“I was the one who came runnin' when you were lonely
I haven't lived one day not lovin' you only" — from “Wedding
Weddings aren’t what they used to be. They’re far more expensive.
The average American wedding now costs just under $31,000, only slightly more than the total of the average amount of student loan debt. And this does not include the cost of a honeymoon. Interestingly, according to a recent survey by Emory University, couples who fork out more than $20,000 in wedding costs are 46 percent more likely to get divorced than their peers who didn’t pay that kind of dough to get hitched.
The wedding is usually the first major financial event of a marriage. Couples who spend lavishly on a wedding ceremony and reception, on expensive rings, and on costly honeymoons, can sometimes deprive themselves of the benefits of more lasting financial investments. The same $30,000 that was spent on the wedding might have been utilized as a down payment on a house, or provided a jump start on a retirement account. Worse, couples who incur exorbitant wedding expenses and who put at least some of these costs on credit cards are beginning their union behind the financial eight ball.
It’s an easy mistake to make. But it can be financially devastating. Marital finances are almost always most vulnerable in the early years of the union, for many reasons.
Younger couples usually bring fewer assets to a financial union. It takes time to build a significant investment and or/savings account. Younger newlyweds normally are beginning their lives with less annual income. Many are just entering their career field. And, to further complicate matters, many young newlyweds are managing their own finances for the first time.
Older couples who marry, some of whom have been married before, are usually farther along in the earnings game and oftentimes bring more substantial assets to the marriage. They’ve usually held several jobs, and most have been managing family finances for some time. So they have the advantage of experience. But of course, they frequently started out as young newlyweds once themselves, unless theirs is a first marriage enacted later in life.
Now, this is no indictment of upscale weddings. Many are paid for by loving and well-meaning parents and do not cost the newlyweds a dime. And goodness knows the $50 billion wedding industry is a large part of popular American culture. Most wedding planning firms are small businesses, which represent the backbone of the American economy.
But combined with the trend for higher student loan debt, accumulating large wedding costs or more debt to start a marriage can often represent a step in the wrong direction.
Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.