Applying financial wisdom under increasing social pressures: guide for engaged couples.
When I first looked at the figures I could not believe my eyes.
Based on the survey released by TheKnot.com, average wedding cost in 2012 was $28,827.
My first thought was, I have never spent that amount of money on anything! With exception of my mortgage of course. My second thought was, 28,000 in one day! That can’t be true. My third thought was, why not rather put that money towards a down payment on a home or towards paying down debt, student loans or simply saving it?
It seems that even in these uncertain economic times, where jobs are not easy to find, debt is rampant and saving even for basic short term emergencies is not common, couples still choose to spend enormous amount of money on their BIG DAY. I can’t help but think that social pressures have a lot to do with it. Unfortunately quite too often there are more pressures created around spending money and not enough social pressure exists to help young couples start their union on a strong financial foundation. What if there was a way to have the best time of your life on your wedding day while at the same time giving yourself the best opportunity to start your life together on the right financial footing?
Before my wedding day my mom gave me great advice. She said, “Don’t focus on one day, focus on a lifetime!” Here are few words of wisdom for couples that are planning to tie the knot in the near future. These wise proverbs will hopefully get you thinking beyond your BIG DAY and help you focus on your lifetime.
“The borrower is slave to the lender”
If you are getting a nice sum of money from family members towards your wedding, consider scaling down your wedding cost and use portion of those funds to pay down your debt.
Here is how you should prioritize your debt repayment:
– Student loans. These will not, in most cases, be written off, even through bankruptcy.
– Consumer debt (store cards / credit cards)
– Auto loans. Once you pay your loan off, keep driving your cars and make those payments to yourself.
“Failure to plan is planning to fail”
Don’t buy more home than you can afford. Dreams of your perfect, white picket fenced home can cloud wisdom around home buying. Watching friends purchase beautiful (often outside of their budget) homes can create pressure to keep up. Here are few important items to discuss around home ownership:
– Renting or buying? Which one is better for you? There are great online calculators to help you consider pros and cons of both.
– If you decide to purchase a home, understand all of the costs involved: utilities, upkeep, HOA dues etc. Make a detailed budget with all of those fixed and variable cost included.
– Consider one income rule as you shop for your first home. If you are a two-income family, could you afford to keep your home even if one of you lost your job?
“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.”
Last but not least, establish a habit of saving, which means spend less than you make on consistent basis and save the reminder, however small it may be.
Young couples face constant financial pressure. Decisions are often made without guidance or full understanding. The good news is that there is plenty of practical wisdom for anyone who is willing to listen. Solid financial advice, which if applied, will provide every young couple with a string financial foundation upon which they can build and thrive.