Fork in the road, which way should my savings go?

[Like2Plan]

I have absolutely no problem with affordable luxury spending. Yes, we spent 25K but we earn a 6-figure income and knew we'd be spending that money from the day our daughter was born 13 years prior. It was something we saved for over the course of many years and we paid cash for it. We were debt-free except our mortgage and still saving 25% of our income. If you've got it, spend it and enjoy it. If, however, you don't have it, that's a different story.

Disneysteve,
This reminds me of the Suze Ormond segment-Can I Afford this. If a person is debt free except for mortgage, no CC debt, retirement savings, 6-9 EF, saved up for the item and so on--APPROVED!
It would be interesting if the OP posed his question on the Suze Ormond show from the perspective of the Can I Afford this segment.

It seems the OP is framing his question from the perspective of how he/she can get into debt most efficiently without questioning whether it is debt that should be taken on.

[disneysteve]

Disneysteve,
This reminds me of the Suze Ormond segment-Can I Afford this. If a person is debt free except for mortgage, no CC debt, retirement savings, 6-9 EF, saved up for the item and so on--APPROVED!
It would be interesting if the OP posed his question on the Suze Ormond show from the perspective of the Can I Afford this segment.

It seems the OP is framing his question from the perspective of how he/she can get into debt most efficiently without questioning whether it is debt that should be taken on.

I know exactly what Suze Orman would say to this one - DENIED.

[pumpkinpie]

I never thought education was a bad investment, but now I do. You are right Riverwed, I did spend too much on my education. I am a lawyer and went to a public law school and had to pay my own way, including summers when I clerked for judges without pay, bought expensive giant textbooks, payed for multiple bar review classes and the exam which went into the thousands of dollars, and also volunteered for low pay at legal aid. My only excuse is that everyone told me it would increase my lifetime earning potential and help me help other people. Yearly I make roughly the same amount that I owe in loans. However, cost of living (including not having a car) makes it hard to get ahead on the principal (my payments are around 1k.month and the principle does not seem to budge). The agency I work for does not help with loan repayment. The only people I know that are making a large dent in the payments are people making roughly 200k. So, I kind of look at it as a long term debt that I am going to live with and do my best paying back, but I am not going to delay having a home and children, etc. because of a long term obligation.

[disneysteve]

Yearly I make roughly the same amount that I owe in loans.

If you owe 110K and earn 110K, you should certainly be able to repay that in 10 years. Doing so, though, will require you to live quite frugally and keep your spending under control. It will also require you (and your spouse) to be on the same page about money and financial priorities. If the two of you don't agree or if getting out of debt isn't even a priority for you, then you may have this debt for the next 25 years.

[KTP]

I'm surprised to hear this opinion from you Steve, given how much you reportedly spent on a bat-mitzvah.

However, I do agree with you.

Hah! I never knew it was spelled "bat" mitzvah. I always heard it as bar mitzvah.

Funny. And to think that my dad's side of the family is Jewish.

Ah well, we were mostly Christmas and Easter type Jews when I was little.

[disneysteve]

Hah! I never knew it was spelled "bat" mitzvah. I always heard it as bar mitzvah.

Bar Mitzvah is for a boy - means son of the commandments
Bat Mitzvah is for a girl - means daughter of the commandments

[photo]

At first, I thought your post was a joke.

Assuming that you are serious, take a look at the US economy. Why are so many people in so much financial trouble? The answer will sting: they are spending just as you are.

If you proceed with spending nearly half of your annual income on a wedding, and you aren't even contemplating whether you can afford it, then you are doomed for a life of debt.

Don't you deserve better than that?

[photo]

If you want to take a special trip and you can pay for it, why is that a terrible choice?

If I owe you money, and I choose to take a special trip instead of fulfilling my obligation to you, why is that a terrible choice? My desire for a special trip is much more important than paying you back.

[snafu]

Strider: Folks who look after their finances are shocked that you are happily spending nearly the bride's annual gross income, $ 5,000. plus an hour for the party part of your wedding. I'd rather put $ 38,000. towards a downpayment on a house that I could enjoy for years particularly since interest rates are so low.

I recall there is was TV series touting expensive weddings and laughed at the pretentious couple I saw who were focused on 'a party to remember.' I doubted their marriage would outlast their debt.

Without a 20% DP, you will be paying incredible sums for compulsory mortgage insurance. Before considering buying, have a serious look at amortization tables. These are not simple, interest loans. Closing costs often include crazy fees for signatures and unexplained expenses. Ask about each and every one and try to get as many as possible waived.

[RedSilk]

Your question like asking is it better to be boiled alive or fried alive.

Is it more important for you to have money for your wedding or your marriage? Well, you can decide on that one.

[photo]

Is it more important for you to have money for your wedding or your marriage? Well, you can decide on that one.

Well said. It boils down to what is more important: sharing your day with people who mean the most to both of you -- or-- having a lot of expensive details that ultimately will be forgotten by most guests but that you may come to resent because you'll be paying them off for years.

Going into debt or wiping out life savings because you feel entitled to something you cannot afford is a recipe for both divorce and unhappiness in life.

[BMEPhDinCO]

Yikes, people seem to be quite upset over the wedding costs! Here's my thoughts before I read another two pages, if I repeat, sorry!

1. I hope that $30-38k includes the honeymoon? If so, depending on where you live and how many you plan to invite, it's reasonable even if it's high...we spent around $30k too, for 100 people, a honeymoon in hawaii, travel costs, etc...
HOWEVER - whatever the cost, DO NOT BORROW MONEY FOR A WEDDING - you should ONLY get a loan for education, car, house - NOTHING else.

2. Why do you connect "marriage" with "house"? Granted, many people do this, but it wouldn't hurt to live in an apartment for a year and save up for the house. You should have 20% down-payment plus at least 2 months in reserves plus at least 1% of the house cost. It sounds like a lot, but within 6 months of buying our house, we ended up spending another $12,000 or so on fixing stuff, so do your due diligence and then spend to fix what you forgot about and spend it from your account, NOT a loan.

Hope that helps you! Also, I suggest working out a budget with your to be spouse so you can both be on the same page.

[Like2Plan]

Yikes, people seem to be quite upset over the wedding costs! Here's my thoughts before I read another two pages, if I repeat, sorry!

Bmephdinco,
I don't think folks are upset, but rather offering some other ideas perhaps offering a fresh perspective from a different vantage point that the OP may not have thought of-- it seems you agree about not going into debt for a wedding and 20% down on the house....

[disneysteve]

depending on where you live and how many you plan to invite, it's reasonable

It is only reasonable if you can afford it. OP can not. Paying for this wedding will either require taking out a loan or wiping out his savings. I don't consider either of those to be acceptable options.

[photo]

Yikes, people seem to be quite upset over the wedding costs!

It isn't the wedding costs, but it's the fact that someone is planning to spend something they cannot afford and/or are sacrificing other essential savings in order to pay for the wedding.

If you make minimum wage, then $5,000 is way too much to spend. If you make $500,000 a year, then a $100,000 wedding isn't unreasonable, all other things considered.