Saving for Wedding

[dfresh1988]

Good morning,

I'm kind of a noob to personal finance. I'm 23 years old and have been out of college for a year. I'm engaged to a lovely woman and we're due to get married September 1 of this year. I have been blessed to find a full-time, well-paying job straight out of college. My fiancee, however has been living with me for seven months and has been unable to find full-time work so I am the only income for our household. With the wedding approaching and her parents only paying a portion of the costs, I am looking for creative ways to afford the rest of the cost.

Here's some details on our financial situation:

My salary is just over $60k but I get paid overtime so I made $85k in 2011. I expect a similar overtime rate throughout 2012 as well as a promotion and 10-15% pay raise in April. On a monthly basis, I make all purchases on my credit card (to get the points) and pay the balance in full every month. I carry no credit card debt. We are both lucky enough to have no student loans. The only debt we carry is for my car and the payment is $360 a month, and I contribute 10% of my pay to a 401k (employer matches 6^). We rent an apartment for $1,000 a month. I've got around $7,500 saved up in a checking account (after current CC balance).

As for the wedding, we have estimated that we will need to spend around $17,000 of our own money. Therefore, over the next seven months, we need to save $10,000 at minimum. I am not sure this is possible the way we have saved in the past. I have explored different methods of paying for the wedding expenses but have not come up with much yet. We're having a quite large wedding and I expect to receive enough in gifts to offset the $17,000 we will have to pay.

What I am leaning towards is using one of the credit card offers I continue to receive in the mail for a promotional 0% interest rate for 15 months (Discover More Card). I would use this card for any and all wedding expenses (for vendors that take credit cards), pay minimum balances every month, and pay the balance in full after the wedding is over and we have received gifts. Are there any downsides to this strategy I am missing or that will get me in some sort of financial trouble down the road?

My fiancee suggested putting all of our everday purchases on the 0% card and paying minimums to save more cash and use that on wedding expenses, then pay the balance on the 0% card after the wedding? Obviously these strategies are constrained by whatever credit limit I would end up with on the card. Is her strategy a viable one also? I see it as much more risky.

Also, I might expect some people to respond that we should reduce our monthly spending, or reduce the cost of the wedding. Our monthly spending is as low as it can be and I estimated our expected spending for the wedding conservatively to be safe.

Thank you for your help!

[Naples09]

Not that most would recommend this, but you could lower your 401k down to just the match for 9 months. That will increase your savings rate. Just make sure you increase your 401K contributions back to 10% or higher after the wedding.

[bjl584]

I would think that most people are going to suggest that you scale the wedding back to something that you can afford with cash and to avoid using a credit card in hopes of offsetting costs with gifts, overtime, and raises/bonuses that may or may not pan out in your favor.

[disneysteve]

Originally Posted by dfresh1988

get paid overtime
I expect a similar overtime rate throughout 2012 as well as a promotion and 10-15% pay raise

over the next seven months, we need to save $10,000 at minimum.

I expect to receive enough in gifts to offset the $17,000 we will have to pay.

Welcome to the site. You will find that we are a generally conservative group and give advice that isn't often what the person asking wants to hear, so here goes.

If you can't afford it, don't buy it. If you need to come up with "creative" ways to finance it, you probably shouldn't be doing it.

You mention several expectations as part of your plan. What if things don't work out that way? What if you don't get as much overtime? What if your promotion isn't as lucrative as you anticipate? What if you don't receive enough in gifts to cover the wedding costs? What if some unexpected expense crops up between now and then?

What are your current monthly living expenses? Remember that you need to maintain a 3-6 month emergency fund first before any wedding savings, so not all of that $7,500 currently saved is available for wedding expenses.

I'm also curious about your fiancee. You say she hasn't been able to find full time work so yours is the only income. Why is she not working at all? Just because she can't find full time work doesn't mean she couldn't be working 1 or 2 part time jobs. If you guys are dead set on having this 17K wedding, every little bit helps.

[dfresh1988]

Originally Posted by disneysteve

I'm also curious about your fiancee. You say she hasn't been able to find full time work so yours is the only income. Why is she not working at all? Just because she can't find full time work doesn't mean she couldn't be working 1 or 2 part time jobs. If you guys are dead set on having this 17K wedding, every little bit helps.

Yeah it's been an interesting situation with her. She has a psychology degree and doesn't know what she "wants" to do so she struggles with that. Also, we are both from Chicago but live in Kentucky for my job, so she has been dealing with emotional issues of being away from her family and friends. This has taken away from her concentration on finding a job. She substitute teaches, but that is unreliable and does not pay well. I push her every day to go out and get a part time job at a restaurant, or as a teller at a bank, or in retail, or literally anything but she gets upset and frustrated about it because she hasn't had luck in looking for those, or any jobs. But anyway, this isn't a psychology forum lol

[dfresh1988]

Originally Posted by disneysteve

You mention several expectations as part of your plan. What if things don't work out that way? What if you don't get as much overtime? What if your promotion isn't as lucrative as you anticipate? What if you don't receive enough in gifts to cover the wedding costs? What if some unexpected expense crops up between now and then?

What are your current monthly living expenses? Remember that you need to maintain a 3-6 month emergency fund first before any wedding savings, so not all of that $7,500 currently saved is available for wedding expenses.

Forgot to reply to the rest of this.

My monthly living expenses are about $2,700. I have an emergency fund saved up in a savings account totaling about $12,000 earning a hefty 0.75% interest. I know there are better ways to earn interest, I just haven't had time to make those changes.

As for overtime, I work overtime at my discretion. In reality, I could work 60 hours a week and not run out of things to do, but I don't work that much; generally between 48 and 55 hours a week. My boss has told I will be getting a promotion, but it isn't in effect until April. He gave me the 10-15% range and said it would not be less. Gifts are the only indeterminable part of the equation and the riskiest part I can see.

[disneysteve]

Originally Posted by dfresh1988

My monthly living expenses are about $2,700. I have an emergency fund saved up in a savings account totaling about $12,000

As for overtime, I work overtime at my discretion. In reality, I could work 60 hours a week and not run out of things to do, but I don't work that much; generally between 48 and 55 hours a week. My boss has told I will be getting a promotion, but it isn't in effect until April. He gave me the 10-15% range and said it would not be less. Gifts are the only indeterminable part of the equation and the riskiest part I can see.

This changes my opinion somewhat. So you have $12,000 in an EF in addition to the $7,500 saved toward the wedding. A 3-month EF would be $8,100. Since you guys have zero debt, I wouldn't see a problem with putting some of that 12K toward the wedding and then replenishing it later. If you take the EF down to 8K, that gives you an extra 4K for the wedding, or $11,500 right now.

Since you have the option to do pretty much unlimited OT, if I were in your shoes, I'd be busting my butt for a few months and raking in as much as I could. Even an extra 5 hours/week between now and September would bring in some good money (don't know how much since we don't know your hourly rate).

Finally, assuming you do get the raise, 100% of that extra income should be going to savings. Don't fall into the trap of elevating your lifestyle to match your new income.

[dfresh1988]

Originally Posted by disneysteve

Since you have the option to do pretty much unlimited OT, if I were in your shoes, I'd be busting my butt for a few months and raking in as much as I could. Even an extra 5 hours/week between now and September would bring in some good money (don't know how much since we don't know your hourly rate).

Finally, assuming you do get the raise, 100% of that extra income should be going to savings. Don't fall into the trap of elevating your lifestyle to match your new income.

I work as much as I'm comfortable working. There comes a point where I just want to have a Saturday and Sunday consecutively to myself, you know what I mean? My straight-time hourly is $28.96 and my OT hourly is $43.44. So yes, I do have the potential to make just about as much as I want to. I also get to points where I almost feel as though I'm taking advantage of my employer but the way I see it, if I'm doing productive work on my time off and making the company money, there's no reason I shouldn't be able to charge the OT.

I agree with you wholehartedly about the extra income from the raise. Now if I could just get my fiancee on the same page... lol

Our plan is to eventually move back to Chicago (probably 5-6 years) and buy a house at that time. I'd like to put down as large of a down payment as I can because I HATE interest.

[photo]

Originally Posted by dfresh1988

I expect a similar overtime rate throughout 2012 as well as a promotion and 10-15% pay raise in April.....Therefore, over the next seven months, we need to save $10,000 at minimum. I am not sure this is possible the way we have saved in the past. I have explored different methods of paying for the wedding expenses but have not come up with much yet. We're having a quite large wedding and I expect to receive enough in gifts to offset the $17,000 we will have to pay.

It is strongly suggested that you read this thread about a guy who was "expecting" future money, as well:

12 months, no interest -- I just got slammed with a massive charge of back interest :

Second, a wedding is to celebrate with your closest family and friends, not to rake in gifts to "pay for" for the wedding. Your marriage will be starting on the wrong foot if you're spending beyond your means. The most meaningful weddings I've ever attended were ones where thought was spent much more than money. What is more important -- to share your day with special people or to show them how expensive a wedding you can put on? If your fiancee does not agree, then you have more problems than you think.

Having to finance a wedding will foretell future financial matters in your married life.

[BMEPhDinCO]

So I see that, based on disneysteve's advice, you have to make up $6,500 for the wedding (does this also include a honeymoon?).

If you start saving in Feb., and need the money in August (cuz you usually have to pay in advance for most stuff), that gives you 6 months - that's basically $1,100 a month.

If your fiance worked as a waitress or something like that 4 days a week at 5 hours a day (ie part-time) and made (after taxes) $100 a week - she'd be able to contribute $400 a month, leaving you with $700. If you make (after taxes) $30 an hour, you'd need to work an extra 6 hours a week OT.

That sounds pretty doable and it would mean you'd have an extra month (August) to keep that up before the wedding for anything unexpected.

Hopefully that helps!

[Thrif-t]

Did I read that right? You think you'll get back in gifts what you put out for your wedding? Good luck with that dude. I'd plan on getting 1/2 back, if that.

[dfresh1988]

Originally Posted by Thrif-t

Did I read that right? You think you'll get back in gifts what you put out for your wedding? Good luck with that dude. I'd plan on getting 1/2 back, if that.

You're assuming I'm paying for the entire shindig. Her parents and my parents are contributing a combined $35,000 as well, so I was assuming a return in gifts of about 1/3.

[Thrif-t]

Oh ok, you should get that then. Good Luck!!

[Joan.of.the.Arch]

Is there a rule of thumb in some areas or among some social groups that you can expect to 1/3 of your wedding expenses as gifts? Really, I have no idea and things have changed so much since I was married. I understand weddings are getting more expensive, but I had not heard that gifts are keeping up with the increase. ??

[photo]

Originally Posted by Joan.of.the.Arch

Is there a rule of thumb in some areas or among some social groups that you can expect to 1/3 of your wedding expenses as gifts?

Well, of course. Get with the program, Joan! Guests are supposed to reimburse their hosts for the privilege of being invited. To reveal the situation for what it actually is -- a business venture -- the wedding couple should rent a credit card machine so when guests arrive at the reception, they must whip out their credit cards. The attendant then charges them for the meal plus extraneous costs (wedding gown, band, honeymoon, etc). It's really better that way so no one has the pretense that they were invited only for their presence, not their presents.

[Shewillbemine]

Originally Posted by photo

Well, of course. Get with the program, Joan! Guests are supposed to reimburse their hosts for the privilege of being invited. To reveal the situation for what it actually is -- a business venture -- the wedding couple should rent a credit card machine so when guests arrive at the reception, they must whip out their credit cards. The attendant then charges them for the meal plus extraneous costs (wedding gown, band, honeymoon, etc). It's really better that way so no one has the pretense that they were invited only for their presence, not their presents.

This is a pretty embittered perspective. Many couples receive plenty of money at weddings and many cultures find it socially acceptable to literally hand gobs of money in envelopes.

The couple should know their guests and the kind of gifts to expect since these are their friends and relatives. No need to be Sarcastic Susie here.

[RedSilk]

Is it normal these days for a middle class family to shell out nearly 50K for a wedding? I would think that a 35k wedding would be nice enough. Why not just cut costs so you don't have to pay for anything?

[disneysteve]

Originally Posted by Joan.of.the.Arch

Is there a rule of thumb in some areas or among some social groups that you can expect to 1/3 of your wedding expenses as gifts?

Not at all. There is no connection between the wedding gift and the cost of the affair. How could there be? As a guest, I have no idea how much is being spent. I don't know if dinner was $50 or $100 or more. I don't know how much the DJ or band charged. I don't know what was spent on flowers. We give what we give, usually $100 for the 2 of us, a little more if all 3 of us are attending. And we often give merchandise, not money, particularly if we know the couple well and know their taste, or choose something from their registry.

I was trying to figure out how OP is going to bring in $17,000 in gifts. With 250 guests, that's $68/person which isn't unreasonable. However, not everyone gives money. Lots of people will give gifts from the bridal registry like linens, picture frames, china, crystal, etc. OP, what are you going to do if half of your guests don't give monetary gifts? Are you going to go return everything to raise cash?

Originally Posted by Shewillbemine

This is a pretty embittered perspective.

I believe this was intended as sarcasm.

[feh]

Originally Posted by dfresh1988

You're assuming I'm paying for the entire shindig. Her parents and my parents are contributing a combined $35,000 as well, so I was assuming a return in gifts of about 1/3.

Man, oh man...$50K for a wedding?

I don't understand the mindset.

[Mr Nice Guy]

Can't help ya here. My sister is planning her wedding and its gonna come to around $10-15k.

If you are reading wedding magazines and stuff, don't.

Read a book on how to do a cheaper wedding. There are deals out there, you just gotta look.

But if you are dead set on the amount you already have in mind, some good advice has already been stated. (I just hope your fiance isn't pressuring you to make lavish accomodations when she has no skin in the game other than her parents. I would be pissed.)