How to Finance Your Wedding

How to Finance Your Wedding How to Finance Your Wedding An average wedding today with about 200 guests can cost you in the range of $20,000. Even if you have a wedding on a much smaller scale and with quite a few trimmings, your costs are likely to exceed $6,000. Right from the wedding ceremony to the reception, decorations, flowers, caterers, photography, music, wedding attire and the honeymoon, couples wouldn’t like to compromise on any aspect of their wedding. But just being emotional about the upcoming big day of your life won’t fetch you the money required to finance it. Considering the huge expenses involved in a wedding, you and your partner will need to plan for it well ahead of time. Here are some means to help you on how to finance your wedding.

Start planning for the wedding as soon as you decide to get married, even before the official engagement takes place. Allow yourself sufficient time (a year at the least) to build up on your savings. Plan your savings in such a way that taking a loan for the wedding becomes your last resort.
Set a budget for everything and make sure it is realistic. Do not be tempted to go overboard when you know something is beyond your reach. Make an estimate of all the savings you and your partner have till date and discuss what other options are available before you. If you do decide to go in for a loan, work out the math and find out if you can actually afford a monthly commitment on your current income.
Discuss with your partner and try to save as much as possible in the months preceding your wedding. Open an account with a credit union, which offers higher interest rate than a commercial bank. Money market funds with monthly interest payments also work well. Short-term certificates of deposit (CD) are fixed-income saving tools and come in variety of maturities. The only drawback is that you cannot draw into them until they mature.
One of the best ways to stay out of debt is to make payment as you go. Most of the wedding vendors including the caterer, baker, florist and the reception hall require 50% deposit at the time of placing the order. So you will end up paying half the costs there itself. Use your current income and savings for clearing off bills as and when they get presented.
If you or your partner owns a house, a home equity loan may sound tempting. But you must be clear about your monthly interest payments. Certain home equity loan agreements require a lump sum payment after a few years.
Some other options of borrowing include taking a loan against your whole life insurance policy or withdrawing from your 401(k). The former does not require you to repay back the loan but will reduce the policy’s coverage by the loan amount. A loan from your 401(k) plan needs to be repaid within five years. In addition, you need to pay taxes on the withdrawn amount and some penalty charges. Make sure that you read the loan agreement carefully before signing it.
Family help can also assist in covering some of your wedding costs. Both you and your partner can consider requesting friends and family to pitch is some cash and help out with the expenses.
Finally, you can also deliberate on some cost-trimming options like having the wedding during the off-season period to be able to get some discounts. Picking a wedding venue like a beach or park will also save you on the venue costs.

Warning:

You would do well to remember that monetary issues are one of the primary reasons of marital discord. Do not enter into a new relationship with a debt more than you can handle. Your wedding day is definitely important but there is no justification in compromising your future life for a one-day extravaganza.