Thursday, October 8, 2009

How Wedding Planning Changed My Financial Life, Part 2

This post is the second part in my musings about how wedding budgeting can be a positive experience, despite all the challenges it brings up.  The first part is here.  This section looks at how my entire financial perspective started to shift once I started thinking about weddings.

A while back, I realized that J was definitely the guy for me and, at some point, we'd definitely get married. It wasn't something we talked about much, but it was something we acknowledged and that therefore changed my daydreams from traveling around the world for a year to thinking about how the heck we would ever afford joint goals like a wedding, pets, and children.  (Since L.A. real estate prices are still astronomical, daydreaming about a house is as ridiculous as daydreaming about a trip to Mars, and I just don't do it.... too often...)  Although I was financially stable (I don't carry credit card debt and had a good job) I didn't have much of money in the bank and the idea of actually paying for these goals was overwhelming. 

So I turned to the internet to help, where I ran across "The $28,000 Question" at I Will Teach You to be Rich about planning for wedding expenses. My first thought was "hahahahaha $28,000 for one day. That won't be me."  The article anticipated my dismissive response and provided a list of common reactions to that $28K figure:
  • “Wow, that’s a lot. There’s no way I can save that. Maybe my parents will help…”
  • My wedding won’t be like that. It’ll be simple and elegant”
  • “I’ll think about it when I get engaged”
  • “Luckily, I won’t have to pay for it.” (Who will? Is your future spouse thinking like this?)
  • “I have to marry a rich guy” (I’ve heard people say this and and they were only half-joking)
The article didn't discuss whether $28,000 was a "reasonable" wedding cost, because personal finance isn't about cutting all expenses to the bone. It's about making personal choices and planning for those choices, not just continuing blithely ahead and hoping everything will be okay. As the article continued:
"More commonly, though, we don't think about [wedding costs] at at all: one of the most major expenses of our lifetimes, which will almost certainly arrive in the next few years, and we don't even sit down for 10 minutes to think about it.  Something's broken here."
I had a lightbulb moment: You mean pre-engaged financial planning for my wedding is NOT bridezilla-like?  Saving for wedding costs years ahead of time is actually eminently practical? Yes, it is. And so, freed of my bridezilla fears, I started to research our possible budget so I could plan (I'm a planner, what can I say?).  Like most big-city brides, I was horrified to discover that the $28K figure wasn't that far off the mark, even for a basic, pared-down wedding that included a venue, rentals, food, alcohol, photographer, DJ, attire, flowers, honeymoon, rings, etc.  I mean, $28,000 feels absurd to me (and unaffordable) but it's not unreasonable for a Los Angeles wedding, so I used it as a benchmark, (even as I started researching cost-saving options like it was a second job).    

The article provided a sobering excel breakdown of how much we need to save each month to reach that $28,000 benchmark, based on various years-out scenarios. If J and I had three years until a possible wedding (which seemed reasonable at the time), we'd need to put aside $778 each month to hit that goal.

Ouch. (and hahahahahaha.)

So what if we set a budget at $10,000 and started making serious get-rid-of-it choices and compromises? That's $277 per month for three years.  $15,000 budget? That's $416 per month for three years.  Ouch and ouch again, but more in the price range of a car payment or two, so it felt manageable, realistic, and less panic-inducing.  What if I waited until we got engaged and we had a one year engagement (like so many people do)? That's $833 per month for a $10,000 budget.  Ouch, and absolutely not. 

The day I read this article was a very real wake-up call for me. Despite being unengaged, I immediately opened up savings accounts at ING entitled "wedding," "emergency fund" and "vacation" and started funneling automatic payments from my checking account each month.  Tangible upcoming goals made personal finance finally "stick" for me.  I started taking weird enjoyment in finding ways to cut excess, manage my monthly budget, and watch my wedding and vacation funds grow. Since then, I've added a number of other accounts, and started to think about the wedding in context of my entire life and goals.  Is the wedding more or less important to me than annual vacations?  What about new clothes?  What about saving for retirement? Planning for kids? Buying a house? Monthly salon haircuts? Saving for a new car? Buying a new house?

Ultimately, the article I read wasn't about the value of spending $28,000 (or whatever) on your big day; it acknowledges the reality of wedding-as-expense and says, quite simply, plan for it.  Don't feel silly planning for the finances while you're unengaged, because that's a much longer timeframe than the engagement period.  Don't let a wedding, a house, children, or any other life expense just happen, or you won't be prepared.($833 per month?  Ack.)

We didn't decide on a wedding budget after I read the article - in fact I didn't talk about wedding budgeting with J for quite a while. Instead, I decided what felt reasonable to spend on a wedding based on my monthly financial realities and started putting money aside. I knew, even if J and I didn't work out, I'd still have a chunk of change for my future wedding (or whatever). Once we started talking together, our combined income "reasonableness" shaped our event: if $10,000 or $15,000 or even $28,000 felt reasonable, based on a two-year saving plan, then that was our budget.  Therefore, any job changes, sudden expenditures or other changes in our financial situation could easily be accommodated in our "reasonableness" budget planning.  

How did you and your partner decide to tackle the wedding cost questions?  When did you start saving for the wedding? (am I the only uber-practical nerd who started saving over a year before the proposals?) Where did you and your partner prioritize wedding saving in the grand scheme of things?  I know these are sticky questions, but they're also part of why I find wedding planning so fascinating - It's the first time many of us have tacked big joint, messy, emotional financial decisions and compromises. And to me, that's pretty darn exciting and eminently reasonable.

5 comments:

  1. this is interesting. i think it's really great that thinking about weddings gave you a wake up call into savings. for me, i've just always been obsessed with saving, so i would never think to save for a wedding specifically since i just like to save my money in one giant pool and my primary saving motivation comes from wanting to be able to buy a house or apartment. also i expect parents to probably chip in so once a wedding budget like $10k gets divided up it doesn't seem so insurmountable anymore, although i realize not everyone has parents who can help, so everyone's situation is different.

    ReplyDelete
  2. I've always been obsessed with not having debt, but was unmotivated by general "savings." I found goal-oriented thinking, especially as a wedding became real, was the real "a-ha!" moment for finances. It was interesting to see that I wasn't alone with weddings-as-motivation (per a survey I referenced earlier.) And I think the parental questions about wedding budgets are definitely worth a future post or two.

    ReplyDelete
  3. i love your perspective on this. in today's climate, i say it's silly NOT to be practical about this stuff. even though we weren't technically engaged before last december, mike and i had known for a long time we were going to get married before then, so we've been saving - very VERY little by little - but at least it's something. mike's parents have offered to provide us help - they TOO (unbeknownst to us) had put aside some cash for our wedding. they're planners too i guess! my family helping us was already out of the question. they're more broke than us, so that whole tradition of the gal's parents paying for the wedding...um NO. and since i do feel this is a family affair put together by family for family, i don't feel so bad accepting it the help from mike's parents...i'm interested to hear your thoughts on this too...so YES to a future post on parental help!

    ReplyDelete
  4. Great post. I'm glad you're discussing this, because money was a big hurdle for us since we knew we wanted a big party. We started saving a year in advance of when we bought a ring, and I also talked to my parents a year in advance, because I knew they already had money put away. We're all planners.
    While we would love to be able to pay for everything, my paycheck in publishing and his graduate stipend make it difficult to afford a party for a bunch of our relatives and friends. After a year of saving in our own accounts, we were able to buy a ring and put down a deposit on our venue. Even though what we've saved is probably laughable to many of our neighbors here in La Jolla, I'm pretty proud of how much we've managed to save and plan together.
    Keep the insightful posts coming!

    ReplyDelete
  5. I love your take on this. I wish I had this to look at 3 years ago pre engagement but its an important perspective to bring for new wedding peeps or hopeful wedding peeps

    ReplyDelete

I love active conversations, including (civil) disagreement. I don't love spam or people who use internet anonymity to be rude and disparaging. Spam and rudeness will be deleted.