How to Avoid Wedding Debt

Congratulations on your engagement! Now that you and your partner have decided to tie the knot, it’s time to sit down and start planning the big day. 

Planning a wedding can be great practice for developing the financial skills you'll need as a married couple. The process involves budgeting, communication, and compromise. Those are key ingredients in a successful marriage. 

You can discuss practical matters (such as how to avoid wedding debt) without taking the romance out of the wedding. After all, marriage is for the long term. Thinking beyond the wedding to plan for how to make your lives together as carefree as possible shows your commitment to the future.

A few practical tips can help you find the right mix of romance and reality. That way, you can plan a wedding that sets you up financially for a long and happy marriage. Read on for seven steps for learning how to avoid wedding debt.

1. Determine How Much You Can Spend

As you start planning a wedding, it’s worth knowing that the average cost to have one is around $33,000. It's helpful to know what kind of money is involved in getting married. However, don't let numbers like that influence your plans too much.

After all, averages like that can be somewhat misleading. The most expensive weddings really pull the average number up. Also, wedding costs are very specific to location. Wedding costs in Manhattan, KS are going to be very different from those in Manhattan, NY.

Remember, you're not planning someone else's wedding. You're planning yours. You have the power to decide what it should include and how much it should cost. 

There's no shortage of romantic and creative ideas for modern weddings. Perhaps you've been to a few weddings, and seen elements you'd love to include in yours. If not, a look at a few wedding websites, a meeting with a wedding planner, or a conversation with a caterer will quickly fill your heads with enticing possibilities.

Before you go down that road, set some financial ground rules. Once couples start discussing specific ideas for the wedding, they can get so excited that they talk themselves into spending far more than they should. 

One key to avoiding wedding debt is to start with the numbers instead. This is a perfect opportunity for the type of conversation about money you should be having anyway. This should include:

• How much money do you have in savings?

• How much debt do you have?

• How much do each of you earn?

• Do you both intend to keep on working?

• What are your credit scores?

• Where do you plan to live—and what will that cost?

• How will future goals like having children or buying a house affect your finances?

• Will either or both your families pitch in to help with wedding costs?

Working through these financial basics should give you the framework you need to create the outline of a budget for what you'll need to live on once you're married. Based on that budget and the resources you have available, you'll start to see how much you can afford to spend on your wedding. 

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2. Discuss How to Avoid Wedding Debt

If, like most people, your financial resources are limited, one question you'll face in planning your wedding is whether to borrow to pay for it.

How to handle debt is an issue you'll face throughout your marriage, so you might as well start discussing it while you're planning your wedding.

Whether it's wedding debt, a car loan, a mortgage or a credit card balance, debt involves a trade-off. It's actually a trade-off of one benefit against two potential drawbacks.

The benefit is that borrowing can help you afford something now that you otherwise couldn't pay for all at once. This is a big consideration in planning something as expensive as a wedding. Most couples aren't in a position to simply pay $30,000 or so out of pocket. Borrowing could open up more possibilities for what type of wedding you could have. 

That benefit has to be balanced against the two drawbacks:

• Borrowing makes everything more expensive. After all, loans add interest costs to the amount you borrow. Over the time it takes to pay back the loan, that can add a lot to the cost.

• Borrowing reduces the amount of money you'll have available in the future. Every dollar you borrow now subtracts from your future lifestyle—and because of those interest charges, a dollar borrowed now subtracts more than a dollar from your future.

You may decide that this trade-off is worth it to have the type of wedding you really want. However, being aware of the trade-off will help you limit the amount you borrow so you won't overburden your future budgets with debt payments.

Also, the way you borrow matters a great deal. Often, the easiest thing to do is to put wedding expenses on a credit card—but that can be a costly mistake. Credit card debt is generally much more expensive than getting a loan. So if you decide to borrow, take the time to shop around and find the most cost-effective way of doing it. 

Whether and how to borrow for your wedding is a decision you should make before you start planning the details of your wedding. Limiting those details to what your budget can afford is a big part of how to avoid wedding debt, or at least minimize it.  

3. Decide on the Best Wedding You Can Afford

Okay, now we get to the fun part—planning the wedding.

Once you've decided how much you can afford to spend on your wedding, you can start to discuss how you want to use that money.

Remember, you'll have to stretch your wedding budget several different ways. Here are some of the major expenses you'll face, based on average costs from The Knot:

The items in the above table are listed in order of size, except for the catering expense, which depends on how many people you have at your wedding.

As you and your fiance look over this list, you may see some areas where the costs seem more worthwhile than others. Assuming you don't have an unlimited budget, you'll start to decide on where you want to make trade-offs—perhaps less for one item so you can afford an item that's more important to you.

This is where your vision comes into play. Again, you're not planning the average wedding. This is your wedding. A big part of planning is deciding where you want the money to go.

4. Don't Forget the Honeymoon

A major cost item that doesn't appear on the above list is the honeymoon. If you're planning on taking one, that's another item you should include in your wedding budget. After all, you'll have to pay for it at around the same time. 

This is yet another trade-off you'll have to make. Is a spectacular reception more important to you, or a lavish honeymoon? 

Like a lot of trade-offs, that may be a tough choice. But keep in mind that making these choices is also empowering. It lets you determine the type of experience you'll have to remember.

5. Prioritize Your Guest List

Speaking of trade-offs, settling on the number of guests could involve several trade-offs. Do you include just immediate family, or aunts, uncles, and cousins as well? Just good friends, or also work colleagues? 

The reason this is important is that the number of guests may be the single biggest variable that determines the cost of your wedding. Naturally, it impacts your catering costs. At an average cost of $80 per guest, the difference between 100 guests and 200 guests would make an $8,000 difference to the cost of your wedding. 

Beyond that, the number of guests can also impact factors like venue cost and how many floral arrangements and wedding favors you have to buy. So be selective about how many people you invite. As much as you might like to share your day with as many folks as possible, a more intimate affair might be more personal—and cost effective.

6. Make a Wedding Budget

Once you've come to terms with how much you can spend and some of the cost choices that you face, it's time to make sure the pieces all fit together into a budget you can afford.

Make a list of every single item you'll need to pay for. Then, allocate realistic dollar amounts for each of them. Doing this on a spreadsheet can make it easier to make adjustments and see the impact on the bottom line.

Hiring a wedding planner can help you anticipate these costs. Of course, that also adds another expense item to your budget. As an alternative, you can do some research to try to estimate costs. Even if you hire a wedding planner, stay involved in every aspect that affects the cost. Knowing the details will help keep your wedding planner from pushing you outside your budget. 

If you do your own research, it should be as local and as specific to your needs as possible. Also, don't overlook sales tax. It may seem like a minor detail, but tax charges can add up to a significant amount on a several-thousand dollar wedding budget.

Once again, you may find the need to make trade-offs to get the numbers to work. The table below illustrates some alternatives you have if your budget won't allow for high-end options across the board:

The above are just some examples of how you can make choices to bring the cost of your wedding within your budget.

Other cost-cutting tips include getting married outside of peak wedding season or getting married on a weekday rather than a weekend. Think carefully before planning a destination wedding. They've become quite popular, but can add a massive amount to the cost—both for yourself and your guests.

Finally, be thoughtful about your gift registry. Try to focus on items you'll need to furnish your home. This might save you some expenses later on. Be mindful of your guests as well, by registering for a range of gifts everyone can reasonably afford.

7. Get Quotes

No budget is complete until you have written quotes and signed commitments from providers. 

You'll want to start the process of getting these well in advance. As you get quotes, update your budget spreadsheet with the actual numbers.

You may find that you'll need to make further adjustments to your plans so the actual numbers still fit your overall budget. Be disciplined about this, because wedding costs have a habit of escalating as the planning process goes along. If one item costs much more than you'd expected, look for ways to economize on other items. 

Another reason for doing this well in advance is you need to get these details straight before you send out the invitations. Not only might costs affect the details you list on the invitation, but they might also impact how many people you can afford to invite. 

Make Your Wedding an Experience to Last a Lifetime

You may think that a lasting experience is all a matter of the right venue, catering, guests, and wedding vows. Those are all important, but the experience of making a wedding budget can also benefit you in the years ahead. 

First of all, figuring out how to avoid wedding debt can help you start your marriage on stronger financial ground. It can also lead to constructive conversations about how to deal with any debt you each bring to the marriage. Dealing with debt early on, through budgeting, debt relief, or other options, can stop debt from being a recurring source of tension in your marriage. 

Also the process of making a budget together is something you can repeat over and over in the years ahead. Planning ahead, working together, and being open about your needs and concerns are all skills you'll need to make your household finances run smoothly. You'll find that when it comes to making a budget two heads—and hearts—are better than one.