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The groom's parents' budget (or whoever is hosting the rehearsal diner)will dictate how many people can attend the rehearsal dinner. Just like the bride's parents' budget determined how many people could attend the wedding.
People who should be included on the rehearsal dinner guest list are:
The bride and groom
All of their parents and step-parents
Their siblings and their spouses
All of the bridal party attendants (and their spouses if it is in the budget)
People who can be included if the budget extends further:
Any out of town family members or close friends and their guests
Rehearsal dinners are held on the day or night of the wedding rehearsal. Traditionally the wedding rehearsal is held the night before the wedding but in some circumstances it is not.
Rehearsal dinners can be held on the same day as the rehearsal, before or after the reception. Rehearsals can be held the night before the wedding or a few days before the wedding depending on the officiant and church schedules and when your attendants are available.
Rehearsal dinner invitations can be sent 4-6 weeks before the rehearsal. You will want to send them out closely with the wedding invitations in case the guests need to reserve an extra night at their hotel to attend the rehearsal also.
Rehearsal dinners are traditionally hosted by the groom's parents. If the groom and his parents are from out of town the bride's parents may want to help the groom's parents in selecting an appropriate location for the party. If there is a budget concern the bride's parents may want to open up their home to a small rehearsal dinner cookout for just the attendants, parents and bride and groom - with the groom's parents' permission.
The rehearsal dinner is just one last close celebration for the bride and groom and their attendants before the big day. It can be casual or formal but it should suit the bride and groom so they have a good time.
Traditionally the groom's parents host the rehearal dinner. However, the bride and groom, the bride's parents, members of the church, other family or friends can host if the groom's parents cannot because of financial concerns, they are from another state or country, or there are family reasons they may not want to or be able to host.