How Can I Better Invest This Money My Boyfriend and I Plan to Use for Our Wedding?

My mom has $4,000 she has set aside to give to me for a wedding. Right now it’s sitting in a savings account or CD of some kind, but it’s not really earning much interest. She says I’m welcome to manage it if I’d like, in hopes of it “doing more.” So my question is: what should I do with it?

My boyfriend and I don’t make much money, but we’ve managed to build a healthy cushion, don’t have credit card debt and have reasonable plans for our student debt. So this really is just “fun money” that we can use for a wedding in the next year or two. I’d like to do something with it that would earn a good return in a shorter time frame, and might be something I could add my own money to if I have extra at the end of the month to throw at it.

Thanks! — Newbie Investor

“I’d like to do something with it that would earn a good return in a shorter time frame.”

Ah, Newbie Investor, that is a wish we all have! If only we could all make a good return on our investments in a short amount of time! People who want high returns on their money in a short period of time usually head to Vegas. The problem is that only few people win that way.

The thing about investing is that it is a long game. In general: You invest your money, say by putting it in a retirement account, or a brokerage account, and then you leave it there for many years — decades — ignoring the rise and falls of the stock market. You take on risk when you are young (by investing in volatile stocks), and then shed that risk as you get older (by gradually moving that money into conservative bonds). After a few decades, if you haven’t touched that money, you should come out ahead.

Whenever anyone asks me how to invest money I tell them: Go with low-fee index funds. Former bankers say nothing beats a low-fee index fund. Warren Buffet also says it is all about low-fee index funds.

So what should you do with that wedding money in the next year or two? Keep it in a CD or an interest-earning savings account (I don’t say high-yield anymore because that is not really a thing at this point in time) — check Bankrate to see what might be best for you. Set a savings goal for your wedding and continue to save. Keep the costs of your wedding to what you can reasonably pay based on your goals and savings. And then, once you get married and have money leftover (or maybe wedding gift cash), you can put the money into an investment account and think about the long-term.

Congrats, and all the best on both of your futures!

To those of you who have gotten married: How did you save for your wedding? Any advice for the Newbie Investor?