April 27, 2017
Look, I love a good party as much as anyone else, especially when there is a great celebration, such as a wedding. But if you’re attending a few weddings a year—and god forbid if one or more is a destination wedding—then I am also worried you may be celebrating your way into a costly situation.
According to a survey last year from American Express, guests attending weddings spent more than $700 on average to attend each wedding. That includes the cost of an outfit, all the trimmings, a gift, and any travel. Millennials spent nearly $900, on average, per wedding.
That’s the one that troubles me the most. Because I bet plenty of millennials are the same people who are trying to juggle the rent and stay current on their student loans. And I know plenty of millennials are still working to get their emergency fund going, let alone have at least eight months of living costs saved up. So to spend $2,700 a year, on average to attend a few weddings (the same survey said the average was three a year), while you have yet to polish off some other important financial goals is a bit much.
And if your wedding expenses are being put on a credit card that you can’t pay off in full, then my goodness, the cost keeps climbing.
Look, I am not going to be the one to tell you not to attend a wedding. Especially if it is someone very near and dear to you. But you need to be smart about this. You may want a new outfit for each event, but you sure don’t need one. You may want to give the couple an expensive gift, but you don’t need to. A heartfelt gift—yes, homemade!—is going to be even more special.
The point is, I want you to put yourself on the tightest of wedding budgets. And if you absolutely positively must attend a destination wedding, your goal is to cut back your regular spending the second you get the “save the date” notice. I want you to be able to save enough money by cutting back so you can pay for the entire cost of the wedding trip ASAP. Hopefully before the date arrives. I get that you might need to book the flight now, and it might go on a credit card you can’t pay off in full this month. But you can surely get it paid off in two, three, or four months if you make it a priority. That’s a plan you should be wedded to, so you don’t let all the celebrating make a mess of your financial life.
Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.