The Case for Saying I Do on the Cheap(er)
Forgoing blow-out nuptials can set you up for all sorts of financial bliss
The wedding-industrial complex that feeds off of coverage of celebrity fairy-tale weddings – say, Meghan Markle and Prince Harry’s, or Idris Elba’s – glides past the fact that if you don’t have bucketloads in the bank, an expensive wedding can wreak financial havoc.
The average wedding cost is about $35,000, and a survey by Student Loan Hero found that three of four couples expected to take on debt to pay for their wedding.
If you put, let’s say, $20,000 of wedding costs on a credit card that charges 15% interest, you would run up $8,500 in interest charges if it took you five years to pay off the bills.
Then there’s the grind it puts on parents. A survey by Merrill Lynch and Age Wave found that two-thirds of parents of adult children know they are sacrificing their own financial security by helping pay for their children's wedding costs, yet 60% of parents said they expect to help pay the tab.
Beware: Parents who shell out – or borrow – for a child’s wedding often are doing so at the cost of not saving enough for retirement. Granted, your parents’ retirement security is likely not front-of-mind when you are newly engaged and into wedding planning. But fast-forward a bit and consider the notion that it could fall to you to help support your parents if their savings won’t cover retirement expenses.
Considering a destination wedding? That can throw a major wrench in attendees’ budgets. Friends don’t let friends (and family) go into debt or raid their savings to help celebrate.
The opportunity cost of expensive weddings
The Wedding Report collects survey data on average wedding costs in major metro areas. News flash: What gets spent on a wedding could be a down payment on a home.
In the Austin, Texas, metro area, the average wedding cost last year was nearly $28,000. The median list price of a house is around $540,000; $28,000 is more than enough to qualify for a low down payment loan. Lenders offer mortgages with down payments as low as 3%.
In Boston, the median list price is more than $900,000. That’s steep for first-timers (though starter homes are less). The average wedding cost in the metro area last year was nearly $37,000, halfway to the 10% down payment that is more commonly required for big-ticket mortgages.
Also, what you don’t spend on a wedding can help you shed student debt a lot faster. Returning to the earlier example of putting $20,000 of wedding costs on a credit card charging 15% interest, that works out to a monthly payment of about $475 if you push to get it paid off in five years. What if you instead avoided wedding debt and gave yourself $475 a month (or even just $175 more) extra to put toward paying off your student loan? You can calculate the enticing payoff from accelerating student loan repayment.
Celebrating just as hard but in a wallet-friendly way can be a liberating decision. Whether that’s choosing a backyard wedding, a trip to city hall or an affordable reception venue, what you don’t spend will have no impact on the big picture: Your friends and family are gathering to celebrate you. The trappings of a too-expensive wedding are not what matters. For you – or for them.