We’re only months away from the wedding season and couples around the country are already caught up in euphoric plans for the big event. There are rings and dresses being ordered, tuxedos being rented and flowers and cakes being designed. All the wonderful details that set the foundation for a lovely future … including debt, if you’re not careful.
While not the most romantic topic, how to pay for a wedding should be an important part of a couple’s pre-nuptial discussion, according to financial planners consulted for this story.
Here are five ways they suggest to avoid saying “I do” to a lot of excessive bills.
1. Stick to a budget: “The most critical thing is to begin with a budget before you start to research the vendors you will use,” says Rett Dean, principal with Riverchase Financial Planning in Lewisville, Texas. “If you know what you can afford then the aspect of taking on debt can be better evaluated.”
First-time brides and grooms may not be able to differentiate between what they believe it costs to pay for a wedding and what it really costs, Dean says. “Their desire to have the vision of a one-day party outweighs what they have to spend. Prioritizing plays into how their life will be going forward. You do not want to overburden yourself financially.”
Especially if the new couple also has college loans, car payments and other expenses, he adds.
Financial conversations between bride and groom might include how to reduce other payments, whether to delay the event until they are in a better financial position, or reduce the scope of what they want in a wedding, Dean says.
Dallas Financial Planner Tara Scottino recommends monitoring spending on a month-to-month basis.
“Sometimes during the main planning/purchasing phase, you may need to monitor spending on a weekly basis,” the newlywed wrote in a blog post for the national Financial Planning Association. “Develop a system using a spreadsheet or budgeting software package.”
2. Decide who foots the bill: “Culture and tradition still are a major part of what determines who is responsible for wedding expenses,” Dean says.
“With the rising costs of weddings, it is not uncommon to see both families taking on an equal share of the expense. There has also been a shift in the average age of couples getting married and this has also made the idea of sharing costs more common.”
Most couples these days have been out of college and working a few years, accumulating enough to afford a wedding, says Amy Jo Lauber, a New York financial planner. Having the bride’s parents shell out the entire amount isn’t the norm anymore, she adds.
“Whoever writes the checks, calls the shots,” she says. For that reason, couples tend to pay for everything themselves to carry out their vision with full control, says Lauber, who is also past president of the FPA of Western New York.
Dean consults with parents who set aside for the wedding as part of their larger financial plans, say when their children are young teenagers. But it’s usually not as high a priority as providing for a college education, he says.
3. Establish a separate wedding account: “If you begin to blend it into monthly expenses, then it starts to hide the true total cost of the event.”
The account should be accessible, Dean says. “In the industry, we call it liquidity.” He suggests writing a check or using a debit card from a banking or credit union account designated for the event. But he warns against drawing from a certificate of deposit (CD) that would “encumber the dollars you use for the event.”
4. Pay with cash: Using a credit card as a “wedding account’ could set a couple up for stress early in the marriage, he cautions.
The challenge is being able to monitor how the money is spent. Delaying the payment takes it off the radar screen for a while and “diminishes and dilutes the impact of the event.”
If using the credit card comes with certain perks such as frequent flyer miles toward the honeymoon, for instance, the couple should immediately write a check for the same amount to pay off the charge, he advises. “It’s still directly in your sight so you see what your costs are and you stay on track with your budget.”
5. Consider ways to save. American weddings are estimated to average about $27,000, according to Wedding Stats and other sources. Still, The Wedding Report emphasizes that that nearly half of all U.S. weddings are between $10,000 and $30,000, with the largest portion of those in the lower range.
“There are lots of ways to save money, if you make it a priority and are willing to get a little creative,” Lauber says. “I once heard of a couple who paid for their wedding by returning bottles and cans. My niece and her husband had a wonderful wedding on a very limited budget. In fact, we picked wildflowers from the side of the road and they were gorgeous…and free.”
On the other hand, Lauber had calla lilies shipped in from Hawaii for her wedding many years ago. “It was worth it to me and I cut corners in other areas.”
Some couples she knows were able to knock down the reception costs, which Wedding Stats lists as eating up half the wedding budget.
A niece had a taco bar instead of the traditional fare, Lauber says. “They are both students and had student loans and they didn’t want to go into debt.”
She also recommends having a wedding at non-traditional times, such as Friday night. “It condenses the day down, but you end up with tremendous savings.”
Another option is to capitalize on the talents of family members. “I had a sister that makes wedding cakes. My mom made all the bridesmaids’ gowns.” Lauber has found that many relatives would rather provide their services than write a check.
Know of other tips for how to pay for a wedding? Leave us a note in the comments below.