10 May Why Splurging on Your Wedding is a Stupid Mistake
One of my coworkers has been updating me with weekly progress about planning her son’s wedding. Her son is a local police officer in his early 30s and he’s marrying a sweet magazine editor of the same age. For all intent and purposes, they are an average income couple who come from average income parents.
And yet, they’re spending more than $150,000 on their wedding this June.
My coworker and her husband are chipping in towards the costs of the pre-wedding activities, including the rehearsal dinner. They expect to spend somewhere just north of $50,000. Meanwhile, the bride and her family are covering the costs of the actual wedding ceremony, and any post-wedding activities the following day. All told, the bride’s family had budgeted more than $100,000 for their expenses.
Weddings are a huge waste of money.
It would be one thing if the couple (and their respective families) could afford to drop more than $150,000 for a weekend-long party. But like many Millennial-aged couples, they can’t.
Not only can they not afford the price tag of their wedding, but they have to make dramatic cutbacks in other areas of their life to pull it off. Just last week, my coworker was telling me how her son and future daughter-in-law are planning to rent their condo effective May 1. They’re moving back in with my coworker and her husband for at least a few months, and then they’ll use the rental income from their condo to put towards their needlessly expensive wedding.
Would you move back in with your parents to afford your wedding?
I’m sure the wedding’s cigar bar will be really cool, but is it really worth the cost?
Weddings are a huge waste of money. I’m not saying this as a still yet-to-be-married Millennial. This isn’t coming from someone who’s bitter. I, too, have dreamed of my wedding day since I was a little girl. But am I going to pile up credit card debt for a few extra fancy pictures, chocolate dipped macarons and limitless Veuve Clicquot? No way.
The average cost of a wedding in 2016 was $35,000!
I’m not alone. Other Millennials should think twice about splurging on their wedding, too.
According to a survey by The Knot, the average cost of a wedding in the U.S. shot up to $35,329 in 2016. Sure, that’s a lot less than my coworker’s son plans to spend – but it’s still a ton of money. What’s even more surprising is that costs continue to climb even though the average wedding size is on the decline. The average wedding has dropped from 149 people in 2009 to 141 people last year.
The average cost of a wedding venue is $16,107 nationwide!
What gives? Well, it seems as though people are shelling out big dough for their wedding venue. The average wedding venue costs $16,107 nationwide. Then people are getting extra creative with add-on amenities such as photo booths, food trucks and lawn games. These costs add up fast. The average cost per guest now stands somewhere around $245.
And remember, these are national averages. People who live in New York, San Francisco, Los Angeles and other major metro areas can expect the costs to be even higher.
The average cost of a wedding could pay rent for an entire year!
So unless you’re willing to trek out to Idaho for your wedding, think twice before splurging on your wedding day.
Just think of how that money can be spent otherwise. Let’s use $35,000 to keep things simple.
What does $35,000 buy you? Well, it could buy at least one of you a really nice new car. It might even be enough to buy both of you a new car. For some people, $35,000 is enough to pay rent for an entire year. It’s certainly a huge chunk towards a down payment on a house. And for the average American, it’s enough to sustain one person through six months’ of unexpected unemployment.
I know. You have a car already. You’re making enough to afford your rent. You’ll start saving for a down payment after you pay off your wedding expenses. And your job is as safe as can be.
A cheaper wedding is just as much fun but leaves you with savings!
That’s what all people think. At least, it’s what Amy thought. Amy dropped $20,000 on her first wedding. Whoops. Things didn’t work out. And now she’s onto round 2. Her second wedding only cost $6,000. Seems like she learned her lesson the second time around. “It was just as fun,” she says. “And we had the rest of our savings for the three months of unpaid leave I ended up having to take a few months later to care for our premature baby.”
Amy never expected to have a premature baby. But things come up. And it’s really good to have that savings to rely on. It’s a cushion that too many Millennials go without—often, needlessly so.
This isn’t to say you shouldn’t have a wedding at all. I’m not a monster. But ask around and most people will tell you (after the fact) that there are areas they could have scaled back. They probably didn’t need to spend so much money on flowers; their $1,000+ wedding dress is still collecting dust in their closet; and most of their guests wouldn’t have known the difference between Veuve and Moet & Chandon. Their cake probably didn’t need to be six tiers. And they definitely didn’t need to invite Sally and Tom from three doors down who they haven’t spoken to since.
Saving $15,000 on your wedding could save you $1,653 in credit card interest!
Let’s think about scaling back your wedding from $35,000 to $20,000. That puts $15,000 back into your pocket. What can you do with $15,000?
You could start chipping away at credit card debt. Nearly 40 percent of Americans carry a credit card balance at any given point in time, with an average interest rate of more than 13 percent per year. Instead of wasting money on an overpriced wedding, you could take that $15,000 and put $1,250 towards your monthly credit card. According to this handy calculator, doing so would save the average American a whopping $1,653 in interest payments over the course of a year.
Saving $15,000 on your wedding could earn you $1,197 in a year if you invest it!
Or you could invest it in the stock market. The stock market has been doing well as of late. Putting $15,000 into a basic index fund that tracks the S&P 500 could grow your investment portfolio by another $1,197 over the next year.
Looking for a more conservative approach to investing? That $15,000 would help at least one of you come close to maxing out your 401k this year. If your employer makes matching contributions, this could result in thousands of dollars more in your retirement account this year.
The average cost of a wedding is nearly the cost of a down-payment on a house!
If you don’t have credit card bills (congrats!) and don’t feel comfortable investing in the stock market, consider saving that $15,000 for a down payment on a house. The average home value nationwide is $196,500 according to real estate website Zillow. A 20 percent down payment is considered the golden standard. On the average home price, this means you’ll need $39,300 for a down payment (plus closing costs and other fees, which can tack on another $10,000).
Combining the down payment and closing costs will set you back nearly $50,000 if you put 20 percent down – that’s more than one of these pricy weddings we’ve warned you against! Yet buying a home is much different than splurging on a killer one-day party. You’ll have your home for years to come.
There are a lot of mortgage programs that allow homebuyers to put down even less than 20 percent. For instance, the FHA-loan program allows people to put down as little as 3.5 percent when buying their primary residence. Using the $196,500 home as an example, this means you’d only need to come up with $6,878 for a down payment. Tack on closing costs and you’re looking at just under $17,000. Suddenly, saving that $15,000 on your wedding seems a lot more appealing, no? Buying a home with your spouse seems like a great way to start off a marriage. I’d much prefer that to swimming in credit card debt.
Are you trying to keep up with the Joneses with your wedding?
Too many Millennials try to keep up with the Joneses. Instagram and Pinterest certainly haven’t helped. We’re inundated with pictures of other people’s glamorous weddings. It’s easy to want the same for yourself. But what you don’t see is what’s hiding behind those pictures. Behind the glitz and glamour, there is often a couple lying awake at night wondering how they’ll afford to fix their car, or whether they’re going to fall behind on their student loan payments. Nobody talks about these things, but it’s a reality. Living beyond your means will eventually catch up to you.
And if for no other reason, that’s why you should think twice before splurging on your wedding.