Building a Wedding Fund Without Borrowing Money
And just when you thought your current expenses were already staggering, the wedding comes along.
Don’t fret though. Firstly, there are plenty of ways to have a stunning wedding without breaking the bank. Secondly, you are not doing this alone. This is also your fiancé’s exciting challenge. Lastly, I’m here to help you wrap your head around this subject and be the most helpful and wisest fiancée that you can be.
To get the most out of this 4-part blog series about Weddings and Money, read this introduction first.
To begin this series, I’ll let you in on some talking points that will definitely help you build a wedding fund without borrowing money.
1. Talk about your spending habits.
This topic was perhaps off limits when you and your fiancé were still dating. The engagement period is a great time to understand how exactly you spend your money individually.
Why? Well let me ask you, when else will you talk about it? When you’re already married? You wouldn’t want surprises in this area.
It’s important to ask each other, “How do you spend your money?”
The way we spend is linked to ingrained habits. Because of this, I doubt that you or he will immediately change the way you spend after saying “I do.” And if you find anything amiss with your or your partner’s spending habits, I suggest consulting your mentors and a financial planner as to how to move forward. As nerve-racking as it can be, you need to talk about this.
My Wiser Weddings: Personal Finance Worksheet that you can sign up here will help you both map your spending. This is fairly easy if you’ve been using a budget tracker. If you haven’t, it’s a little more work, but it’ll be worth it.
Talking about your financial situations openly with your fiancé will help build trust in your relationship.
2. Talk about where you are financially.
You’d want to go into further details about your financial standing. Take this time to put everything on the table. Here are questions you should be asking each other:
Do you have any debt?
Debt brings anxiety to our lives! You both wouldn’t want to be surprised after the wedding day by a news that your budget for your honeymoon will need to go to paying an undeclared debt.
David Ramsey in this blog says it this way, “What you need to know is, ‘He’s got $42,321 in debt between student loans and credit card debt. He cut up the cards and started paying off debt before we ever met, and he’s got a plan to be debt-free in 22 months.’ Those are the details you need.”
I completely agree.
Debts include credit card balances, loans, and payments still owed on assets like house and cars. I’ll break this down in my Wiser Weddings: Personal Finance Worksheet.
While it’s not the reality for everyone, being debtless upon entering marriage is one of the wisest situations to be in. Thus, if you still have the time and resources to clear off debts before your wedding day, do so! Your future selves will thank you, believe me.
2. How much do you earn?
I’d like to start with the debt first so the bad news is over (if any). Moving forward, the next thing you’d like to ask each other is how much you individually earn. What each of you are earning will eventually be both yours (like how any debt will be both yours).
This is where you can be looking to see if none of you have saved up anything for the wedding before you were engaged (which is the case for most couples!). Talk about your net income because gross can be deceiving. That's not what you or he will be taking home.
3. What assets do you have?
Again, this may come off as being sneaky and nosy only if you don’t really embrace the concept of financial intimacy in marriage. Identifying all your assets helps both of you understand if you have enough liquid assets to pay the wedding.
These assets include money in the bank (or savings), investments, house, cars, jewelry, among others. Again, refer to my Wiser Weddings: Personal Finance Worksheet.
I wouldn’t suggest touching any emergency fund or non-liquid assets for your wedding. You’d much rather bring those into your marriage so you start on a blissful note.
TIP: Before talking about items #1 & #2, pray that God strips you off pride or judgement. You may not feel comfortable talking about these at first, especially if there is any disparity between you and your fiancé’s financial standing. Setting financial intimacy as your marriage goal this early is helpful. Your fiancé will be the closest person you’ll have in your life, so you ought to be honest to him, and vice versa.
Let me know in the comment section below what your experience was like when you talked about finances with your fiancé for the first time.
3. Identify where your wedding funds will come from.
In a perfect world, there’s a wedding fund that’s been set aside between the two of you. But this is rarely the case.
The next best scenario is to save up for the wedding during your engagement period. This means, not touching your emergency fund, investments, or other assets. You may have to drop some very big expenses like travels, or move to a cheaper rental place and put the savings towards your wedding fund.
Before the engagement, Mike and I had been separately setting aside 15% of our incomes for savings and investments. From the first month of our engagement until the wedding day, we decided that we would both put that combined amount towards our wedding funds.
We still tried to save anything we could from our daily spending. We put traveling with friends on hold and kept our fun activities on a down low during our engagement period (which was 8 months). We still had so much fun because we found ways to be thrifty!
Our approach doesn’t have to be yours. While we’re happy that we didn’t have to borrow money for the wedding or touch our existing emergency funds and investments, there could still be an even wiser way than ours. Like sticking to a much smaller budget.
I HIGHLY discourage anyone from borrowing money for the wedding. This includes charging the expenses on credit card without a plan of repaying them in less that 30 days. You wouldn’t want to start your marriage in debt. Some people borrow money from their family and commit to paying it within a definite time. Evaluate this option very well because you also wouldn’t want to strain any relationships in the event that you both couldn’t keep your promise.
I believe that your wedding can still be beautiful, with whatever savings you can afford.
4. Discuss your position on gifts.
In some cultures, wedding cash gifts are very much expected that they’re computed as part of the wedding fund before they’re even received!
I would err on the side of being conservative and not account it as part of your wedding budget. A gift, after all, is a gift. The giver has no obligations of giving such a gift. Again, I may be contradicting many cultures, but this is at least what I believe the Bible says about gifts.
Don’t get me wrong, I love gifts! It think that it’s God’s way of pampering us! And I (and our family) have received many!
I just find that there’s a wiser way of handling wedding cash gifts - by saving them instead of spending them for the wedding.
This way, you can also avoid pressures from anyone who’d give gifts with obligations (e.g. their choice of venue, their friends’ inclusion on your guest list, etc.).
The wedding planning season is a great time to be creative with your fiancé, and to be more communicative too!
How to prepare your part:
Pray about how you would talk to your fiancé about this topic. James 3:17 says, “But the wisdom that comes from heaven is first of all pure; then peace-loving, considerate, submissive, full of mercy and good fruit, impartial and sincere.”
Sign up here for the Wiser Weddings: Personal Finance Worksheet. This includes a worksheet to crunch the numbers for steps 1 & 2.
Go through your bank accounts, budget tracker, and other financial documents to fill out the worksheet provided.
Have a plan to pay any debt now! Consult a financial planner on how to do this.
Share with your fiancé about what you’ve learned.
How to prepare together:
Pray together. Matthew 18:19-20 says
“Again, truly I tell you that if two of you on earth agree about anything they ask for, it will be done for them by my Father in heaven. For where two or three gather in my name, there am I with them.”
Schedule a time together to share about your financial standing based on the four talking points I discussed above.
If after the conversation, you are concerned about your or your partner’s financial situation, you can read this this.
Reading this after you’ve already figured out where your wedding funds will come from? Share with me in the comment section below how you both talked about it. Thanks in advance!