Avoid Wedding Debt: How Much Does It Cost To Tie The Knot
Dreaming of a beach wedding in Maldives, with unlimited supply of champagne, lobsters and complimentary spa treatments for your guests? It sounds like a dream wedding, and also a shortcut to a debt-ridden life.
It is no secret that enormous wedding expenses strip most couples of potential savings, and leave many in huge financial debt. The idea of incurring massive debt – an amount equivalent to at least a down payment on a house – for one day of fun may sound like a foolish thing to do, but some people seem to think it’s worth it. Most people don’t expect to get married more than once in their lifetime, after all.
Estimating high financial investment for their wedding ceremony, most people are turning to personal loans and credit cards for funding. That in itself isn’t the problem, rather, it is when these individuals are unable to cope with the debts that problems begin to creep in.
Not everyone manages their finances perfectly and unfortunately, not everyone saves up sufficient money to pay for their wedding ahead of time or budget for what they can afford to spend. Some people choose to go pretty deep into debt in order to have the wedding of their dreams and wind up paying even more in interest, not to mention causing damage to their credit report.
This is not a problem that only those who lack financial education face. According to The Malay Mail report last year, a couple who worked as doctors took up a RM15,000 loan to fund their RM95,000 wedding.
If you are balking at the cost of the wedding in the example above, it is not that unusual to spend that much. Seasoned wedding planners say that the cost of an average wedding, across all races, has soared to above RM50,000.
“Back in 2008, wedding vendors were about 10 per cent lower in cost than they are now and even food costs were lower. Generally, a five-star hotel charged RM1,200++ per table. Now, that same hotel charges RM2,200++ per table,” said Leticia Hsu, president and co-founder of the Association of Wedding Professionals (AWP) to The Malay Mail.
This has led to some couples taking out personal loans to pay for their nuptials when they are unable to get much financial support from their parents.
If you are planning to pop the question to your better half soon, here are some useful tips that can help you avoid wedding debt and veer you off the debt-ridden path.
Laying the path to matrimonial bliss
To be on the safe side, if you are planning to get married someday, it is wise to start planning and saving years before.
Like saving for everything else, it is always good to account for inflation. To gauge the total cost you will need, simply check out the price of photography, videography, reception (hotel, restaurant or buffet?) and other items involved in the wedding.
The list can contain 100 items or a mere five. It all depends on how you want your wedding to be and what you are willing to forego. Having an entrance arch made with tulips imported from Netherlands may sound absolutely enchanting, but it is not essential to a wedding. The key is to prioritise.
How deep is your pocket?
Gone are the days where only the groom or the bride shoulders the entire cost of the wedding. Planning a wedding should be of equal effort and investment by both parties.
After popping the question (and only when the other half reciprocate), both future-bride and groom should sit down and have a cold hard look at their finances. It is needless to add that the person who pops the question should have a rough idea of their finances before even popping the question.
Once you have an idea of how much you would have to spend for the wedding, you should proceed to draw up a budget.
A lobster wedding on a tuna-fish budget
Having an idea of how much you want or willing to spend on your wedding, it is time to draw up a budget. This will help you eliminate unnecessary items (read: ice sculpture and/or Cirque-du-Soleil-type entertainment) to stay within budget.
It is also important to check for hidden costs especially when it comes to pre-wedding photography and videography.
Look out for promotional packages during wedding expos and it never hurts to negotiate prices.
Stay away from loans and credit cards
Unless you have superhero powers in managing your finances and funds, it is always best to steer clear of credit cards and personal loans to fund your wedding.
You can end up in deep trouble if you accumulate credit card debt while planning your wedding. Nobody wants to start their marital life together with insurmountable debts.
Instead of taking up loans or swiping your cards, cut down on the spending. This is essentially what budgeting means.
Ultimately, tying the knot is a happy occasion and signifies a lifetime of bliss with your loved one. Let not one night of celebration mar the rest of your life with debt.