So let me start off by saying I have NOTHING against wonderful-big caked-lavishly flowered-thousand guested-giant gowned-enormous ringed weddings. I like (to attend) big weddings! They’re a lot of fun and should be the biggest day of your life! Nothing against the women readers either, I think you deserve your day in the sun, but realize what it costs! When you take into account the cost that actually goes into a wedding (and what COULD have been saved and invested with it), it can really blow you away (unless you sue for your flowers being the wrong color for 400k). Should they really be the gift that keeps on giving (to the credit cards you charged everything on)?
I took the easy route, not Vegas, but a friend of a friend of a friendwas a certified minister, and he was bought with a case of beer and a pack of smokes. He signed the papers and performed the wedding in my friends basement the week after I proposed. The wife had nothing wrong with it as we weigh the pros/cons and our financial situation. It saved us a lot of money that we didn’t have, no doubt. We were renting an apartment with one child, and one on the way, and a big wedding would have CERTAINLY chopped at the budget in a way we didn’t need at the time. Looking back on it, it may have been my best financial decision to date.
My brother got out of his wedding for the introductory price of $30,000. Yes, that’s THIRTY THOUSAND dollars. He saved up for months and months for it, and is still paying some of it off (almost 2 years later). His wife was very happy with it, her family, his family, their family’s family, and the friends of the family of the friends and anyone else in the area at the time dined on great food and expensive wine the entire day. Everyone went home happy and full while my brother sat on a huge bill. Yes, it is a memorable day, but in my opinion, shouldn’t be memorable in the checkbook for the next 2 years+!
That 30k could have done much more for him, or for anyone for that matter. 2 years at 10% interest invested would have given him $36,300 by this year and his wedding would be MAKING him money. He says that he is trying to offset it by putting $200/month into a retirement savings. Which isn’t bad at all, that comes out to $2400 per year put to retirement, but is it enough?
If we use our handy compound interest calculations with Excel, we would see that the 30k at age 25 is a HUGE knock at the potential retirement calculator. Let’s take a look at how that $ breaks down and hinders your future growth:
He’s not going to break into a POSITIVE number till 2014; almost 10 years after his marriage, and it will NEVER catch up to that initial 30k invested and NOTHING more put in it (Honestly, I carried it out 100 years to 2105 and the 30k is worth 431MIL vs 330MIL for the $200/month). This doesn’t even take into account the 3.1% inflation rate, NOR the possibility of adding $200/month to the 30k. What would that look like? Well, let’s take a look:
In 20 years you’re more than DOUBLE the 153k at 339k -it seems like an easy decision if you can convince your wife of it. With time on your side, compound interest is certainly going to give you a push to a better retirement. Let me again say, I have nothing against the people that want the big wedding and bigger dress! It is VERY important to some people, a few others weigh the pros and cons, Althouse and bw4u (I’m on your sides!).
But the wedding is for the lady. She deserves to be treated like a queen for HER day, but she also needs to be financially aware of the situation. I’d recommend proposing it WELL in advance to make sure you’re not stepping on the toes of folks planning on showing up to the big event though. I learned that the hard way – Like anything, it comes with pros and cons, but in my book the cons FAR outweigh the pros in the $$$ column.
How many people out there are still paying off their wedding? Or have recommendations to people planning on making the big jump? Any advice?