The Frugal Couple’s Guide on What to Do Financially Before a Wedding and Marriage
Exactly one month from today I am getting married and I can’t wait.
I can’t wait to marry my wonderful fiancé, see my closest friends and family all together, eat some bomb Mexican food, and wear my ‘Casey Affleck from Gone Baby Gone’ suit. But if I told you that those were the only reasons I’m excited for the wedding day to finally come, I’d be lying.
Wedding planning has been the most time-intensive task and most expensive thing since college. Weddings are expensive (duh) and take a lot of time to plan all of the details on your own. To keep myself from complaining for the rest of the post though, let me get to the point.
When you are getting married, planning a wedding, and starting the next chapter of your life committed to someone else, there are some very important steps you need to take that are related to your finances. Many (if not most) marriages that end up in divorce are due in part to money related problems. It’s key to start off your marriage on the same page (or at least the same chapter of the same book) in regards to personal finance before you tie the knot.
Keep reading for 8 things you should do together as a couple before you get married and have your wedding (including one step that can easily save you over $10,000).
1. Be Completely Open About Your Finances
Sharing intimate details about your bank account balances and retirement savings is not how you found your potential mate (I hope), but by the time you are close to committing to marriage you should know the financial situation of your significant other. My fiancé and I sat down and talked through all of our accounts that were part of calculating our net worth before I proposed to her.
While I choose to pay off all of my debt before getting engaged to marry, I don’t think it’s absolutely necessary to do that in all circumstances. Just be aware of what each other’s financial standing is. Look up everything from loan and credit card balances to credit reports and scores and share them with each other.
2. Discuss Your Big Long-Term Goals
By long-term goals I don’t just mean strictly financial ones, but anything either of you want from life. You want to make sure you have similar plans for the future before you commit your lives to each other. These big goals take a long time to save up for, so you’ll want to make sure your priorities align.
A lot of people go into marriage without really looking at any sort of path for the next eighty years together. Discuss the big things you both want in life (where you want to live, do you want a house, how many kids, do you want to travel first, etc.) before you say “I do.”
3. Determine How You Want Your Accounts Set Up
You should first determine if you want to combine your money or keep it separate. I’m a proponent of combining because marriage is a lifetime commitment, but you have to make your own decision. (For advice on how to decide whether or not combining finances is right for you, read Trent Hamm’s post here.)
Next, if you are like my fiancé and I, you have too many bank accounts, credit cards, some store specific cards and retirement accounts. You’ll want to simplify your accounts as much as possible as you get married. Some people wait till after the wedding to do this, but we got started sooner by opening a joint savings account at ING Direct to save for the wedding together. Map out the perfect and simple set of money accounts and work to put them in place.
4. Start Having Monthly Money Talks (MMT’s)
(I know the term “Monthly Money Talks” is extremely sexy, just hold it together, would ya?) Find a time once a month to sit down and seriously discuss that state of your money situation with each other. Try reading through books like Your Money or Your Life and Smart Couples Finish Rich together.
To make sure these talks go well, follow these rules:
- Don’t point fingers.
- Don’t blame each other.
- Focus on looking forward, not backward.
- Be completely honest.
In fact, use that above advice for relationships in general, not just for your MMT’s. We would all be better off if everyone acted that way.
5. Discuss Specifically What Kind of Wedding You Want
A few days after you are engaged, you’ve told your family, and it is “Facebook official” sit down and talk about what kind of wedding you both want. Don’t just tell the other person what you think they want to hear though. Give your honest opinion on what kind of wedding you want. This step alone can save you over ten thousand dollars if you follow it.
For example, you may both want a simple ceremony with just your parents there in a rural setting. Bing, bang, boom: frugal wedding. If you both assume that the other person wants a 250 person wedding at a country club you’re both going to just go with the flow because you love each other. If you both want a simple wedding, for crying out loud, have a simple wedding. It’s your day and you are going to be the one’s paying for it, so do what you both want.
6. Be Realistic About How Much Your Wedding Will Cost
When we first starting talking about how much our wedding would cost I thought $8,000 for the whole thing was reasonable number. I couldn’t have been more wrong. I would say, “its just a single day, it shouldn’t cost THAT much”, but if you are going to have a wedding with all of the staples (gown, venue, food, DJ, suits, honeymoon, photographer, etc.) they start to add up.
Costs add up even more if you get married by a major metropolitan city (east of Portland for us) or somewhere small that only has a few vendors to choose from (that can pretty much name their own price because you have no other options). When in doubt, overestimate how much your wedding will cost by 25% to 50%.
7. Figure Out How You Will Pay for the Wedding
You may be saying to yourself, “Caleb, you’re a huge personal finance nerd. You probably had all the money saved up to pay for a wedding a year in advance.” Au contraire.
From 2008 to 2010 I focused on paying off my $28,000 of debt with any extra money I had. I next saved up an emergency fund and then finally saved up for the engagement ring last fall. Dropping that much on a ring wasn’t easy for me, but it was just the beginning of wedding expenses. “We’ll figure out how to pay for the wedding later,” I thought. “We will have a year to save for it.” Well, we set the date for about eight months out and the expenses starting racking up right away.
We are paying for the wedding through a combination of personal savings and family contributions. Despite the planning and help, the wedding is hurting our savings and net worth. My fiancé and I don’t regret how much we are spending, as we wouldn’t really change any part of it if we did it all over again.
It’s just that we wish we would have slowly saved for a wedding using the system Ramit Sethi recommends. You shouldn’t go into debt just for a wedding. Figure out what you can realistically afford, see if your family is going to help (in my view it’s rude to expect help, but not rude to ask if they are planning on helping), and determine how much you are willing to spend on the whole event.
8. Decide What Parts of the Wedding Are Most Important to You
When my fiancé and I were planning out wedding expenses (which I’ve determined is pretty much impossible to be at all accurate with) we talked about what we were willing to minimize spending on as well as splurge a little bit on. We determined that some of the most important things for us were a venue that would house our family for the whole weekend together, pick a talented photographer in the Portland area, and the bridal party attire.
To make up for the extra spending in these areas, we are having a simple honeymoon (Europe can wait), doing a lot of the décor ourselves (okay, mostly Jen) and not having a professional videographer (as much as we would like to). Determine what parts of the wedding are the most important to you and your fiancé and then cut back a bit on those that aren’t.
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If you and your fiancé take the time to go through even some of these steps, you will start to build a chain of trust and understanding around your finances instead of surrounding them with mystery and secrets.
In summary:
- Be aware of what each other’s financial situation is.
- Discuss the big things you both want in life before you say “I do.”
- Simplify your financial accounts (together if you choose to).
- Find a time once a month to sit down and discuss money with each other.
- Honestly determine what kind of wedding you want.
- Estimate your wedding costs and be realistic, not optimistic.
- Figure out what you can afford and how much you are willing to spend.
- Pay more for parts of the wedding that matter and cut back on what doesn’t.
How did you and your significant other handle the finances for your wedding? What advice would you have for other couples planning theirs?