My niche is younger clients, who can include those folks juggling a lot of other financial challenges on top of getting married. That special ceremony should be one of the most important days of your life but can quickly become one of the most expensive. There’s also not much of a template to start with the spectrum running from a short and simple exchange of vows at the courthouse (or drive-through chapel) to the social event of the year with horse-drawn carriages and free purebred puppies for your guests. I’m sure you’ve seen a few episodes on HGTV that made you cringe (from either end of the spectrum) so how do you and your beloved figure out what’s right for you?
Here are a few thoughts I’d like to share when you are considering self-funding, relying on mom and pop, or taking out a loan for your wedding:
- You are already combining the financial stories of two people. Each may have different attitudes towards debt and spending. Planning for a wedding is a great icebreaker to discover how you will approach other financial challenges and goals, so make sure each partner is an active participant in expressing what their must-haves, like-to-haves, and bargaining chips are for the special day. This is a great exercise to discuss compromise and sacrifice. Make sure you identify your deal-breakers and be careful to keep it a judgment-free discussion.
- You should get all your finances on the table before committing to big spending on the main event. If your current income and savings are necessitating a loan to make your dreams a reality, you should be clear-eyed about the trade-offs you’ll have to make in other areas to pay off the loan, long after the vows and toasts are over. I’m sure your guests will appreciate the extra extravagances for a moment, but will you feel it added significant value to your experiences when you cut a check to make the loan payments each month? Will settling this debt take away from the more meaningful goals you share?
- If mom and dad (or your Bitcoin billionaire sister) have deep pockets and good intentions, is a one-day extravagance the highest and best use of their generosity? Maybe a more modest approach is prudent – and park the savings in 529s for the grandkids! You should also be prepared if your backers feel they’ve bought the right to make some of the decisions and insert their input into your wedding plans. After all, they may still feel as if it’s “their” money even if it’s “your” wedding.
- An alternative to debt that my wife and I made was as follows:
A. How much of our savings can we commit to our wedding from the onset of planning?
B. How much could we each realistically contribute monthly between “Yes” and “I do”.
C. Use those sums as the end cost and budget backward from there.
Having those kinds of constraints can help inform discussions such as “I think we should rent swans for the fountain” against “I want an open bar with premium alcohol” and even a guest draft where you must “vote some guests off the island” based on the per head costs (or capacity of the venue).
- If anything, coming out of the wedding debt-free will give you tremendous peace of mind. Maybe reserve the honeymoon on your credit card with the best rewards? Many times, you’ll already have the blenders and utensils and bath towels pre-matrimony, so expect a lot of cash gifts from your guests and use that to pay off the credit card when you return from the Maldives.
- The most important part of the day is your commitment to each other and the love you share, don’t get too caught up in overspending to meet others’ expectations. Weigh the utility of a loan or additional credit card debt for a single day out of what you hope to be a lifetime together! Your guests will enjoy the experience, but they will remember an authentic exchange of vows and hope for happiness sealed with a kiss long after they depart the venue.
What do you think? I hope this helps! Maybe not the most romantic of approaches but stressing over wedding bills on your honeymoon when you should be sipping Pina Coladas at sunset in the infinity pool is no fun either! Do you think a neutral third party can help shape your wedding spending plan? Schedule an appointment – We Can Plan For That!