Wedding Budgeting

Six Tips For Planning Your Wedding Finances

By Andrew Gilman

Weddings often used to involve a simple trip down the aisle and a modest reception with family and close friends. But today, weddings are typically more complicated, part of a huge multi-billion dollar industry. From the flowers to the invitations to the wedding dress to the honeymoon, couples will spend an average of $26,327 on their weddings according to a May 2005 study by The Fairchild Bridal Group. This is a 73 percent increase in wedding spending in just the last 15 years. With approximately 2.1 million weddings-a-year, the bridal industry will rake in $125 billion in 2005 alone.

Making matters more challenging than ever for the bride-and-groom-to-be, many parents of the brides are rebutting the tradition of paying for the wedding. According to the same Fairchild study, only 25 percent of the bride's parents will pay for the entire wedding, often leaving the blissful bride and groom to fend for themselves. In fact, 27 percent of couples polled by Fairchild expect to pay for their weddings on their own, while 16 percent said they expect to pay for their weddings with some help from both sets of parents.

Footing some or all of an average price tag of over $25,000 can set the new couple off down the aisle with a hefty financial burden. Here are some tips to help you prepare financially for the big day.

Tip # 1 — Save, Save, Save: The first step in preparing for your big day is to save and then save some more. Start early, perhaps even planning a long engagement to provide more time to save. Consider opening a separate savings account with an automatic withdrawal from a checking account so that you are saving money on a regular basis from every paycheck deposit or on a monthly basis.

Tip # 2 — Develop a Budget and Stick To It: According to the same Fairchild study, half of the couples polled exceeded their original budgets. Sit down with your spouse-to-be and/or family and figure out how much you can afford to spend for your wedding and honeymoon. Your wedding bills should be paid in cash, meaning money available without the help of a loan, credit cards or tapping into any retirement savings. Conduct some preliminary research to gauge the prices of bands/DJs, flowers, cakes, catering, dresses, etc. to give you a more accurate estimation. Or you can log on to The Knot (www.theknot.com) and use their online budgeting tool.

Tip # 3 — Look for Bargains: Be sure to shop around for deals. For example, the average wedding dress costs $790, according to a June 2005 report on MSN Money. However, wedding dresses are often marked down at the end of the bridal season in August. Or look into to the many online websites that sell bridal and bridesmaid dresses for up to 40 percent off from brick and mortar retailers. The earlier you start your bargain hunting, the better.

Tip # 4 — Get A Little Help From Your Friends: With today's high costs for weddings it is no longer unheard of to register for wedding event items and have friends and family help pay for the photographer, wedding cake or even for a portion of the honeymoon. At www.viator.com, you can purchase a gift certificate for more than 4,000 activities, tours and events worldwide, for example. At many popular honeymoon registry websites, couples can request specific items, activities or adventures. Additionally, family and guests can purchase American Express Gift Cheques that the couple can use towards the wedding or honeymoon that may not be on their registry.

Tip # 5 — Take Your Wedding Out of Town: Traveling abroad for your wedding may sound more expensive, but couples that have "destination weddings" tend to spend 41 percent less on their receptions than those who stay home according to June 2005 CNN Money report. Those who have destination weddings tend to have smaller receptions and smaller guests lists. Additionally, couples planning destination weddings can often attain special discounts with airlines and hotels.

Tip # 6 — Meet With a Financial Advisor: Consider meeting with a financial advisor who can help you put a comprehensive financial plan in place for the big day while considering your financial future beyond the wedding and the challenges that may lie ahead.

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This information is provided for informational purposes only. The information is intended to be generic in nature and should not be applied or relied upon in any particular situation without the advice of your tax, legal and/or your financial advisor. The views expressed may not be suitable for every situation.

Andrew Gilman is a financial advisor and publishes the Financial Planning Forum blog. Article republished with permission from the author.