen all the time,” he says.

Here’s how you can pay for your family’s milestone event, whether you’ve planned for it or not.

Start saving ASAP

It doesn’t matter if your celebration is around the corner or years away, the best time to start putting money aside is now. “The sooner you start saving and the longer your time horizon, the easier it will be to finance that event,” says Sigurdson, who suggests putting those savings into a tax-free savings account (TFSA). “The income you earn in a TFSA is not taxable, so you can withdraw money at any time without penalty and you get back your contribution room the following year.”

Do your research

If you’ve never planned a graduation party or 25th wedding anniversary celebration before, chances are you haven’t the foggiest idea what’s involved or the ballpark costs. “We definitely had the spreadsheets going, looking at what the services were and pricing things out,” says Shaffer’s husband Gabe, 46, a supply chain and distribution manager, regarding their first son’s bar mitzvah. “Everyone wants the best for their child, but you also have to be able to pay for it.”

Create a budget

A budget is important to not only ensure you don’t spend beyond your means, but also to help you decide where you can indulge and where you should cut back.

“Pick where you want to spend your money,” says Gabe. “We didn’t really care about flowers, and we were OK printing photos ourselves rather than buying them from the photographer. But we chose to spend a lot on the DJ since that’s the lifeline of the party.”

If you’re getting any financial help from grandparents or other family members, be sure to factor that into your budget as well, says Sigurdson.

Arrange financing early

If you realize you need to borrow, don’t wait to arrange financing. “The sooner you talk to the bank, the better,” says Sigurdson, who warns against racking up charges on your credit card. “A home equity line of credit is a better strategy since you’ll get a lower interest rate.”

That was the Shaffers’ approach; they already had a home equity line of credit (HELOC) combined with their mortgage, so they tapped into it when some of the pricier event bills came due. While HELOC repayment isn’t on a predetermined schedule – you can pay it off as slowly or quickly as you want – they set up monthly payments to avoid excessive interest charges.

Don’t get carried away

There will be no shortage of vendors vying for your dollars, so resist the urge to splurge.

For example, someone suggested the Shaffers hire the Toronto Maple Leafs’ announcer to introduce their son at his bar mitzvah party, for about $750. “I guess people think, I’m already spending so much, what’s another $1,000?” says Gabe. “But you have to be able to sleep at night.”

If you do plan properly and find that you have a little extra room in the budget, then maybe you will be able to do something a little extra. “People can lose sight of what their budget is,” says Sigurdson. “But if you’ve been planning and saving, maybe you can afford to spice it up.”

Have Questions

Our advisors will consider your financial goals and help find the path to get you there.

Find an Advisor