There are plenty of reasons why couples might seriously consider the idea of not having a rehearsal dinner the night before their nuptials, budgetary and otherwise. In actuality, this pre-wedding affair is about so much more than honoring tradition and having an opportunity to practice the ceremony entrances—it's usually the first time that all of your VIP wedding guests from both sides will be together, and it's often the only opportunity some of your nearest and dearest will have to meet before the big day.
You shouldn't underestimate the importance of that point. While you and your fiancé personally know everyone who has RSVP'd to attend—including close friends and family who will play a key role in your ceremony—no doubt there are plenty of introductions still to be made between parents, siblings, and both sides of the bridal party, just to name a few. Having a rehearsal dinner gives your VIP guests the chance to get to know each other a bit more before the wedding; it helps to break the ice and takes a ton of pressure off of intros on your big day. They're going to be part of one big happy family after tomorrow!
Plus, a rehearsal dinner gives you the chance to catch up with guests who have traveled the furthest to attend, loved ones whom you probably don't get to see very often. It's easier to get this time in now, as your wedding day will be a whirlwind of greetings and hugs and conversations that will go all too fast. Of course, the rehearsal dinner follows an important event: the wedding rehearsal. Sure, you can practice entrances and exits without having a dinner to follow, but it's a nice way to thank your attendants for all of their help.
At the end of the day though, the decision to have a rehearsal dinner is entirely up to the two of you. If a traditional rehearsal dinner doesn't make sense, why not consider some of the alternatives? Hosting a more casual pre-wedding celebration doesn't mean it will be any less memorable! Consider a backyard BBQ, cocktails and appetizers at your favorite restaurant, or a dessert party back at the hotel.