Advance planning and a little discipline can keep you out of wedding debt
In Canada, the average wedding costs just over $29,450, according to Weddingwire.ca. That’s a pretty steep price tag, especially when those taking their first nuptials are an average of 30 years of age.
Unfortunately, many couples start their wedding planning assuming they can keep costs under control. By the time the big day comes, nearly a third (31 per cent) of couples admit to taking on debt just to pay for their wedding.
Does this mean it’s acceptable to take on debt to have the wedding of your dreams? Not according to Greg Wilson, a chartered financial analyst and co-founder (along with his wife) of the lifestyle blog ChaChingQueen.
“So many relationships fail because of arguments over money. Why perpetuate the problem by going into debt together?
If you aren’t in a position to afford the wedding you want, then have the wedding you can afford,” says Wilson.
“You can always have a much larger anniversary party later.”
Since starting married life with significant debt is no fun, here are four suggestions to help minimize costs and maximize fun on your big day.
Get serious about saving
While it’s easy to look at each line item and strategize how to cut costs, a couple’s biggest hurdle is setting aside money to pay for anything.
“Financially preparing for wedding costs means budgeting, saving money for it, and not overspending,” says Anthony Martin, CEO and founder of Choice Mutual.
That’s precisely how Kelley Skar and his wife tackled their wedding budget planning. Unlike many young couples, Skar and his wife didn’t get help from family members.
“We were engaged for a year, which allowed us to save and pay for cash for the entire wedding,” explains Skar, an Edmonton-based father, real estate agent and founder of rewrittn. So even though the entire event cost the Skars about $18,000, they started their new life together wedding-debt-free.
A good strategy is to open up a separate account for wedding costs. Then, only deposit money designated for this event, and only spend the money in this account on wedding costs.
Set a wedding budget
Saving up for a wedding is critical, but so is setting a budget.
“Having a maximum amount you’ll spend on your wedding can help you plan without overspending,” explains Martin.
For many, determining a total cost and figuring out what to pay for each component can be a difficult or intimidating process.
Prioritize your wedding needs and wants
When planning your wedding, it’s easy to prioritize pleasing others.
“When planning the finances of your wedding, always prioritize the costs you and your partner think are most important,” says Paul Sundin, a CPA and tax strategist at Estatecpa.com.
Once you know what’s important to you and your partner, you can allocate how much to spend on each area and category.
“Setting a maximum budget for each category and sub-category helps prevent impulsive purchases and helps prioritize your spending,” says Martin.
“It is your wedding, after all, so it’s best to decide which wedding elements are the most important. This will be where you spend the largest chunk of your budget,” says Sundin. Better still, prioritizing your needs and wants makes it easier to start cutting down on other items since “you’ve already determined your non-negotiables.”
Look for ways to minimize debt costs
But what if you really can’t save up enough before the big day? Is it OK to take on wedding debt, then? While there are schools of thought that suggest no debt is good debt, there are financial professionals who concede that debt has an unavoidable role in our lives and budgets.
For instance, Keegan Schmidt worked with a couple last year who chose to take on $10,000 of debt to pay for their wedding. As a certified financial coach with Deeper Than Money, Schmidt asked the couple to walk through their plan for paying the money back.
“The amount of debt was intentional and planned. They chose to set aside $1,000 per month to pay off the interest-free debt within a year.”
How much debt you take on and how quickly you pay it off can only be determined on a case-by-case basis, but Schmidt is clear with her clients: “Only take on as much debt as what fits into your plan.”
“No one wants to be paying off their wedding for the next three years,” says Schmidt. So when the numbers don’t fit, go back to your budget and find ways to save.
One way to minimize the cost of wedding debt is to look for no-interest loans or zero-percent balance transfers offered by some credit card companies.
Use one credit card — say a cash back card — to pay for all the wedding costs. Then transfer to the zero-percent APR card for six to 12 months of interest-free payments, explains Marina Vaamonde, founder of HouseCashin.
Keep in mind, the balance transfer will come with a fee, so you’ll need to add that cost into the budget — but a 2.5 per cent balance transfer fee on $10,000 is going to cost you much less than if you slowly paid off the same sum on a credit card charging 29 per cent interest.
Another option is to talk to your wedding service providers to find out who offers zero- or low-interest payment plans, says Carter Seuthe, CEO of Credit Summit. Amortizing the payback of a small wedding loan can be manageable, and the no- or low-interest allows you to avoid paying extra for the privilege of a fantastic party.
“In the end,” says Skar, “we need to remember that it’s an expensive party for friends and family.”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
1 in 3 Canadian couples go into debt to get married; is that a good idea? | Edmonton Journal
Jun. 22, 2022 "The 2022 wedding boom: Budget 30% more amid inflation, shortages": Today I found this article by Tara Deschamps on BNN Bloomberg:
Alexandria Gilles and Eric Thang had their hearts set on marrying at a local golf course they booked more than a year in advance.
Instead, the Newmarket, Ont. couple will celebrate their fall nuptials at a community hall — a location they moved their big day to because of costs.
"We were taking on a second job. My sister, my maid of honor, she put out a GoFundMe page, but it wasn't enough no matter what we did," Gilles said.
"We finally sat down and were just like, 'we've got to be real here. That's our dream wedding, but right now it's not going to happen.'"
The 80-person, golf course wedding would have cost at least $30,000, including $16,000 for food. The hall, however, costs $400 to rent and a local vendor will charge $4,000 for the meal.
The couple’s experience is a lot like others marrying this year and discovering the already competitive and pricey wedding industry exacerbated by the COVID-19 pandemic, 30-year high inflation, supply chain challenges and labour shortages.
A study of 19,993 couples from The Knot, Wedding Wire and Bodas.net found the average Canadian wedding cost roughly US$29,450 in 2018 — a total omitting honeymoons, rings and other jewelry.
This year, Shannon Kennedy is advising clients to budget at least 30 per cent more than usual and warning of "a wedding boom.”
"It's forecasted to be the largest number of weddings taking place worldwide, more than any other given time in history," said the owner of Ottawa-based Kennedy Event Planning.
"You have people who have postponed from 2020 and 2021 and then beautiful couples who just always intended to get married this year, so there's twice as many people at the same number of venues and suppliers."
For those keen on cutting costs, she recommends reducing the guest list, celebrating on a weekday or even next year, when some believe the boom will dissipate.
Toronto couple Lauren Datta and Steven Braithwaite, who will wed in July 2023, are hoping that advice holds up.
"We decided to just have a bit of a longer engagement, save up more for the wedding," said Datta.
Others are still forging ahead with 2022 ceremonies, but keeping an eye on prices.
Jess Murray, the Halifax planner behind Wedding Whisperer, estimates half the nuptials she is co-ordinating this year are scheduled on Wednesday and Thursday because of “sticker shock” and availability.
Weekday clients usually save on locations and catering because venues often set a minimum spend based on how much money they would earn if you weren't having your wedding then, she said.
Weekday wedding hosts also have more choice of photographers, makeup artists and hair stylists and avoid Fridays or Saturday premiums, she said.
Payments technology company Square found demand for dresses, including bridal and wedding gowns, was up 95 per cent from last year as of May, while those selling wedding products like cupcakes, travel packages and makeup found demand was seven times what it was in the same period last year and 20 times the demand seen in 2020.
Nearly every vendor Murray encounters is facing trouble sourcing products, so orders need to be placed even earlier.
The latest woe she experienced is trouble sourcing helium for balloons, while Kennedy noticed some flower costs soar by 600 per cent because growers are struggling to keep up with demand.
"The cost of what is a very common wedding rose that would have been $2 or $3 is now, in some cases, $16 to $23 for a single flower," she said.
Payments processor Moneris recently found what Canada spent on bands and orchestras this April was up 344 per cent from last year, while catering rose by 136 per cent, followed by beauty and barbershops at 67 per cent.
Some of the most common price increases are on menus.
"Chicken is up quite a bit, anything that contains flour is up and we get daily notices of price increases," said Mark Pruger, owner of White Table Catering Co. in Abbotsford, B.C.
The cost of chicken was up 5.6 per cent between April 2021 and 2022, fresh vegetables increased by 8.2 per cent and fruit and nuts climbed by 6.4 per cent, Statistics Canada said.
The average transaction size among caterers is up 41 per cent year over year, the Square report said.
Shortages are also common and its become more expensive to recruit support staff like dishwashers, severs and prep cooks, so Pruger's team often turns to alternative suppliers and presses couples to think far ahead.
"We booked out this year...very quickly, and we can't take any more," he said.
"For 2023, events are coming in very, very quickly, and we have people calling to see if we know of a venue that's available because things are getting harder to get."
The 2022 wedding boom: Budget 30% more amid inflation, shortages - BNN Bloomberg
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