Couples and Marriage

Paying for Your Big Day

These days, many couples are waiting until they’re older to say “I do.” That maturity, along with bigger paychecks, often means the bride and groom foot their own wedding bills. Texas CPAs offer the following five financial considerations to couples who are planning – and paying for – their big day:

Consider All Financial Goals

Your cake may be edible one year later, but do you really want to still be paying off the caterer’s bill on your one-, two- or three-year anniversary? In a couple of years, you might be hankering to buy your first house or start a family – other expensive milestones in life.
Before calling the city’s top photographer or a celebrity dress designer, sit down as a couple and develop a realistic wedding budget that’s in line with all your financial goals.

Think Outside the Box

June is the most popular month for weddings and Saturdays are a common day of the week to wed. By picking a non-peak wedding month and alternate day, like a Friday, you can usually negotiate lower costs with vendors. Afternoon weddings are also usually less expensive than evening ones.

Other possible money-saving tips include limiting the guest list to close family and friends, forgoing a full bar for a champagne toast, having attendants carry a single calla lily or other flower versus a florist-prepared bouquet, and presenting a small wedding cake while serving guests from sheet cakes in the back. With a little creative thinking, you can find many ways to throw a simple, yet elegant wedding.

Check Your Financial Compatibility

You need to know yours and your future spouse’s financial compatibility for a lifetime of financial decisions, and wedding planning is a good place to start. If one’s a spender and one’s a saver, you need to establish ground rules to prevent runaway wedding spending woes. Be honest with one another about planning priorities. Together, you can make decisions about your special day that fit within your pre-determined spending plan.

Get It in Writing and Insure Against Loss

Your florist may have casually mentioned a discount to you over the phone, but it doesn’t mean a thing if it’s not in writing. Have your vendors put their deals in black and white to make them official.

Also, if you and your future spouse have a destination wedding in mind, or even if you’re having it at home, you may want to consider insuring your big day. Like other insurance coverage, wedding insurance protects against loss. A wedding in Mexico during hurricane season may be reason to purchase such insurance. So too for a cake decorator who skips town with your deposit.

Choose a Smart Way to Pay

Let’s face it. Weddings are expensive. And if you don’t have ready cash to pay for a shindig, what’s a couple to do?

One option is to set the wedding date to accommodate a longer engagement and save, save, save between now and then. The more you can pay in cash now, the more you’ll save on interest and finance charges later.

If you’re itching to walk down the aisle and don’t have time to save up, consider a loan from a family member. Most likely it’ll be much lower interest than other forms of credit and won’t negatively affect your credit score.

Credit cards can be used to pay wedding expenses. However, CPAs caution to shop carefully for a credit card that’s right for you. Find one with low interest rates and beware of low introductory rates that skyrocket after the introductory period has passed. Also, if you must charge wedding expenses, stick to a strict repayment plan by always paying much more than the minimum due each month. Otherwise, that DVD may be a technology of the past before you pay off charges for the videographer.

It might be tempting to dip into your 401(k) or other retirement savings to fund your wedding, but CPAs don’t recommend it. Dipping into your 401(k) to pay for a wedding is a taxable event and probably one of the worst ways to finance your big day. Once the honeymoon’s over, you’ll want to look forward to a golden retirement with your spouse. Your best course of action is to leave your money where it is so compound interest can continue building your retirement nest egg.

By talking openly with your soon-to-be spouse about these issues, you can be well on your way to planning an event that works for you and your future financial health. Congratulations!

Reviewed and edited by C. William Thomas, J.E. Bush Professor of Accounting in the Hankamer School of Business at Baylor University.