The average cost of a wedding is now more than $30,000. As I have explained in How to Budget for a Wedding, spending even $3,000 on a wedding is a bad move if you have credit card debt, have yet to build a large emergency fund, or aren’t on pace with your retirement savings.
But for those of you who are thinking about spending for a blow-out wedding, I want you to seriously think through the long-term cost of your decision. Money you spend today you won’t have for tomorrow. Sounds obvious. But I don’t think you’ve carefully thought through what that really means. If you spend $30,000 on a wedding today that is $30,000 you don’t have to put toward other long-term goals.
Invest $30,000 for 18 years and earn a 5% annualized return and you could have nearly $75,000. Why 18 years? Well, I’m thinking maybe you and your honey are going to start a family. That $75,000 is going to go a long way to covering a chunk of college costs. (Even after accounting for inflation, annual tuition and fees at a public university for an in-state student might run about $20,000 a year in 18 years.)
Or let’s talk about retirement. Maybe you and your honey have spent your single years paying off student loans, or perhaps working off some expensive credit card debt from those days before you got financially on top of things. That’s okay. But please don’t spend big money on a wedding if you haven’t been paying attention to your retirement. The five-figure wedding cost of today is a potential way to turbo charge your retirement fund into six-figures. Investing the $30,000 for retirement and earning a 5% annualized return would leave you with about $165,000 in 35 years.
I can’t stress this enough: A big wedding is a want, not a need. And please don’t tell me you (or your daughter, or son) deserve a big wedding. Really? I think they deserve a financially secure future. I think they deserve knowing their parents are not short-changing their own future to pay for an expensive wedding.
You can still have a fantastic, wonderful, meaningful and joyous wedding. All that takes is creativity and focusing on what really matters. Spending money you don’t have for a party you can’t afford doesn’t sound like a joyous act to me.