3 Reasons You Should NOT Go Into Debt for Your Wedding
When you first start planning a wedding, you don’t always realize, or understand, all the costs that can be associated with such a large event. There’s the dress, the venue, the food, music and entertainment, a fancy cake, and the list goes on. In addition to these fees, there’s taxes, gratuities, postage, and other ad hoc costs that come up along the way. Many embark on the planning process with a set budget in mind, but it’s so easy to give into elements outside the pre-set budget-buckets once you’ve fallen in love with it. It’s a once-in-a-lifetime event right? Well, that’s true...but I’m here to burst your fairytale wedding bubble (just a bit) and let y’all know that there are major pros to limiting your wedding expenditures.
Start Your Life as a Couple off “In the Black”
In the Black: An individual is said to be "in the black" if they are profitable or, more specifically, if the individual produces positive earnings after accounting for all expenses (source: investopedia.com)
I’m throwing a financial term at you here, but how awesome would it be to start your life as a married couple off “in the black” and not tied down by pending wedding bills? No bills = No stress. No stress = Happy Couple. You can focus on your new life as a single unit instead of stressing about paying off all the pending wedding-related bills. Friends and relatives will often present monetary-based wedding gifts and all of these can be put into a savings account or you can use these funds for a honeymoon, furnishing your home, fun post-wedding dates, etc. When planning your wedding, keep in mind that this is an event that lasts for a couple of hours on ONE day. It goes by extremely quickly, and often times those small details which would look awesome in a Pinterest-esque design shot won’t even be noticed---by you or your guests. Focus your funds on the larger, more impactful elements (e.g. music and entertainment, food, alter decor).
It’s Time to Nest
Immediately after the wedding, couples often focus on building a home together and even starting a family. Kids are expensive y’all, so the more dollar bills you have to put towards college funds, baby supplies, maternity expenses, and pre-school/daycare the better. Just to put things in perspective, and taking into account us living in the DC-Metro area and paying for public college, this handy-dandy calculator estimates that it would cost around $500K for us to raise a child from birth to the age of 18 (https://www.babycenter.com/cost-of-raising-child-calculator). Crazy right? But hey, that’s reality and you need to know so you can plan ahead. It’s your responsibility to ensure your child has the quality of life it deserves, so say no to those $7/unit Chiavarris and hello to those perfectly fine $3/unit padded event chairs.
Loans Are No Fun
For those that have student loans (I’m still paying mine off), you know that seeing that large payback number is never a day-brightener. Could you imagine having another 5-figure amount to payback on top of that? Just like student loans, credit card payments and other small loans accrue interest. You’ll end up paying even more than the original cost and it could take months (or years) to pay this back. If you’re planning to enter the real estate market soon and purchase your first place as a couple, financial institutions are going to look into your Debt-to-Income ratio.
Debt-to-Income Ratio: Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the payments you make every month to repay the money you have borrowed. (source: www.consumerfinance.gov)
A bit of leniency (an extremely slight amount) is given when it comes to student loans, but additional loans (like personal loans for a wedding and high credit debt), can really hurt your chances of getting a home loan. Before committing to that $800 four-tier designer cake, ask yourself if it’s really that important. If you know you just want a beautiful cake for the cake-cutting ceremony, commit to a $50 single-tier masterpiece that will sit on a beautiful vintage cake stand you found for a great deal at TJ Maxx. Purchase a sheet cake that will stay behind the scenes until the caterer presents pre-cut slices on the guest tables.
$800 vs $300
NO COMPARISON, RIGHT?
Most importantly, remember it’s your big day but it’s only ONE day. You have a lifetime of amazing, beautiful days with your partner so plan ahead and make them count.
Feeling a little stressed or overwhelmed? It’s ok! We’ve got you covered babe. We want to make sure you start off on the right foot so click here to learn how to DOMINATE your wedding budget (HINT: There’s a pretty sweet wedding budget template waiting for you when you get there).