Sacrificing a Hobby to Save Money



Image credit: rocket400 / 123RF Stock Photo

 

One of the things I love most about Mr. W is that he has a variety of talents and hobbies.  When he was twelve, he helped his father build a two-story addition on their house.  While he can wield a hammer, he’s also a whiz in the kitchen and can whip up a three-course meal in no time.  He’s obsessed with CrossFit, but he’s also a skilled swing dancer.  You get the idea.  All in all, he’s a pretty well-rounded guy. 

 

When we were in graduate school, Mr. W suggested that we take ballroom dance lessons together.  After hearing him mention this several times, I contacted a nearby ballroom dance franchise to inquire about the cost.  I had sticker shock: the cost for a set of beginner lessons was about $750.  That was a lot of money, especially considering our financial circumstances at the time.  We were both graduate assistants, which meant that we received tuition remission and living stipends of $12,000-$15,000 per year.  Our assistantships paid enough for us to get by, but we did not have much left over.  However, I had been babysitting and coaching to earn some money on the side and had built up a nice little nest egg.  I could sign us up for the beginner series and still have a good amount in savings.  I decided to surprise Mr. W with dance lessons for Christmas.  We aren’t usually this extravagant with gifts, so this was a special treat.  For the next few months, we had a blast learning to foxtrot, swing, waltz, rumba and tango.  We loved having a hobby that we both enjoyed and could do together.    Neither of us would have fared well on Dancing With the Stars, but we had made significant progress. 

The end of our dance lessons coincided with the end of graduate school.  For the next few years, we only danced once or twice a year, at weddings or other social functions.  We thoroughly enjoyed dancing, but the cost prohibited us from taking any more lessons at that time.   

Last summer, we signed up for another series of dance lessons.   The cost was significantly higher than the beginner lessons (and I’m serious when I say “significantly”).  However, we had become much more financially stable since our graduate student days.  The timing was also perfect: by resuming our lessons in the summer, we were able to brush up on our dance skills before our wedding.  Our lessons provided an outlet from wedding-related stresses.  Dance was an instant pick-me-up regardless of what else was on our mind(s).  We spaced out our lessons so that we were able to continue dancing for a few months after the wedding.  We both thought it was important to have a hobby we could do together, especially in our earliest days as a married couple. 

When we finished our most recent set of lessons, Mr. W and I had a heart-to-heart discussion about continuing dance.  There was no question that we loved it and looked forward to each lesson.  However, we just couldn’t reconcile the high cost with our big-picture goals.  In the next few years, these plans include buying a house and starting a family.   We estimate that we should save about 25% of our take-home income on an annual basis to be able to achieve our big-picture goals.  We’ve set up our household budget so that we are saving at this 25% level.  If we were to continue taking dance lessons, it would cost us several thousand dollars annually, which we have not included in our budget.  Yes, we could trim several thousand from our budget to make room for dance lessons.  However, it would require us to drastically reduce our budget in areas like travel (ie, trips to see my family) and fitness, both of which are important priorities to us. 

We made the decision not to continue dance lessons until some point in the very distant future.  The good thing about ballroom dance is that it’s an activity that we can do at any age.  As long as we are both mobile, there is no expiration date.  In fact, most of the students at our former dance studio were retirees or empty-nesters.  By contrast, our other priorities are much more time-sensitive.  Our budget and our spending should reflect this distinction.  If we want to achieve our big-picture goals in the foreseeable future, we need to sacrifice or delay certain hobbies.    

We attended a wedding last weekend, and were reminded of how much we love to dance.  I had a few brief twinges of regret that we had stopped our ballroom lessons.  I was even tempted to suggest that we reconsider our decision.  But I remembered a theme that resounds throughout personal finance: With careful planning, you might be able to have it all.  But, you can’t have it all right now. 

Have you sacrificed or delayed a hobby in order to save money?  What goals do you prioritize in your budget?

Sometimes, You Get What You (Don't) Pay For

Mr. W’s younger brother, K, has a knack for acquiring free stuff.  He’s a world-class schmoozer so everyone loves him.  As a result, whenever people have free stuff they’re looking to give away (sports tickets, fancy clothes, TVs, you name it), he’s the first person they contact.  I’m pretty certain someone even gave him a free boat, though I could be wrong about that one.   

We’ve been lucky enough to benefit from some of K’s charisma and resourcefulness.  Each year, when K returns from college, he collects an assortment of unwanted things that his roommates would otherwise throw out.  Last year, he gave us a window-unit air conditioner.  Apparently, some roommate thought it would be too much of a “hassle” to take the air conditioner with him when he moved out.  We had been planning to buy an A/C for our living room, so K’s freeloading saved us $150-$200.  Thanks, K, for keeping our living room cool and comfy! 

 

This summer, we decided it was finally time to buy an air conditioner for our kitchen.  We’d tried to resist getting another air conditioner.  We already have three window units, which seems like a lot for a four-room apartment.  But we just couldn’t stand the temperature in the kitchen.  On a mild summer day, it averages 86 degrees.  On a brutally hot day, such as those we’ve been having recently, the kitchen temperature creeps closer to 95, even if we make an effort not to use any heat-generating appliances.  

We were having dinner with Mr. W’s parents and they mentioned that K had brought home yet another free air conditioner from school.  K wasn’t planning to use it since he already had one.  K wasn’t home at the time, but Mr. W’s parents offered it to us.  It would save us another $150-$200.  Awesome, right?  Everyone loves free stuff. 

At 8:30 PM on a Sunday evening, we trekked home with the air conditioner and started the long process of installing it in our kitchen window.  Having lived in 1920s houses his entire life, Mr. W is a pro at installing window-unit air conditioners.  He installs at least half a dozen every summer.  Let’s just say that installing this particular A/C was quite an ordeal. 

For starters, our kitchen window looks like this:

 

 

Yep, it’s a really small window.  And it’s about 8 feet above the ground.  It’s also usually blocked by a 4’ x 3’ kitchen island, which currently holds our wedding registry gifts (not pictured, above).  All 19,000 pounds of them.  Here is how our evening progressed:

8:30-9:00 PM: Move all items off of kitchen island.  Move kitchen table to make room for kitchen island.  Move kitchen island to allow access to window.  Start to feel anxious about all the miscellaneous appliances that are now scattered around our apartment.  (Okay, this was just me.  Mr. W does not have issues with clutter)

9:00-9:15 PM: Discover that window is too small to install A/C without removing the bottom window pane.  Remove bottom window pane.  Balance precariously on kitchen chair, while lifting air conditioner into window.  Discover that there is now a slight gap between top of window and top of air conditioner.  Thus, there is no way to secure the A/C in the window. Decide to try wedging some planks between the window and A/C to eliminate the gap. 

9:15-9:45 PM: Mr. W drives to his parents’ house to pick up planks. 

9:45-10:15 PM: Once again, balance precariously on kitchen chair while lifting A/C into window.  Successfully wedge planks between window and A/C.  Unit now fits securely in window.  Mr. W tries to use screwdriver to screw A/C in place. We’ve manually screwed in every other A/C in our apartment, but it’s just not working in this case. 

10:15-10:40 PM: Mr. W drives to parents’ house to pick up his power drill.  In the meantime, I’m standing on the chair, holding the A/C in place above my head (keep in mind, it’s over 90 degrees during this entire ordeal) 

10:40-11:00 PM: Mr. W returns with the drill and screws the A/C into the window pane.  We plug the A/C into the outlet.  With bated breath, we press the “ON” button.  The A/C turns on for one enticing second, then switches off again.  We tried resetting the outlet, and still the same thing happens.

11:00-11:30 PM: We wonder if there could be something wrong with the outlet.  Perhaps the A/C voltage is too high for that particular outlet?  Mr. W does some Googling but his research is inconclusive.  We decide to try plugging the A/C into another outlet.  The A/C cord isn’t long enough to reach another outlet, so we disconnect the extension cord from another appliance.  We plug the A/C into an outlet we use daily.  Still nothing. 

 

At this point, we were done troubleshooting.  We were both tired, cranky, and dripping sweat.  I was still feeling anxious about the fact that there was a KitchenAid stand mixer on our guest bed (We weren’t inviting anyone over.  What was the big deal?)  Our kitchen island was where the kitchen table usually went.  Our kitchen table was blocking the front door.  We moved those back into place so we could leave for work in the morning.   We left the A/C in the window, figuring we’d ask K if he knew why it wasn’t working. 

The next day, Mr. W called his brother K.  He explained our difficulty and asked K if he had ever used the free air conditioner.  After a long pause, K said, “Oh man…I don’t think that A/C will work.   It was sitting outside in the rain for three days.” 

 

Oh boy.  I’m not sure why that A/C was sitting in the rain for three days (???!).  And none of this is K’s fault.  We just appreciate his generosity.  He hadn’t been home when Mr. W’s parents offered us the A/C, or else he would have warned us accordingly.   But Mr. W and I both felt like schmucks for not testing the A/C before going through the trouble of installing it in our kitchen window. 

The very same day, we went to Home Depot and spent $170 on a new air conditioner.  After removing the free inoperable A/C, installing the new one was much easier.  As far as we’re concerned, it was the best $170 we’d ever spent. 

Moral of the story: if you accept something free, confirm that it works before you waste a lot of time or effort.   

Have you ever received something free that turned out to be too good to be true?

When to Offer Unsolicited Advice



Image credit: iqoncept / 123RF Stock Photo

 

A close family member (let’s call him “B”) mentioned that he recently opened a new credit card through his bank.  He already had a Discover card, but thought that he should have something more widely accepted as some retailers do not take Discover.  This approach seemed logical, until B said this: “The bank gave me a $7,500 credit line.  And, there is a promotional 0% APR for the first 12 months.”  He seemed excited by the high credit line and the promotional interest-free period, but I was concerned.  This family member is very bright.  In most situations, he’s practical and has plenty of common sense. However, I worry that he may be setting a dangerous financial precedent if he starts to rely on credit.  Here are some background details that cause me to worry:

*B and his wife are 24-year old newlyweds.  He financed the engagement ring.   According to the jeweler’s website, loans are interest-free if paid in full within 12 months.  If the loan is not paid in full within 12 months, interest accrues from the purchase date at an APR of 29.99% (oh boy...)  I don't know whether he paid off the loan within 12 months, but I sincerely hope he did.  That’s a super high interest rate.  The ring is quite lovely, by the way.  But I just don’t think it’s a good idea to buy a ring unless you can afford to pay for it in cash. 

*B and his wife just finished Master’s degrees.  While in graduate school, they both had part-time positions as graduate assistants/researchers, but never held full-time jobs.   I estimate that B and his wife each earned $15,000-$18,000 a year as researchers.   Given these modest incomes...

*I don’t believe B has much in savings.  I could be wrong, but I doubt he would have financed the engagement ring if he’d had the cash to spend. 

*B will start medical school in a few weeks.  Over the next four years, he will take out six figures in loans.   

*B’s wife is currently seeking employment (until recently, he had been deciding between a few medical schools.  The medical schools were in different locations, and B’s wife waited to apply for jobs until he had decided on a medical school)

*A $7,500 credit line?!!!  Someone can get themselves into a lot of trouble with a $7,500 credit line, especially if he/she does not have a source of income. 

 

I have an uneasy feeling that B and his wife may get in over their heads with this new credit card.  I inwardly cringed during this conversation because I would hate to see B and his wife make a financial mistake that could haunt them for years.  Perhaps I am being paranoid and should give them more credit (bad pun, I know).  They’re adults and are capable of making their own decisions.  When B told me about the new credit card, I decided not to offer him any advice.  We were in a social setting with his parents and I didn’t think it was an appropriate moment to climb onto my soap box.  I had to resist the urge to tell B what I really thought: 1) Credit cards should be used as if they are debit cards; only make the purchase if you could afford to buy it in cash, 2) Pay off that balance in full, every month, even if there is an interest-free period.  It’s not as though you could leverage credit to your benefit in this scenario, so you’re better off paying your bills, and 3) a $7,500 credit line for an unemployed person seems like predatory lending on the part of the bank.  Be very, very careful whenever you use that credit.  The bank is counting on you NOT being able to pay your balance after 12 months, at which point they’ll slam you with a very high interest rate.

I wanted to say all those things.  Really, I did.  But I thought this might sound too preachy and judgmental.  B was simply making conversation.  He hadn’t asked my opinion, so I didn’t feel it was my place to offer advice, especially with his parents standing nearby.  Instead, I said, “Wow -- $7,500?  That’s higher than my credit line!”  I am hoping that my comment will put his high credit line in perspective.  His parents are both financially savvy, so I imagine that they taught him about credit cards when he was younger.  If not, I’m hoping they will warn him after hearing this worrisome conversation.

 

So, friends, here’s my question: Have you ever offered unsolicited financial advice to a friend or family member?  If so, how was it received?  Do you think I should have said something more forceful in this situation?                

Mortgage Affordability: What the Lenders Tell You vs. What You Should Really Spend

For the past few weekends, Mr. W and I have attended a handful of open houses in our favorite neighborhoods.  Although we’re still a few years away from buying a house, we thought it would be useful to see what types of homes are currently available in our theoretical price range.  We already peruse Realtor.com on a frequent basis, but seeing each home in person gave us a much better sense of the condition of the house, the size of the yard, and the desirability/undesirability of each location.

Before we ventured out to these open houses, we wanted to determine a reasonable price range.  We knew there would be no point in attending open houses for homes that were two or three times higher than our potential budget.  Looking at over-budget homes would simply set us up to be disappointed and discouraged when we finally are ready to buy our first place (this is the same logic I used when I decided not to try on $5,000-$10,000 wedding gowns when planning our wedding.  I didn’t want to get my heart set on something I couldn’t have).  Granted, this was a hypothetical exercise at best.  Over the next few years, our financial situation could change for the better – or for the worse.  It’s impossible to know precisely how much house we’ll be able to comfortably afford in three or four years’ time.  But, we can still do our best to come up with a good estimate.

We had used a few online mortgage affordability calculators, and we were always surprised by the results.  According to these calculators, Mr. W and I could qualify for a mortgage that would result in a payment at least three times higher than our current monthly rent.  Admittedly, we’ve stayed in a low-rent apartment in order to balance out our high commuting costs and to help us save for a down payment.  We could pay a bit more for rent without feeling that we were stretched too thin.  Nonetheless, we can’t imagine having a monthly obligation that is three times what we currently pay. 

 

In case you haven’t played around with these mortgage calculators, here are a few of the more common guidelines…and the reasons we decided not to use them

Guideline One: Total monthly debt obligations should be no more than 36% of combined gross income.  The housing portion should be between 28% (conservative) to 33% (aggressive). 

Result: According to this calculation, we could afford a monthly payment that is 3-3.5 times our current rent payment.   The loan amount would be almost 4 times our combined gross income.  Despite what the guidelines say, that’s far more than we would be comfortable spending.

Things We Like About This Method: This calculation considers total monthly PITI payment (Principle, Interest, Taxes, and Insurance).  This “big picture” approach is important to us because New Jersey has notoriously high property taxes.  Case in point: On Realtor.com, we recently saw a $425,000 home with annual property taxes of $15,000.   $15,000?!  That’s the same price we paid for Mr. W’s 2 late model Honda.  This was a 2,000 square foot home that sat on .25 acres.  It was a truly lovely home but it was by no means a mansion.  Admittedly, the taxes on this home were a bit higher than average for the size of the house/lot, but we are still anticipate paying $8,000-$10,000 in annual property taxes.    

Things We Don’t Like About This Method: This method does not account for variations in take-home income.  Individuals with the same gross income can have radically different take-home incomes depending on the state income tax rates, health care costs, and retirement withholdings.  Thus, we’re not convinced that using gross income is a good starting point when calculating mortgage affordability.    

 

Guideline Two: Take out a mortgage that is no more than 2 to 2.5 times your gross annual income. 

Result:  Assuming 4.5% interest rate, 30-year mortgage, a 20% down payment, and the same tax rate as above, we would be paying 1.8 – 2.2 times our current rent. 

Things We Like About This Method: This calculation results in a more conservative estimate than the 28/36 rule. We would probably want to scale back our other monthly expenses, but we wouldn’t feel as cash strapped as if we were to follow the 28/36 rule.    

Things We Don’t Like About This Method:  This equation only calculates the size of a loan that we can theoretically afford.  It does not include the “TI” of “PITI””: homeowner’s insurance or taxes, which can vary widely by region.  In addition, this method does not take interest rates into consideration.  I would never advocate taking out a larger loan simply because interest rates are favorable. However, if interest rates were to rise to more typical levels (say, 5.75-6.25%), our mortgage payment could be several hundred dollars more than it would be at the current rates.  

 

We decided that both of these guidelines can be helpful starting points for calculating home affordability, but they should be not be used in a vacuum.  There are several other factors that influence home affordability, none of which are reflected in the two guidelines above:

 

Other financial goals/obligations: Depending on your/your family’s circumstances, you may have other financial goals or obligations such as childcare, college savings, or elder care.  We don’t yet have kids and our parents are in good health, so these expenses might not be an immediate priority when we first buy a home.  However, we want to be certain that buying a home does not preclude our other goals.  If we were to spend 28-33% of our gross income on housing, I think we would feel as though we weren’t saving enough for the future.  We would feel like we were living paycheck to paycheck, especially once we start a family.  That’s not a good feeling, especially when you’ve just committed to a long-term expense. 

Income Structure: Mr. W and I are both employed in full-time salaried positions.  Our income structure is straightforward: we do not receive bonuses or commissions, and we have very little side income.  However, we both work in relatively niche industries, so we do not think of our jobs as particularly stable.  If our employment situations were to change, it may take some time for us to find new positions and the new positions might be at a lower income level.  For this reason, we want to be conservative when calculating how much home we can comfortably afford.  If we had variable income streams, we would be more conservative when calculating home affordability, so that we would not be left scrambling in those months when the income stream comes to a trickle.  Finally, if we were a single-income family, we would be even more conservative than we are currently.  In that scenario, we would want to keep our monthly obligations even lower to allow us to build and maintain a larger emergency fund. 

Home Maintenance/Repairs/Utilities: Mr. W and I will most likely purchase a home that is 70-100 years old.  Given the age of our hypothetical home, it is bound to require more repairs –and costlier repairs – than a brand new home.  In addition, there is a chance that the home will be heated with oil, which is substantially more expensive than natural gas.  We will need to take utility and repair costs into account when calculating how much home we can afford.   

In the end, we used our own calculation to determine how much home we could comfortably afford.  We would feel most comfortable knowing that we can pay our mortgage and necessary expenses on the lower of our two take-home incomes.  We estimate that, if absolutely necessary, we could live on $600-750/month for our non-discretionary, non-mortgage expenses (groceries, utilities, gas, car insurance).  We did not include our car payment, as we plan to pay that off before buying a home.  Living on $600-750/month would not be an ideal scenario: we would be eating lots of ramen noodles.  However, we could make it work if necessary.  Thus, we used the following “back-of-the-envelope” calculation:

Maximum monthly mortgage payment (PITI) = lower monthly take-home income - $750

 

If we already had kids, we wouldn’t cut it as close as we did in this calculation.  We would build in some extra cushion when figuring out our non-discretionary monthly expenses.  In addition, our expenses would be much higher than $750 because we would need to pay for childcare, diapers, etc.  But for the time being, we think this is a good approach.  As with the above scenarios, we assumed 4.5% interest, a 30-year mortgage, and 20% down payment.  We also assumed $8,000/year for property taxes and $1500/year for home insurance.  The calculation resulted in a loan amount of approximately 1.66 times our combined gross income.  The mortgage payment would be 1.66 times our current rent .

 

The first mortgage guideline (28/36 housing/debt ratios) tells us that we can afford a home like this:

3 bedroom, 2 bath home on nearly half an acre.  Approx 1700 sq. ft. 
Built in the 18th century

 

This home would be perfect.  Really, it could be my forever home - historic, old, lots of character, beautiful lot, in the same neighborhood where Mr. W grew up.  With the exception of those oddly pruned shrubs, I love it.  The 28/36 ratio essentially tells us that we can buy our dream home within the next few years.  No way; we're not buying that.  This is a home that we could maybe purchase in the next 10-15 years.  Obviously, we haven't gone to any open houses for homes in this price range.

The second mortgage guideline (borrow up to 2.5 times your gross income) tells us that we can afford something like this:

4 bedroom, 2 bath home on .1 acres.  Approx 1900 sq. ft. 
Has a den, family room, and formal dining room. 

 

This is also a lovely home that we could grow into.  The interior needs a little bit of work, but it has plenty of space and a good layout.  It's in Mr. W's neighborhood, and I suspect that the price would be higher if the yard were larger.  But again, this is more house than we could comfortably afford at our current income level.  We haven't gone to any open houses for homes in this price range, either.

 

In the end, we determined that in a few years, we may be in the market for a home that looks something like this:

2 bedroom, 1 bath home on .1 acre. 950 square feet.
Has an office, but no dining room or family room

 

It's cute and charming, right?  This is definitely a teeny-tiny starter home, and it would be a tight squeeze if we were to have more than one child.  As you can see from the edge of the picture, the neighbors are quite close.  However, it's in our target neighborhood and it's a home that would not prevent us from achieving our other financial goals. 

There is a noticeable difference between the kinds of homes we feel we can comfortably afford and the homes that the guidelines say we can "afford."  What’s the reason for the disparity?  Quite simply, mortgage lenders are willing to lend as much money as a borrower can repay.  The more we borrow, the more they earn from us in interest.  Lenders aren’t interested in ensuring that we can meet our other financial goals or obligations.  They don’t care whether we can save for our kids’ college tuition, or plan for retirement, or care for aging parents.  And it’s not really their responsibility to care about those things, either; lenders are in the mortgage business to turn a profit.  However, we have to remind ourselves to run the numbers ourselves, independent of the guidelines provided by the mortgage industry.  It’s essential that we evaluate how a mortgage will fit into our big picture goals to ensure that we do not overextend ourselves financially. 

How Much Should You Spend on Your Wedding?

It’s wedding season, folks!  With the onset of summer, the wedding bells have started to ring.  Over the next four weeks, my husband and I will be attending a wedding or wedding-related event on every weekend.  I imagine I’ll shed many happy tears, sip multiple glasses of champagne, and hear every rendition of “Canon in D.” And, I’m hoping we get to dance to “Gangnam Style” a few times, as well.   

As I look forward to these weddings, I also think back to our own wedding last fall.  When Mr. W. and I started planning our nuptials, we already had the basics figured out.  We knew we wanted to be married in his childhood parish, and we knew that we wanted a September or October wedding date.  The big question was “How much should we spend on this shindig?”  It wasn’t an easy question to answer.  (See what Tina, Jordann and Michelle have to say about the subject).  We had heard the statistics and they were a bit daunting.  We knew that the national average in the U.S. was reported to be $27,000-$29,000*.  We also knew that the average where we lived, Northern New Jersey, was significantly higher (check out that graphic below). 

Infographic source: http://blog.theknot.com/2013/03/11/25-most-expensive-places-to-marry/

 
These statistics weren’t especially helpful in determining how much we should spend on our own wedding.  I wish there were some formula that said, “a wedding should cost x% of the couple’s combined salary.”  But the equation wouldn’t be that simple.  There are too many other factors to consider.  Weddings – and wedding budgets – will never be a one-size-fits-all kind of thing.  It doesn’t matter what everyone else spends because the only ones getting married on your wedding day are you and your spouse-to-be.    

 

For us, there were several questions that we considered when determining our wedding budget

1.       How much can we afford? This was the primary question.  We never considered going into debt or depleting our savings accounts for the wedding.  This was a non-negotiable decision for each of us.  Before we were engaged, Mr. W. and I had a good sense of each other’s financial positions.  We knew each other’s salaries and had a rough idea – within $1,000 – of how much the other person had in his/her bank accounts.  When we started planning the wedding, we had more detailed discussions regarding our combined assets as well as our regular monthly expenses.  This helped us to create a very accurate projection of how much we could comfortably afford to spend on our wedding.    

 

2.       What are our other financial goals?  When it comes to finances, Mr. W. and I are both risk averse.  We want to have a sizable nest egg at all times in case of emergencies or job loss.  When planning our wedding budget, we asked, “How much do we want to have left in our savings account(s) after we’ve paid for our wedding and honeymoon?”  We decided that $10,000-$12,000 was a reasonable amount (after getting married, we have since increased this to $25,000-$30,000).  In addition, we were planning to buy a car for Mr. W.  He had been driving an 18-year old vehicle that was rapidly becoming unfit for the road.  We would need to save enough to pay for the down payment on the car, again without diminishing the nest egg.  Finally, we knew that our 4-5 year goals included purchasing a modest starter home.   Given the high cost of housing in our area, we will need to save aggressively and consistently before owning a home can become a reality.  We agreed on a wedding budget that would not hinder or delay these other financial goals.      

 

3.       Will others be contributing to our wedding?  Both of our families were quite generous and provided significant monetary contributions towards our wedding.  Mr. W and I were extremely grateful and rather humbled by their generosity.  We almost felt guilty for accepting the money.  After all, we were grown adults.  Shouldn’t we pay for our own wedding?  Wasn’t this our responsibility as two individuals who had decided to start a life together?  Yes, we should be able to pay for our wedding.  And we were.  If our parents hadn’t contributed a single dime to our wedding, we still would have been able to foot the bill.  We may have trimmed the guest list, selected a less expensive venue, or delayed our honeymoon if we hadn’t had the additional financial support.  However, it was very important to our parents to contribute to our wedding, and something that they had planned for years.   Because we did not cover the entire cost ourselves, we were able to spend more on our wedding without compromising our other financial goals.  That’s not to say that we spent wastefully or carelessly after receiving money from our parents.  If anything, I think we were more careful with our wedding budget because our parents had contributed.  We would have been devastated if they felt that we had wasted their hard-earned money.    

 

4.       What aspects of the wedding are most important to us and our family? Our primary goal on our wedding day, of course, was to finish the day as a married couple.  Other than that, we wanted our friends and family to enjoy the affair as much as possible.  Given that our families had been so generous, we felt it was important to honor their preferences and our respective cultural traditions.  In Mr. W’s family, love and gratitude are demonstrated through hospitality.  For our wedding, this meant that we wanted to offer our guests an abundance of food and drink to thank them for celebrating with us.  In my mother’s culture, the bride wears a white dress during the ceremony and changes into a red silk dress for the reception.  The red dress is often more elaborate than the white dress.  To honor my mother’s culture, I had a red dress custom-made from fabric that my grandmother purchased for me years ago.  I also had a second pair of shoes and a second set of accessories to coordinate with my red dress.  In addition, Mr. W. and I wanted our wedding to be as stress-free as possible for us, our bridal party, and our guests.  We chose a reception venue that was also a hotel, so that it would be convenient for our out-of-town guests.  Our venue was pricier than some of the other options we had considered, but our guests loved that they could simply walk to their rooms once the reception had ended.  There was no need for our guests to brave the hostile New Jersey driving conditions in the wee hours of the morning.  None of these expenses – food/drink, red dress, or fancy venue – were strictly mandatory.  However, they were important priorities to us so we created a budget that would allow us to accommodate these desires.

Once we had answered these four questions, it was much easier to determine an appropriate wedding budget.  To be completely honest, we spent a hefty sum on our wedding.  There is no sugar coating it: we had an expensive wedding.  And you know what?  We don’t regret it, or feel guilty, or worry that we squandered our money.  As I’ve said before, I believe that life is worth celebrating.  I would not be exaggerating to say that our wedding day was the happiest, most memorable day of my life thus far.  I don’t want to speak for Mr. W, but I imagine he feels the same.  It was the one and only occasion when all of our loved ones were in the same place, at the same time.  And they were all there because they wanted to support us as we started our life together.  That’s an extraordinary, remarkable feeling.  I imagine our wedding day will maintain this title of “best day yet” until the time when Mr. W. and I have our first child (assuming that’s in the cards for us).   

So, how much should you spend on your wedding?  As with most tough questions, there is no single “right” answer.  Having the wedding of your dreams may leave you with a priceless feeling.  However, your bank account(s) will be keenly aware of just how much the wedding truly cost.  Each couple will have to do what is right for them.  In my opinion, a couple should feel free to spend enough to truly celebrate the occasion in whatever manner they deem appropriate.  But – and this is a big “but” – I don’t think that anyone should go into debt for a wedding or spend more than they can comfortably afford.  A wedding is often the first major joint expense that a couple incurs, and I don’t think it would be wise to set a precedent for living beyond your means.  It’s simply not worth the financial insecurity. 

 
Friends, what are your thoughts on wedding budgets?  If you are married or engaged, how did you and your spouse determine how much to spend?

*Will Oremus of Slate.com argues that the reported average wedding cost may be misleading because of selection bias.  In addition, Mr. Oremus discovered that the median wedding cost in 2012 was $18,000 – more than a third lower than the reported average.  The median, rather than the average, more accurately represents actual wedding costs because it excludes the statistical outliers which would skew the average.