How to Budget for a Wedding
May 05, 2016
I am frequently asked how much is okay to spend on a wedding.
That’s the wrong question. What any couple, and their families should be asking is: Can we afford to spend money on a wedding?
And that comes down to some straightforward questions for anyone who is contemplating contributing to paying for a wedding:
• Do you pay all your credit cards in full, each month?
• Do you have an eight-month emergency savings fund?
• Are you on pace to pay back your student loans within 10 years? (Or are you on pace with payments to qualify you for public service loan forgiveness?)
• Are you contributing at least 10% of your salary to retirement savings?
• Can you afford to pay for the wedding and stay on track with all your other savings goals and debt-repayment?
If you answered no to any of those questions, you need to stand in your truth: You have no business spending money on a wedding.
And for those of you asking your parents to help, it is on your conscience to only accept their assistance if you know for a fact, that your parents are on pace with all their financial goals. It is not acceptable to just take them at their word that “they’ve got it.” Or that it is their “dream” to throw a big wedding. Or that “you shouldn’t worry about it.”
No. No. No. An expensive wedding is a want, not a need. And to spend money that you don’t have is just wrong. For young couples I want you to step back and think about what couples argue about most: Money. And you better believe money issues are often at the heart of divorces. So why would you want to start your life together spending money you don’t have, and thus short-changing your financial future?
And I know that there is no daughter (or son) who would ever knowingly let her (or his) parents shortchange their retirement security, or go into credit card debt, to pay for a wedding. The bottom line is that you need to step up and be an adult: do not accept any assistance from your family if you have any inkling it will hurt their security.
You can still have a fabulous wedding, full of love and meaning. Last I checked neither of those could be bought. They come from the heart. Whether it is a small wedding in your backyard, or living room, or renting a more simple space (that is not a budget buster), you and I both know there are so many ways you can create a memorable day for all, without having to spend money you don’t have.
And just think how fabulous you will feel to start your married life with no wedding-bill stress.
Suze's Financial Strength Test
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.
I have checked all the beneficiaries of every investment account and insurance policy within the past year.
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.
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