- The article discusses the changing attitudes towards weddings and the rising costs associated with them, urging couples to consider more affordable alternatives and avoid going into debt.
- It emphasizes the importance of open communication and compromise between partners when planning a wedding, as disagreements over spending values can lead to conflict and financial strain.
- The article suggests that financial advisors can play a crucial role during the engagement period by offering objective guidance and facilitating discussions about wedding planning and budgeting, ultimately setting couples on the path to long-term financial harmony.
How times have changed. 70 years ago, Marilyn Monroe sang “Diamonds are a Girl’s Best Friend.”
Good news for the frugally-aware: Today, there are alternatives and they’re getting less expensive.
The chart below shows the cost of man-made vs natural diamonds. In my humble opinion, most people shouldn’t overspend on shiny rocks. In fact, I’d argue the entire wedding ecosystem is far too extravagant for the average couple.
Many disagree and believe the “investment” in a wedding is representative of a family’s success and future prospects for the couple. Because of this association, many feel pressure to go into debt to organize weddings they otherwise couldn’t afford. And once the purse strings are opened, it’s so easy to get carried away with spending.
Starting a marriage saddled with $80k of consumer debt is a burden that will slow the couple’s wealth creation. This debt could take years to pay off and is an impediment to more productive forms of borrowing, such as a mortgage.
Worse, many couples divorce after just a couple years of marriage.
Engagement Period is an Opportunity to Set the Stage for Lifetime Wealth Creation
Marriage is both a romantic and economic union. It’s important that this is recognized early in the relationship. The engagement period is a litmus test for future financial strategies and divergences for the couple, and is an opportune time to establish a framework for success.
Family is important, but ultimately it’s the couple that must bear the responsibility of a wedding’s cost. The first step when planning a wedding is for both partners to determine, agree-upon and communicate what they want. Pressure from family to do anything beyond that should come with additional resources from the family (time and money).
Some couples might not get through this first step without significant conflict. If one partner wants an extravagant wedding (with all the associated costs) while the other wants something cheap and cheerful, serious introspection is required. If spending values are so far apart, can partners come to an amicable compromise? How do they work through the conflict without resentment? This is a serious test as many marriages fall apart for financial reasons.
This is the time to be honest and open.
Opportunity for Advisors to Extend Relationship Beyond the Parents
It is not often that practicality rules over romance during the engagement, so how is a couple to objectively review their needs and objectives? This is where a trusted and objective 3rd party can help facilitate the required discussion.
Note: “Objective” is key, as many wedding professionals have a vested interest in convincing a couple to spend as much as possible.
While many young couples don’t have a wealth advice relationship, an advisor might learn that the child of one of their clients is getting married. This is an opportune moment to offer a complementary hour of time to ask the right questions and facilitate the discussion around wedding planning and budgeting.
A simple discussion template could trigger a couple – and family – to consider the economics of life before and after the wedding. It is also an opportunity to get each participant to individually document their vision for the wedding and overall spending as a married couple.
The role an advisor serves at this moment is critical. Not necessarily because of the advice they provide, but because they are the catalyst for an examination and discussion that many couples forego until it’s too late. A couple hours of investment could set a couple on the path to long-term financial harmony.
Of course, at the same time the advisor strengthens their relationship with the family by extending across generations. Rather than an advisor only for the parents, this opens up the opportunity to become a trusted partner for the family. It also positions the advisor as a holistic wealth partner beyond tax, estate and investment planning.
Use an Engagement to Set the Stage for a Lifetime of Wealth Creation
The financial implications of planning a wedding should not be overlooked by couples embarking on their journey towards marriage. While family and societal pressures may push for extravagant celebrations, it is crucial for couples to engage in open and honest discussions about their financial goals and aspirations. The engagement period serves as a vital opportunity to assess not only the logistics of a wedding but also to establish a foundation for long-term financial harmony in their lives together.
Ultimately, managing the engagement period with financial prudence sets the stage for a more stable and secure future. By emphasizing the importance of financial compatibility and open communication, couples can lay the groundwork for a successful and fulfilling marriage, not solely built on fleeting extravagance but on a solid financial foundation that supports their long-term goals.