Weddings are a great opportunity for friends and family to get together. Many people dream about them for years and they are a turning point in our lives. Unfortunately, they’re also incredibly expensive.
It doesn’t make sense for any couple who isn’t financially stable (minimal consumer debt, car paid off, owns a home, solid income, etc.) to overspend on a wedding. Let me tell you why.
We know the basics of money, so we can guess what’s silly and what’s smart. If something is practical and makes sense, it’s probably smart. If you’re embarrassed to admit something, you do it to impress others or you can’t really justify the cost…it’s probably silly.
When we make silly financial decisions, we’re likely making emotional decisions and not being honest with ourselves. We know it doesn’t make sense, but we do it anyway. Does that sound like success to you? It sounds like ramen noodles and an empty bank account to me.
The point isn’t to downplay a wedding’s importance. I understand that the memories last forever, but so does debt…or at least that’s what it feels like. Debt doesn’t just go away as soon as the wedding is over. You have to pay it all back and more in interest.
You don’t have to spend thousands of dollars to make the day important or create incredible memories. When you get married, overspending on a wedding is not the responsible thing to do for the future of your new family.
…Which leads us to our next point: Financial issues are one of the leading causes of divorce. Why would you add more stress to your marriage by having an expensive wedding? By putting wedding money instead towards a new home, paying down debt or something similar you can double your money. Here’s an example:
Decision: Spend $20,000 on a wedding.
Outcome: $20,000 in debt plus whatever ridiculous interest rate you pay. Let’s be conservative and say the debt + interest totals $25,000.
Decision: Spend $20,000 on something smart and productive.
Outcome: Pay down debt (credit cards, student loans, auto loans, etc.) by $20,000 or put it towards a new house (i.e. knock $20,000 off your mortgage). We’ll assume you save around $5,000 in interest for paying your debt off early. This adds up to $20,000 + $5,000 = $25,000 in progress.
What I’m trying to say is…
A $20,000 wedding costs $50,000 in progress. That’s right, your wedding will cost 250% of its price in lost opportunity. That’s the worst way to start your marriage.
We weren’t mathematically precise in these examples, but you get the idea. The better financial decision is obvious: use thousands of dollars to pay down debt, towards a house or for education…not on a wedding.
As we already mentioned, financial issues are one of the leading causes of divorce. The divorce rate is around 50%. Why increase those chances by overspending on a wedding when you could strengthen your marriage and set yourself up for financial success? Marriage is more than just the wedding day.
Together you can decide if that one day will be a big step forward or backward for your family’s financial independence. Which will it be?
There’s a sensible middle ground, so just think about it before diving in. By compromising you will not only give your family a head start but you will also increase the chances for your marriage to succeed. Of course, if you’re wealthy and money isn’t a concern then you just wasted the last five minutes of your life when you could have been yachting.
In another article we’ll talk in more detail about alternatives to an expensive wedding.