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

[disneysteve]

the number is closer to 32 as of right now, and might possibly be below 30 depending on a few decisions we make as the date approaches. As of right now though, we've sticking with 38k as our savings goal because it would be our worst case scenario.

Well, 32 is better than 38 and below 30 is even better though still probably too much for your situation. I'm curious what constitutes a "worst case scenario" in regards to wedding planning. As I said, we hosted a 25K affair just 3 years ago so I'm familiar with all that goes into planning and executing a big party for 200 guests. We did numerous things to keep costs down because we could have easily spent well over 30K.

[KTP]

awww, let them have their 30K wedding and buy a house they can't afford using one of the government programs for little down payment.

In a couple of years when they are underwater they can just cry to the current politician in power that they will vote for him if he will reduce their mortgage. They will explain that all of the other responsible people who put down 20% or more and have not thrown huge parties or financed a lot of vacations can pay for it.

It is the current plan for everyone else in the USA in trouble, so why not them too? You guys are being unfair.

[riverwed070707]

I won't be as snarky as the others have been. While I would NEVER pay 30k+ for a one-day affair (my wedding cost $5k), I think you have the right to chose your priorities. It's great that you're planning and saving for what you want. HOWEVER, if you choose to move forward with the extravagant wedding then you're making that your priority and you need to realize that means no house for a while. It's probably going to take you another 2-3 years to save your DP after you've wiped out savings. If that's a worthwhile sacrifice to you, then enjoy your party and good job on saving. Just don't turn a good decision into a mistake by deciding to take out a loan after all or financing too much house. You can have your cake and eat it too, its just going to take longer than the timeframe you have in mind.

[bjl584]

Hey guys, after looking around on the site for a while, I like the advice I'm reading, and decided to join today. I have somewhat of a situation and was wondering what everyone's two cents were..

I'm getting married next fall. Me and my fiance are paying for the wedding ourselves. As of right now, we're saving every penny we can, in hopes of not having to get some sort of personal loan to pay for the wedding come next fall. We have a savings goal of "x" amount of dollars needed for the wedding. We've been saving since January and are right on track to meet that goal 2-3 months before the actual wedding date next fall.

However, doing so will require using all of our savings for the wedding, leaving us with nearly nothing for a house afterwards.

So as I'm sitting here, I've been wondering if it would be better to pay for the wedding with a loan instead, leaving our savings as cash for a down payment for a house?

If so, do you think we'll run into trouble getting approved for a mortgage after taking out a decent sized loan for the wedding?

If you guys need more numbers for better accuracy(such as income and credit scores, etc) I have round about figures that'll reflect our situation closely..

Wedding cost: $38,000

His income: 50k His credit 690-710

Her income: 42k Her credit 760-790

Housing market for our area ~ $260k



Thanks for any help guys. If there's anything else I'm forgetting to mention, let me know and I'll get back to you! Thanks!

Why are you willing to completely wipe out your savings for a wedding? If I were you I would scale back the wedding and use the money that you've saved to start your new life as a married couple. House, furniture, maybe a car. Those things will get you much further toward building a future together than spending every dime you have on a wedding. A wedding is a want, not a need, so there's no reason to get extravagent with it. The local justice of the peace will marry you for $250. That's a bit extreme, but you can have a nice wedding for less than $10,000.

Scale back the wedding to something more reasonable, then focus your savings efforts on saving 20% down for a house AND saving up a 6 month emergency fund. And, 260K is too much house for you at your income level. I'd scale back to a 200K house.

[pumpkinpie]

thoughts on the wedding

Ok - I have to add my two cents in here since I am facing a similar situation on both accounts. My wedding cost is projected into the 30k range, I have $110k in student loan debt, and would like to purchase a house before the wedding (gasp!). So more debt, more income, but I will have some significant help with the wedding cost.

I initially avoided the "expensive" wedding too. My fiance, my family, and his family, all stopped me from squashing the wedding. I am glad they talked me out of it (as if I had any choice). A couple of points:

You have a life, and you shouldn't wait to do nice things because you aren't comfortable with the amount of cash you have sitting in a bank account. At this rate, I won't be debt free until my 40s at the earliest. So I am learning to live with debt and be moderate about spending.

A 30k wedding is not an expensive wedding in many parts of the country. I am doing it in a suburb of MD, intenionally avoiding DC and still am not having anything special. It's a racket, but it is what it is.

As long as you are setting goals and being judicious about spending and saving, I think your wedding is your choice as is the purchase of the home. (FYI 250k won't buy you a condo near me). I wouldn't personally take out a loan for the wedding, anyway you can move it back to save more beforehand? We are waiting a year and half to help ourselves and our parents have some time to save.

[riverwed070707]

^ Don't take that advice. Just because she's doing it doesn't make it OK. Perfect example of living beyond your means.

Maybe to accurately assess the situation we need a better picture of your overall finances. Are all of your other obligations being met? Are you saving 15% to retirement? Are you debt free? No car payments, SLs, etc?

[dawnwes]

With this way of thinking, I don't see you out of debt in your 40s either.

It doesn't matter what area you live in, if you can't afford the wedding or the home, you can't afford it. You always have choices.

Dawn

You have a life, and you shouldn't wait to do nice things because you aren't comfortable with the amount of cash you have sitting in a bank account. At this rate, I won't be debt free until my 40s at the earliest. So I am learning to live with debt and be moderate about spending.

A 30k wedding is not an expensive wedding in many parts of the country. I am doing it in a suburb of MD, intenionally avoiding DC and still am not having anything special. It's a racket, but it is what it is.

As long as you are setting goals and being judicious about spending and saving, I think your wedding is your choice as is the purchase of the home. (FYI 250k won't buy you a condo near me). I wouldn't personally take out a loan for the wedding, anyway you can move it back to save more beforehand? We are waiting a year and half to help ourselves and our parents have some time to save.

[disneysteve]

I will have some significant help with the wedding cost.

So your situation really isn't the same as the OP who is paying for the wedding himself.

You have a life, and you shouldn't wait to do nice things because you aren't comfortable with the amount of cash you have sitting in a bank account.

If you don't feel you should "wait to do nice things" until you can actually afford those nice things, you are heading down a dangerous path.

A 30k wedding is not an expensive wedding in many parts of the country.

While that's absolutely true, what you spend shouldn't be based on what others in your area spend. It should be based on what you can afford. I'm quite certain there are couples in the MD/DC area that get married in their parent's backyard with food cooked by family members and maybe spend a couple thousand dollars for the whole spread.

It's a racket, but it is what it is.

It is a racket, but that doesn't mean you need to participate in it.

[pumpkinpie]

I take issue with the implication that I live beyond my means - I have no debt other than student loans. I will not be able to pay 110k off in 10 years no matter what I do. I am not postponing my life and future to be debt free maybe 3 years earlier.

Nice things are part of life - I refuse to live like the person in my office who is 25 and refuses to do anything and I mean anything because of her student loans. If you want to take a special trip and you can pay for it, why is that a terrible choice?

[feh]

How could you possibly be comfortable with having a party that is going to cost you 5 months worth of income for one day, maybe 5-6 hours? That's over 80% of a house down payment on a 230K home - for one party.

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.

[bjl584]

I take issue with the implication that I live beyond my means - I have no debt other than student loans. I will not be able to pay 110k off in 10 years no matter what I do. I am not postponing my life and future to be debt free maybe 3 years earlier.

Nice things are part of life - I refuse to live like the person in my office who is 25 and refuses to do anything and I mean anything because of her student loans. If you want to take a special trip and you can pay for it, why is that a terrible choice?

Nothing wrong with living a little. However, the OP is talking about spending 38K on a wedding. Now 38K is relative, and for someone earning 250K a year with a 3 million dollar net worth, a 38K wedding is no big deal. But, 38K to OP represents 5 months of his income, AND it will completely wipe out his savings. Savings that could be used much more wisely such as a house down payment. That is what the board is taking issue with.

[disneysteve]

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.

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]

I will not be able to pay 110k off in 10 years no matter what I do.

How much do you earn? I agree that 110K is a huge amount of student loan debt. I graduated with 102K in debt in 1990 and I paid it off in about 12 years. It would have been 10 but I changed jobs 7 years into that and was unemployed for 3 months and took a pay cut at the new job.

[disneysteve]

Nice things are part of life - I refuse to live like the person in my office who is 25 and refuses to do anything and I mean anything because of her student loans. If you want to take a special trip and you can pay for it, why is that a terrible choice?

I don't think it is a terrible choice. I certainly didn't stop living while I was paying off my loans. What matters is the big picture. What percentage of income are you saving? Are you funding your retirement plan? I totally agree with you that some niceties can be part of one's life even when you're in debt as long as you have a good solid plan to repay the debt and are staying on track with that plan.

But all of that said, there is a big difference between a few days at the beach or a new iPod and a 30K wedding.

[riverwed070707]

I take issue with the implication that I live beyond my means - I have no debt other than student loans. I will not be able to pay 110k off in 10 years no matter what I do. I am not postponing my life and future to be debt free maybe 3 years earlier.

Nice things are part of life - I refuse to live like the person in my office who is 25 and refuses to do anything and I mean anything because of her student loans. If you want to take a special trip and you can pay for it, why is that a terrible choice?

Probably true, in which case I would say you overspent on your education. Just because student loan debt is considered "ok debt" by a lot of standards doesn't mean there aren't limits. Loans should be limited by your earning potential. Obviously I'm making some assumptions here -- I don't know what you do, nor what your degree is in but if you're not going to be earning enough to repay them then yes I would say you have and are living beyond your means. Can't always make assumptions about where the money was spent, but given your rational for your other spending I would venture to guess your SL spending was done with a similar mentality. There are very, very few professions that warrant that kind of spending for an education.