Wedding Money: Financing Your Festivities

The majority of couples nowadays pick up at least some portion of the tab.
No, ABBA probably weren't thinking wedding anthem when they wrote "Money, Money, Money" (were they thinking at all?), but, you know, they may as well have been. The truth is that getting engaged and having a wedding are very, very expensive events. Over 2.3 million happy couples tied the knot last year; their average bill -- including ring, dress, reception, limo and the whole shabang -- was upward of $17,000. Granted, that's a daunting sum when you're just getting started. But buckle up, grab your sweetie by the hand, and dosie doe -- or rather: Do as we say. Follow our simple financial plan and we guarantee that your wedding will not only be beautiful, but it won't max out every credit card you own, either.

Sit down with both of your families (or all four of your families -- ahhh, modern romance) and hammer out how much everyone can afford to contribute to your nuptials. (You may find it easier to talk to each family separately -- or each speak to your own families -- but the ideal way to do it is to have a grand meeting of all the minds.) It's not going to be the easiest conversation in the world, but it's essential for you to know what kind of budget you're working with from the get-go. The majority of couples nowadays pick up at least some portion of the tab, so the two of you should come to the table with an estimate of what you can contribute, based on what you have saved and how much more you can put aside between now and the happy day. A good rule of thumb is about 20% of your monthly income -- if you can swing it.

Like anything else, you should only plan to buy what you can afford when it comes to your wedding. If you're working with a $10,000 budget, don't plan a $100,000 affair. For starters, that $17,000 average wedding cost is an estimate based on 200 guests. If you can pare your guest list down to 100, you'll already have shaved a hefty 50% off your reception/catering bill.
If you can't stop yourself from inviting the whole debate team, your Camp Tingawa friends, and your pool hall buddies, there are other ways you can save. Check out our story 56 Ways to Save! for starters, to find out ways to trim costs in every wedding category.

Putting 20% of your income away each month sounds like a lot, but if you break it down into little increments of stinginess, you'll be surprised how easy saving can be. For example, over the next year, if you brown-bagged it three days a week (average savings of $18), you'd be $860 richer. Another way to save is to set a stringent entertainment budget for your engagement year. Limit yourself to one movie a month -- renting is a lot cheaper -- and have your friends over instead of going out. Actually, this may be the time to discover that the best things in life are really free. Check out 9 Ways to Have Fun for Free for more ideas!

If you already have a couple thousand or more put away to pay for your wedding, don't just leave it festering in a standard savings account, earning you 4% interest or less.
Try these alternatives:
-- Certificates of Deposit: Available at all banks, CDs are the financial institution equivalent of government savings bonds. They are fixed-income, short-term (typically one-month to one-year) investments, which means you put down a certain sum (usually a minimum of $1,000) at one end and the bank will tell you just how much you'll come out with on the other.
But shop carefully because CD interest rates vary widely with the economy and when inflation (and interest rates) are low, they can even dip below savings-account rates. CD rates also vary with how long you're investing the money. The longer you leave your funds in, the higher the interest rate. There are two disadvantages with CDs as well: You can't add funds to them as you save more and you're penalized if you dip into the money before the maturation date. For someone starting off with $3,000 or more though, this may be a good option, since you can lock $2,000 away for the bill-paying month before the wedding and keep $1,000 in your bank account as an emergency fund.
-- Money market: Rates are better than savings accounts and you get to write checks! Shop around as rates vary widely, as do the restrictions (such as the number of checks you can write each month, and minimum-balance requirements).

As a parting word of advice, we recommend that the two of you study these two equations well in planning your nuptials: (1) Beautiful Wedding DOES NOT HAVE TO EQUAL Expensive wedding, and (2) Love + No Debt = Happily Ever After.

Good luck!


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