Romance & Money
Creatively Paying For Your Upcoming Wedding
How much debt is too much?
Danielle in New York:
"We make good incomes, roughly $50,000.00 each, and have no children, no
mortgage, and no large credit card debts (not more than $5000.00 combined). We
plan to be married sometime later this year and are planning the wedding now.
How much debt should we take on for our wedding and honeymoon? How much is too
Danielle, first you need to consider what kind of wedding and
reception you want and what it may cost. The average formal church wedding and
reception costs approximately $20,000.00. If, in fact, you have no children, no
mortgage, and no additional outstanding debt, pay off that $5000.00 as soon as
possible. Then start saving. If you plan on an August wedding, you should save
$1700.00 a month, based on your income and information, and you would have over
half of your wedding paid for up front. If you must use credit for the rest,
then consider the monthly payment. The average interest rate on credit cards
varies greatly, but at 9.0% on $10,000.00, your payment could be between $75.00
and $150.00 a month. If you pay only the minimum payment, it will take you over
twenty years to pay off this debt. Only you can decide what's acceptable.
I would advise that since you make a good income and have minimal obligations,
saving for your wedding and paying cash for at least 80% will be a great way to
start out in your lives together. This plan also provides you with the
opportunity to create an ongoing 'savings' habit.
Don't forget to take into consideration your one, five, and ten-year plans. Do
you plan to buy a house soon? Have children? All these things cost money and can
dramatically change your life. Will you continue working if you do have
children? How will the burden of debt influence your future decisions?
Only the two of you can decide what's acceptable. Take into consideration what
your wants and needs are currently, and try to project what they will be in the
future. If you make the decision to use credit to finance your one wedding day,
then understand the potential impact on your financial future.
Building these skills now will provide you with a solid foundation for joint
decision-making, and a healthy partnership in the future.
Only you can decide how much debt is too much. But, have a plan, know your
goals, and understand that most debt is a choice. Make your choices wisely
because they will frame your future.
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