Monday, 17 February 2014

Saving for Marriage: My Plan

I mentioned at the start of this year that one of the things that I wanted to do this year was get engaged. The more I thought about this, the more I realised how much of both a life and financial decision it was.  Not only are the implications significant for the rest of my life - but also in the very near term.

The whole proposition is crazily expensive...

Weddings and the lead up to marriage is a ridiculously expensive process.  Ignoring the cost of the ring there is also the wedding itself, the honeymoon, an engagement party and who knows what else there is to come! Unfortunately so much of this is tradition and is expected - I am a little bit of a traditionalist in this sense so unfortunately I think I am up for a lot of these expenses. I made sure I had a plan

I foresaw a lot of these expenses when I was thinking about my budget for the year (and for next year as well).  Unfortunately neither my girlfriend or I come from families that are very well off so I can't imagine getting much financial support from either set of parents so we will be funding the wedding ourselves.  My girlfriend doesn't earn spectacularly well either so a large part of the financial responsibility for this event will be mine.

The only reason I disclose the above is so when you are thinking about planning a wedding / engagement yourself you really think about how you will fund it.  If you have parents who are willing to fund everything then you really have very little to worry about...but if you partner doesn't work or you are both on low incomes...perhaps you should start thinking about how you do it sooner rather than later.

How much am I budgeting for my wedding?

My weddings savings plan is basically in 2 parts:
  • Cash that I need to save for expenses this year; and
  • Cash that will be used in the future
In the first category will go the ring, the proposal itself and any engagement party.  I have set a hard budget on this cost - I will not be spending more than $10,000 on all of those three combined.  Any amount I spend on the actual proposal itself (i.e. going away for the weekend or whatever I decide to do) will come off this amount.

Given the proposal is very near term and you really need to pay for a ring a month in advance of the proposal (especially if you are getting it made rather than just buying one) I have an accelerated savings plan and budget to make sure I have enough saved up in time.  If you read my expenditure tracker post most of my 'other' expenditure is really savings for this.

The second category - i.e. longer term items like the wedding itself (including honeymoon) - will be a joint savings effort between myself and my girlfriend.  Although I will be contributing the bulk of this amount she will also be contributing.  I am budgeting for $50,000 all up - $30,000 for the wedding and $20,000 for the honeymoon.  I think I may be able to save a bit on the honeymoon but (and it seems crazy to me too) the amount I have budgeted for the wedding is not an extravagant amount at all.

I have already started saving for this component - saving $50,000 after I propose is just not a viable option.  Although I am not putting away much at the moment towards this part of the wedding (most is going to the first $10,000 mentioned above) I am still putting away enough that I don't need to sacrifice everything in the lead up to the wedding.

How to save enough for a wedding...

The next question becomes - how do you save this amount of cash?!  The answer is to have a plan written down and then track it diligently.  It should be the first thing you save into each month (regardless of where you put it).  This amount should be used for your wedding and for nothing else.

Decide how much you can save each month towards your wedding.  A simple way is to just save the same amount each month.  For example I am saving ~$2,500 each month towards the wedding (personally).  Of this amount:
  • $1,500 goes towards the ring / engagement - I will have enough after 7 months
  • During this time $1,000 a month will go towards the wedding and honeymoon.  After 7 months I will have $7,500 (the last $500 coming from the excess in the engagement fund) saved up
  • Assuming I have a 12 month engagement after this I will have another $30,000 for a total of $37,500 for your wedding and honeymoon
Remember that I needed $50,000 for the wedding and honeymoon - this is where my girlfriend comes in.  If she starts saving right after we get engaged then she will need to save $12,500 over 12 months (or $1,042 per month) which she should be able to afford.

If you don't have this kind of money to save for a wedding don't worry about it - just do what works for you.  Start saving early, have a longer engagement or preferably just have a smaller wedding and honeymoon and put more money towards your first home together.

The most important thing is to have a plan and to stick to it - whatever your income and requirements are.

As an aside I am not crazy enough to do this kind of planning and saving without being pretty sure my girlfriend would say yes.  Guys...have the discussion with your girlfriend way before you actually think about proposing - it will help you with both your nerves AND when thinking about how to afford all of this.

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  1. Have you thought about a destination wedding? That's what I did, ended up saving a lot more than a traditional wedding in Australia.

    Add to that, you're already overseas, so you don't need to fork out again for flights for a honeymoon!

    Admittedly though, getting married last year smashed my finances, but was such an amazing experience. Now I'm back to saving and investing in full force again!

    1. Hi Streetikonz!

      I briefly thought about it for all the reasons you mentioned however I simply have too much family in Australia. I know that is one reason to go but it would create far more headaches in the long run.

      I am a little worried about my finances getting smashed which is why I'm trying to do a long run savings plan. Will be relieved when I can allocate most of the money back to my 'real' savings and investment plan.