Starting Your Marriage on the Right Foot Financially
Getting married is a huge commitment emotionally and financially. So having the ‘money talk’ in a serious relationship is a necessary step before any marriage plans. You want it to start out right so you can build a solid future together. You also need to know if your potential partner is wise and truthful about their present financial situation, their income, their past financial issues, if any, and their saving/spending habits. Go into marriage with your eyes open and no debt.
When looking back later, you will want to look fondly at the memories and feel good about the financial choices you made at the time, including the financial habits you began forming together. How you and your partner manage the financial stress of a wedding will be telling. The following information outlines how you can successfully manage your finances with your partner when starting out in a marriage.
Before Planning a Wedding Know Who is Paying for What
Before making any financial commitments, you need to know who will be paying for the wedding. You need to know if you are paying for the wedding on your own, if your parents, or others, are paying for some costs and whether or not each set of parents have a set amount of money to spend. Times and expectations have changed. These questions must be asked as soon as possible. Remember, weddings do not have to cost much at all. Plan your wedding within your means. You will have better things to spend your hard earned cash on in the future, more lasting than a one day event and a trip to sun and sand.
If your family is contributing financially, don’t think of it as free money; this isn’t the lottery you won. Your family worked hard to earn and save that money, so spend it wisely if you need to spend it at all. You may want to know whether or not the funds committed to you by your parents, others, can be used, not on a wedding spree, but as a home down payment or furnishings or whatever. If so, have the discussion.
You might also want to set aside a portion of your planned wedding expenses for last minute emergencies. Inclement weather at an outdoor wedding, vendor cancellation, or a forgotten cost are examples. Budgeting for the unexpected can help to buffer costs. Any leftover money can be saved as a future emergency fund.
Create a Wedding Budget, Mindful of the Associated Ancillary Costs
Recognize that many people get caught up in a “dream wedding” and end up thousands of dollars in debt. Weddings are big business to many industries like reception halls, flower shops, photographers and videographers and DJs. Wedding magazines and annual wedding shows market all the spending possible and there are even industries catering specifically to weddings, including wedding planners and dress shops. Each year the cost of weddings rises, with the average wedding currently costing more than $27,000. A wedding is one of the most expensive events a couple will encounter. It takes a significant amount of time and resources to plan a wedding, which all revolves around a single day. Remember to keep in mind that the goal is to get married and you will be married whether or not you spend much money at all. If you are trying to live a fantasy for a day, come hell or high water, most likely that is what you will achieve in the months of hell and high water ahead. This will be a different story if you are already financially able to pay for all these expenses along the way.
To help keep your wedding day costs down, start by setting parameters around the size and scope of the event. Limit the number of guests you invite to the reception; you can always invite more for the ceremony or see more at an after party. Scale down your expectations. Your family and friends know you are just starting out and could not comfortably manage something elaborate on your own or without going into debt. Decide how you would fare if your reception was held at a more economical location. Limit the number of courses to a meal; do you really need more than an appetizer and main course if you provide your own desserts with wedding cake? Can your guests have fun no matter what location you select?
See if there are more affordable substitutions possible, such as an iPod playlist instead of a ceremony violinist or reception DJ. If you are flexible and creative, you can even do it yourself, such as hiring one of your guests to do the photography or video. See if there is anything you can make, buy used, or borrow, such as a collection box for envelopes.
When deciding what you will spend, refuse to go into debt for your wedding; it’s okay to dream about your wedding but say no to expenses that don’t fit into your budget. Your wedding will be over quickly and you don’t want to be paying for it for years plus interest.
Make sure your wedding budget takes into account the ancillary costs associated with weddings, such as the cost of an engagement party, invitations and thank you cards, showers/stags, a rehearsal dinner, wedding bands, gifts for the bridal party, a limo and hotel, and honeymoon if you take one. Ask married family and friends how they managed their wedding, what mattered most to them and least, so you can gain some perspective when you plan.
Create an Everyday Budget and Plan for the Future
Too often couples anxiously await the wedding without putting thought into planning for after the wedding. There is no reason why you cannot have two budgets going on at the same time. To create an everyday budget, you need to have an open transparent discussion about your finances and what assets and/or debt you each bring to the marriage so you can create a spreadsheet of income and expenses. Talk with your partner about your views on money, what you learned from your parents and from your own experiences and what you do and don’t agree with or want to do differently.
Once you have created a budget, agree to revisit it each month. Disclose all of the actual expenditures and the expenses planned, just like you would at a business meeting. Talk to your spouse and make goals and adjustments to those goals as necessary.
With arguments over money being the leading cause of divorce, your marriage will start on a good footing if you can talk about money and communicate to keep your costs under control. How you manage the expenses of your wedding will be an indicator of how you manage other big expenditures in the future along with the small ones. It may also indicate that you both have similar or very different beliefs about how to handle money. You will seriously have to decide whether or not to continue with the ceremony. Better now than later.
How you approach your wedding if debt is involved can affect you for a very long time if you start without a repayment plan. Weddings are not about how much you spend. You need to be able to work together to succeed at common goals, and setting your goals together will also help to unite the two of you.