First Comes Love, Then Comes Marriage…

…Then Comes a Load of Debt Too Big to Hold in a Baby Carriage!

By Christopher Vasquez & Chaney Barton

June is the most popular month for weddings, and often wedding expenses are the first big-budget items couples handle together.  How well a couple handles these decisions has the power to set the tone, good or bad, for future financial decisions, which is important because financial differences of opinion can be one of the big challenges in a marriage.  Unfortunately, nearly half of the couples tying the knot in 2014 went over- budget and another 23% did not even have a budget – so they may have started off on the wrong foot.

At the beginning of the year The Knot, the top wedding website that provides wedding planning advice and tools, released the results of a “Real Weddings Study” survey conducted in 2014. “The eighth annual comprehensive report, the largest of its kind, surveyed nearly 16,000 US brides and grooms married in 2014 to uncover the financial spending habits and trends of real weddings in America.”  By pulling out specific statistics from the study that are relevant to the Austin area and taking into account our own wedding planning experiences, we hope to give readers some thoughts to ponder about the financial planning that perhaps should go into a wedding.

Top 25 Most Expensive
Places to Get Married1. New York – Manhattan $76,3282. New York – Long Island $55,3273. New Jersey – North/Central $53,9864. New York – Westchester/Hudson Valley $52,9545. Illinois – Chicago $50,9346. New York – Outer Boroughs $49,7817. Pennsylvania – Philadelphia $44,0908. Rhode Island $41,9149. California – San Francisco/Greater Bay Area $39,69010. New Jersey – South $39,19111. California – Santa Barbara/Ventura $39,18712. Washington DC/Northern VA/Suburban MD $39,02513. Connecticut $38,92514. Massachusetts – Boston $38,66515. Florida – Southern $38,15516. California – Los Angeles $37,31717. Louisiana $35,53218. Hawaii $34,95819. Maryland – Baltimore $34,40920. Texas – Houston $33,80921. Illinois – Chicago Suburbs $33,39122. California – Orange County/Inland Empire $33,11823. California – San Diego $32,94124. Pennsylvania – Pittsburgh $32,35925. Texas – Austin/San Antonio $31,886*Based on average cost of a wedding in 2014 ($31,213). All numbers exclude honeymoon cost

The Knot released a list of the Top 25 Most Expensive Places to Get Married, based on the US average cost of a wedding ($31,213 national average – excluding the honeymoon).  Perhaps not surprisingly, since everything is bigger in Texas, Houston-area weddings landed at #20 with an average cost of $33,809.  Austin secures a spot on the list at #25 with an average cost of $31,886.

At Lucien, Stirling & Gray Advisory Group, we offer financial advice with the long-term in mind.  One key piece of advice about long-term wealth-building that applies to everyone: Always live below your means, and be disciplined about where you spend.  Yet to restate, according to The Knot, “In 2014, 45% of couples went over budget, about 1 in 4 (26%) of couples stayed within their budget, and only 6% of couples came out under budget.  23% didn’t even have a wedding budget, up from 17% in 2009.”

The couples are not the only ones who should be concerned.  In fact, very often someone else was footing the bill.  According to The Knot, “On average, the bride’s parents contribute 43%, the bride and groom contribute 43%, and the groom’s parents contribute 12% of the total wedding budget (others account for the remaining 2%).  Only 12% of couples pay for the wedding entirely themselves.”

Knowing that Austin is an increasingly popular wedding destination, one of the most expensive places to get married, and that many couples go over budget, the idea of a wedding in your future (or your child’s/grandchild’s future) may seem overwhelming.  However, planning for a wedding is just like planning for any other life transition, and at Lucien, Stirling & Gray we approach the planning process the same way.  A wedding is a personal process, and no two couples will have the same approach, but by establishing realistic expectations early on in the planning process and sticking with it, you can set yourself up for future success.  If you are diligent in your planning, you may also find yourself like our own team member Chris Vasquez, who found some creative ways to optimize their resources when he and his wife planned their wedding.

Purposeful spending leaves newlyweds with multiple options.  Perhaps after careful thought, splurging on exotic flowers, decorations, and a champagne toast for everyone is definitely a priority.  On the other hand, depending on your priorities, trimming $5,000 from your budget could instead give you an added head start towards all the other financial opportunities and responsibilities that come in a long and happy marriage – a home, kids, seed capital for a business opportunity, or funding for an educational opportunity.  And what about retirement?  $5,000 invested in a Roth IRA at 8% for 50 years would grow to – $269,390 tax free!  All of these are milestones you may eventually reach.

For further reflections on this subject, check out the previous article written by Bleckley Dobbs, CFP®, in May 2013, titled “Love & Money: A Look Back at My Early Investments.”

Wealth is not always about money.  Although it may be easy to get caught up on the details of the “Big Day,” it is important to remember what the ceremony symbolizes and the true reason for the wedding in the first place.    At the end of the day, it is not the price tag that goes along with the wedding that makes it memorable or special – it is the lasting relationship that grows from that moment. A wedding is a day – A marriage is a lifetime.