|Your wedding -- fall more deeply
in love, not debt
It will be a day you won't forget
-- especially if you're still paying for it five years later.
Next to buying a house and raising a family, a wedding
is one of the priciest milestones in a couple's life. The average
cost of tying the knot is $27,852, according to a 2006 survey conducted
for The Conde Nast Bridal Group.
Because couples are making more money and marrying
later, the tradition of parents picking up the entire tab is dying.
With the average couple raking in $74,000 annually and nearing 30
years of age, the survey also states that 32 percent of them will
cover their own wedding expenses.
If someone else is paying for your nuptials, congratulations,
what a wedding gift! But for those of you who'll foot the bill yourselves,
there are ways to make sure drastic debt doesn't go on honeymoon
And the single biggest key to containing those expenses
is, surprisingly, not accounting advice. It is this: Talk to each
other, honestly, openly, candidly, about the money that your wedding
The basic fiscal rule of thumb involved is this: Don't
spend more on nuptials and a honeymoon that you can repay in 24
months, three years tops.
Think houses and babies
"You don't want it to overlap with the cost of children and
buying a house," says Sharon
Rich, a Massachusetts financial planner. "You will have other
goals you want to achieve."
Say you spend the average $27,852 for your wedding.
To pay it off in one year at 12 percent interest would cost $2475
a month; to pay it over two years would cost $1311 a month. Stretch
it over three years and the payment is $925.
That's too much debt for anybody, much less young
couples who are starting a life together. So before the first penny
is spent, couples need to have an open, honest discussion about
money, with each partner disclosing what they make, what they owe
and how they spend discretionary funds.
"How much you borrow," says Rich, "depends
on your spending habits and what you can afford to pay off each
month. Plan to pay off your wedding in a year or two." Take
the time to calculate
how much you can realistically afford, or meet with a financial
planner if you're unable to determine this amount on your own, recommends
"You're going to be talking about finances for the
rest of your lives, so you might as well start here," says New York
financial adviser Nancy Dunnan. "You can learn a lot about each
other and shake out extreme differences by having a little business
Presuming you haven't called off the engagement after
that, determine how much the two of you can afford to get hitched,
take a hayride and how you will pay for it. "You want forward planning,
not reactive payment," says Rich. "To have a plan to pay this off
is going to be crucial."