Once upon a time, the bride’s family paid for the vast majority of all wedding expenses. Fast forward to today, where an increasing number of couples are paying for their wedding costs themselves. My husband and I were one such couple, and I am proud to say we hosted a beautiful celebration without going into debt for one red cent. We were able to do that by planning a long engagement where we could save money, purchasing wedding items over time as they came on sale, and simply cutting out what we just couldn’t afford. While I will always encourage this path for planning and paying for any wedding, “wedding loans” are growing in popularity as a way for couples who can’t afford to pay cash to have the wedding of their dreams. Let’s discuss these loans in detail to avoid starting your marriage off on the wrong financial foot, should you choose to finance your big day.
Not Everyone Needs A “Platinum Wedding”
The first step in considering whether a wedding loan is right for you, is to list out exactly what you will need to spend for your celebration. Spend a quality length of time listing out ALL expenses in three different groups: Essential, Non-Essential but Nice, and Unnecessary Extras. Once you have listed out every single thing you will need for your wedding, if it’s over budget, you know to start slashing from the “Unnecessary” list first (…seriously, does anyone really NEED a monogrammed logo on the dance floor?)
Ask the “Why?”
After working out your budget, sit down and truly ask yourself why you feel a loan would be best for your wedding. Have you considered all other options? Is eloping out of the question? Some couples who didn’t have much cash have raved about their decision to have a small, private ceremony, followed by a casual party to celebrate with friends at a later date. Could the wedding date be pushed back in order to allow money to be saved? A trick in that situation could be to pretend you have a loan already, and pay yourself the monthly payment each month into a savings account. Before long, the account will have grown (and paid YOU interest instead of the other way around) and you would have plenty of money to pay for all your expenses. And finally, as touched on in the previous paragraph, have you cut out all expenses that you can? Remember, this day is about celebrating the love between you and your future spouse and the commitment you are about to make, not whether you serve beef tenderloin as your entrée or not.
Stay On The Same Page
When financing a wedding, it is of utmost importance to make sure you and your future spouse stay on the same page with the expenses. Whether one or both of you will be signing the contract, this debt will carry forward into the first tender years of your marriage. If one person is resentful of the amount of money spent on part or all of the wedding, this can be a real recipe for disaster. When deciding how much to finance, calculate how much you can realistically afford to pay each month, and shoot for a loan that you can pay off in three years or less at the most. The NUMBER ONE reason for divorce is arguments over money. Don’t set your marriage up for potential failure just to have a pricier and more lavish wedding and reception.
The Brighter Side
Now that I’ve gotten the “gloom and doom” warnings out of the way, wedding loans might not always be a terrible idea. If you’re planning a reasonable affair and are unable to wait to save enough cash for whatever reason, taking out a wedding loan can offer a better situation than charging up your credit cards. Wedding loans are usually much lower in interest rates than a card, but absolutely do NOT consider a loan over 15% (and even that is on the high side). Also, when applying for a loan, you have to work out a budget before-hand and stick to it once you’ve received the money. When using credit cards, it’s too easy to whip out the plastic each time you find something you just HAVE TO HAVE for the wedding, often leading to out-of-control spending. Obviously I will always tout paying with cash as the absolute best and only way to pay for a wedding, but as long as you do your homework and make smart financing decisions, a wedding loan could be a good way to pull off your dream day.
photo credit: Wedding Expenses Etiquette