Lavish weddings on your mind? Wedding loans? Here are the pros and cons
Weddings are a luxury business.
You don’t have to have a giant one, but there are some couples out there who take a “spare no expense” approach to their special day and help bolster multibillion dollar industry. In the U.S. alone, it is estimated that the wedding industry has cost Americans $76 billion for 2019, according to market research firm IBISWorld.
Popular wedding publications like The Knot and Brides have released surveys that say the national average for getting hitched in 2018 was $33,931 and $44,000 – which are numbers that rival the stats reported for average student debt of that year. According to NerdWallet, the average U.S. household with student debt owes $47,671.
Despite the large price tag that come with lavish ceremonies and receptions, there are a few who are set on achieving a dream wedding – whether it be through an extended wedding weekend, over-the-top entertainment and services or customized details. This desire to go all out isn’t reserved for the rich either.
A Credit Karma survey earlier this year found 21 percent of Americans age 18 and up went into debt over their wedding. In those findings, a quarter borrowed $10,000 or more while 41 percent said they did so because they felt like they had no choice or have a large family and 32 percent said they wanted to impress their guests. The remaining 20 and 16 percent said they either wanted to look good on Instagram or “one-up someone else’s wedding.”
Likewise, online lenders have said they are issuing up to four times as many wedding loans as they did a year ago, according to a report in The Washington Post.
Prosper, Upstart and Earnest are three major financial institutions that are promoting wedding-specific loans with interest rates that can be as high as 30 percent. For individuals with good credit history, rates are much lower.
Mary Naklicki told Good Morning America that she took a $10,000 loan out for her daughter earlier this year to help cover costs. Her interest rate was between 10 and 12 percent, “which she considers cheaper than a credit card,” the report said. Naklicki told the news outlet she intends to pay it off in three years.
Regardless of whether you need a financial boost or are fortunate enough to have thousands of dollars on hand, here are a few considerations of the pros and cons that come with a swanky marriage.
The pros of a lavish wedding
No guest list limitations: The cost of catering is often said to be a contributing factor for whittling down a guest list. According to Wedding Wire, most couples spend between $1,800 and $7,000. However, if money is no object for you and your spouse, you can invite as many people you want for a big celebration. This way you won’t have to upset a third cousin twice removed over their missing invite.
Get what you want: If you’re the type of person that has a fear of missing out, spending a little more may help to ensure you get everything your heart desires for the momentous occasion. To prevent yourself or your partner from going overboard, wedding experts suggest making a list of your top must-have details. Wedding planning resource Bridechilla advocates using a project management method to achieve your goals.
Guest appreciation: Having funds to allocate for your guests’ enjoyment can go a long way in the appreciation department. This can include transportation for their convenience, smooth event execution that reduces wait times, quality entertainment at the reception and more, according to Martha Stewart Weddings.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The cons of a lavish wedding
Complicated planning: If you are planning a wedding without any outside help, hosting a large or extravagant event can cause a headache. Each vendor you bring on for the big day will require signing a contract – some of which may require negotiating and individual payment schedules. Gratuities are also generally expected and may or may not be included before the wedding. Additionally, having a large guest list comes with its own struggles like menu substitutions for allergies or special seating accommodation.
Post-purchase regret: Like any other big purchase, there is a possibility that you’ll regret parting with a large amount of cash. This is more apparent of course after the event is said and done and you’ve actually experienced what your vendors are capable of. According to a report from Brides, newlywed couples wish they spent less on flowers and décor, hair and makeup, catering, attire and invitations.
Chance of divorce: Economists Andrew Francis-Tan and Hugo Mialon conducted a study that examined wedding expenses and its correlation to overall relationship health. In their findings, spending more for the big day did not yield a more stable marriage. Specifically, couples that spent $20,000 or more were said to be at a greater risk of divorce on average. The study suggested debt-related stress as a contributor.
In its own words: “Weddings associated with lower likelihood of divorce are those that are relatively inexpensive but are high in attendance.”