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Thursday, April 13, 2017

Love and Marriage (and Money): Part One

Spring is here and love is in the air!  Wedding planning is in full bloom for those summer weddings.  With a daughter getting married in July, I’ve been made keenly aware of the financial considerations of marriage and weddings.  Recently, I read in the Grand Rapids Press that the average wedding in West Michigan costs over $30,000.  This cost has the potential to have a big impact on the financial planning for both the new couple and the parents. 

Since a wedding is such a joyful and emotional time, it can be easy to overlook financial burdens and get carried away in the planning process; plus, it is a lot more fun sampling caterers than it is talking about your budget.  So, what should we spend more time doing?

Here are some thoughts for the happy couple and their parents:

·         Decide who is going to pick up the tab for each part of the wedding.  There are a lot of resources out there that give a “traditional” breakdown, if you choose that route.  Google is your friend in this matter, and can educate you on what’s practical for a nice wedding.

·         Establish a budget.  $30,000 is a huge (ridiculous?) amount to spend for most people.  There are a lot of ways to have a fantastic and memorable wedding without the big price tag.  In my opinion, you should never take on debt to pay for a wedding.  Make it about the marriage, not the party. At the end of the day, if the two in love were married, it was a success! Don’t let the burden of new debt dilute the celebration.

·         For the bride and groom:  Don’t start your married life with financial stress due to wedding and honeymoon costs.  If you can’t pay for it without borrowing, don’t do it.  Remember, financial stress is a leading cause of conflict within a marriage.

·         For the parents:  Financial goals, such as your retirement, are more important than a costly wedding.  Don’t borrow or withdraw from your retirement accounts to pay for wedding expenses unless you have more than enough to pursue your long-term goals.  Also, beware of tax and penalty consequences for early withdrawal of retirement funds.

It’s about love. It’s a once-in-a-lifetime experience. You’re making memories. These are all rationalizations that can allow our emotions to drive decisions. These are also reasons to use caution and strategic planning when this exciting time arises. After all, you want the wedding to be memorable for the right reasons, not because you are still paying the bills years later.

A. Christopher Engle, LUTCF®, CFP®, ChFC®

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.