Tips for Managing Debt after Wedding Wedding is probably the most expensive event people spend for in their whole lifetime. Some of us even get into huge debts to be able to make this event memorable…or for some, a talk of the town. According to TheKnot.com, a wedding website that does an annual survey of wedding costs, the average amount that Americans spend for a wedding last year is as high as $30,000. That’s pretty steep for a one-day event! Indeed, it is. Yet many consider wedding a necessary luxury. After all, we’d like to look back at the happiest memories in our lives so the gargantuan spending is justified. It is for this reason that the wedding industry brings in around $50 billion per year to the U.S. economy. Nowadays, weddings have gone far beyond the necessary rituals and probably into a show in order to portray the best possible image of our love stories. From wedding gowns to venues, to photographers and video editors, we want them all to be the best. Unfortunately, they don’t come cheaply and may cause some of us to be indebted and to begin life together by paying down debt.
If you’re in the same situation, what should you do? Here are some tips for managing wedding debt.
Set priorities How much is your total debt? How much is charged on your credit card? Which debts have the highest interest rate? It is important to set priorities in paying debts especially the ones that carry high interest rates. In fact, it makes sense to prioritize paying your debts first than taking out a new car loan or a house mortgage — a couple things that newlyweds think are must-haves ASAP. Understand that as newlyweds, you have to start somewhere and you can’t have everything at once. For now, you have to make sacrifices like moving to a cheaper place, getting a second job (and planning the next child) as you work towards eliminating your wedding debt, Penny pinching helps Now is the time to be frugal because whether you like it or, it helps. The savings you get from practicing frugality add up. They may not look big enough but looking at the overall picture, they will still help you reduce your debt. Live way below your means and set your own standards for living. Who says you need to keep up with the Joneses?
Budget, budget, budget If you’re not used to pinching pennies or living frugally, it might make you feel deprived. After all you’re supposed to enjoy your new life. A good practice is to have a budget for enjoyment — and to stick to it through thick and thin. Having a budget for leisure and vacation will make you avoid compensating for the feeling of deprivation, which could lead to overspending instead.
Work as a team If you are to tackle a huge debt problem, you are to work as a team with your backs against each other. You have to devise a plan that will work for both of you: do you want to pool your income together and pay one debt at a time, or do you assign a debt to each one and tackle them separately. For instance, should both of you pay for the gown or should the bride pay alone? You might also want to take into account the monetary gifts you have received from your wedding and decide how much goes to savings or paying wedding debts. However you choose to do it, it is important to support each other and avoid digging the past. Lastly, if you’re not yet married and are planning on a wedding, the best advice we can give you is stay away from fad and avoid debts you think you cannot handle. Sit down with your partner, grab a calculator, a pen and paper and be realistic about it because starting life together with zero debt also pays off in your relationship. And like love, it feels good as well!