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  • Wedding Loans

    I got this question via email. I changed some details to keep it anonymous but was curious what advice you would have given.
    I wanted to get your opinion on the best way to go about obtaining a loan for a wedding in the summer of 2016. My fiancee and I are both PGY1s in high-paying specialties and only have ~$90K in student loan debt between the two of us. We are currently saving $1000 per month each from our resident salaries. Her parents are not as financially prepared for a wedding we have planned (and we only plan on getting married once, so we both agree we would like to have it a certain way, aka $$$). Anyways, if we were to go about trying to obtain a loan to supplement the wedding payment, what would be the best way to go about this? Or is this an absolutely stupid idea? I can ask my parents for a "loan" but would really like to avoid this at all costs - just trying to get financially independent from them. Is there a certain loan or bank or company to look out for in a situation like this? I think we wouldn't have a problem to keep saving another $1000 each per month, and possibly could bump it up to about $1200 each a month. So if we were to take out a $20,000 loan and we could pay it back in a bit under a year, is this something that makes sense? What sort of interest rates should I be looking out for? And any big things to do/not do in a situation like this?

    Here was my reply but I'm curious what the community thinks on this one. On the one hand, I think weddings should be cash-flowed. On the other hand, these two are doing so well anyway, who cares what they do about the wedding?

    Well, I think it's dumb to borrow money for a wedding. I think it's even dumber to borrow $20K. I think it's especially dumb to do so given that the two of you make over $100K combined.


    However, you guys have done so well with the larger financial items ($90K in student loans between two docs is almost unheard of these days) that you can probably do whatever you want with regards to this wedding and still be just fine in the long run. 5 years from now you could probably be saving $20K a month. That said, consider the following:


    1) Look at each of your current savings. Use that first.

    2) Your parents and her parents can likely contribute something. It might only be $1000 each, but it gives them the chance to contribute which is important.

    3) You have time between now and the wedding to save up even more- $2000 a month is good, but come on. You guys make $100K a year. You can easily double your savings if this wedding is really important to you. You still have $50K/year to live off of. If you push the wedding back 3-6 months, you can probably cash flow the whole thing yourselves.

    4) If you do decide to borrow part of the cost, why not just get a 0% credit card offer for 12-15 months and put the wedding expenses on that?

    5) Don't feel badly about cutting back on some of the expenses. We spent far less on our wedding (although we had far less income than you) and still have a wonderful marriage. Spending more doesn't necessarily make the experience any more special. In the end, it's about the commitments, not the booze, food, and facility. Lots of people get married every day for far less than $20K.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    Honestly this makes me nauseated.  Dumb on a personal finance level and incredibly vein on a personal level

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    • #3
      I think it's a bad idea.  It's not so much the money itself as much as it's a slippery slope behavior-wise.  First, it's "lets take out a loan to help pay for the wedding."  Then, "we'll get a little bigger mortgage."  Before you know it, your situation isn't so good anymore.

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      • #4
        I waited until I was an attending so I could spend what I wanted on my wedding without relying on loans. My spouse didn't appreciate waiting at the time but I guess that's how can you tell you found the correct partner

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        • #5
          My husband and I got married last summer.  We had a "budget" wedding for $15,000 that we completely paid for with his savings (he is a bit of a Mr. Money Mustache, so he had quite a bit saved).  Looking back, we both wish we had simply eloped and only hired a photographer.  I imagine that the $20,000 loan will only pay for a portion of the wedding because we cut every wedding corner (online invitations, Friday wedding, buffet, all-inclusive event site, no bridesmaids/groomsmen, only 75 guests) and it was still $15,000.

          One thing that is slightly concerning about this couple is the phrase, "Her parents are not as financially prepared for a wedding we have planned" yet the groom is not willing to ask his family for money.  Parents should not have to "financially prepare" for weddings.  If they are able to give a gift to help with the wedding then that is great, but no one should be expected to pay for your wedding.

          We DID each take out a credit card with great points for spending $3000 in the first there months of purchase, right before we started paying for the wedding.  We paid each off immediately but received a total of $800 in travel rewards.  We never spend much money, so in this instance we were able to get some great credit card rewards.

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          • #6
            Although correlation does not equal causation, I love to point out that higher cost weddings have correlated to higher divorce rates...sorry, no source handy

            if you can't cashflow it, you don't need it.

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            • #7
              Just don't do it.  Don't and that's it.  Do what you can afford.

               

              We had a tiny celebration of our marriage that cost us close to nothing and it was great.  Most people hate weddings anyway.

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              • #8




                Just don’t do it.  Don’t and that’s it.  Do what you can afford.

                 

                We had a tiny celebration of our marriage that cost us close to nothing and it was great.  Most people hate weddings anyway.
                Click to expand...


                ^^ This - I agree 100%

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                • #9
                  I've never heard someone say they wish they had spent MORE on their wedding.  But, with two physicians entering high paying specialties, you're going to have plenty of money eventually.  I like the Good Dr. Dahle's suggestion of using a no interest credit card to fund part of it, using accelerated savings for the rest.

                  As for the wedding, an extra $20,000 isn't exactly extravagant; it's actually below the average outlay for a wedding in this country.  The initial e-mail didn't indicate the total anticipated cost, though. Keep in mind that although the bride & groom are residents, their guests probably know them and think of them as doctors.  They will expect to have a nice dinner, open bar, a nice venue, etc...  Spend the money in the places that matter to you.  For us, that meant taking care of our wedding party (paying for their lodging, dresses and suits) and of course, an open bar.

                   

                   

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                  • #10




                    Although correlation does not equal causation, I love to point out that higher cost weddings have correlated to higher divorce rates…sorry, no source handy

                    if you can’t cashflow it, you don’t need it.
                    Click to expand...


                    Interesting. Do you have a link to that?

                    Edit: NM, Google is my friend. There is also a correlation to your engagement ring expense and rate of divorce.

                    http://www.cnn.com/2014/10/13/living/wedding-expenses-study/

                    http://www.shape.com/blogs/sex-and-love/study-shows-engagement-ring-cost-linked-divorce
                    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                    • #11




                      incredibly vein
                      Click to expand...


                      can i change my user name? or at least use this for a band name?

                       

                      we spent more than i would have liked on our wedding, but did not go into debt, which to me falls under "absolutely stupid". it ended up being a compromise, but was a great way for us to get on the same page re: finances. to spend a little more on a wedding but to get on the same page re: CC debt, buying cars with cash, etc was well worth it for me.

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                      • #12
                        They are going to be fine either way.  I think it is ridiculous to even consider taking a loan for a party though.  Really? In the end, they are going to earn a lot of money and can spend it however they please.

                        But I would definitely make it a cheaper party.

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                        • #13
                          I'm not sure where the couple is on their planning process, but an awesome website that was very helpful in planning is: http://apracticalwedding.com/

                          So many of the wedding websites and blogs out there highlight the extravagant $50k++ weddings that are unrealistic for most people. Also, if culturally appropriate, you could also ask guests for money as a wedding gift- you can always buy nice china and kitchen appliances later.

                          Individually write down you and your fiance's main values for the wedding. It could be abstract or concrete (e.g. hospitable, intimate, want amazing photography). As you budget for your wedding and have to make decisions on expensive items, check them against the values you wrote down and that may help your decision. I know for mine, we were debating whether or not we wanted a bigger dance floor vs a more expensive item on the menu. One of the values we wrote down was that we wanted people to have fun, so we decided on the bigger dance floor, and don't regret that decision.

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                          • #14
                            My wife and I got married as medical students.  We spent about $5-6k on a wedding and we had about 150 guests.  Went to my church as it was essentially free.  Had a reception with an open bar (beer, wine) at a local convention center.  We had fried okra, quesadillas, little smokie's and all sorts of unhealthy foods that were pretty cheap (We had zero complaints, no stale food that sat in warmers).  We just bought all the songs we wanted played for dancing at hour wedding on itunes (NO CHICKEN DANCE!) and rented stereo equipment.  I can honestly say that we have pretty much no regrets except for not having a dedicated photographer and even that has waned over time.  You'll be so busy on your "magical day" that I don't think spending extra money on it will make much of a difference unless it is a cruise or destination wedding that is a longer experience.

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                            • #15
                              My wife and I spent a very stupid amount of money on our wedding.  It was incredibly beautiful and she did a ton of work on decorations that made it seem even more extravagantly priced than it was.

                              On the wedding day, since we both come from low-middle/working class backgrounds our families were not appreciative of just how fancy the whole thing was.  I would guess it was the most expensive meal 95% of the guests had ever had.

                              We have a really nice video of the day that we cherish but if we were to do it again, we would have went on a month long honeymoon instead of the wedding and still save 10s of thousands.

                              We have now been married for five years and the financial fallout was pretty insignificant all told when looked at from a career in medicine. Did not borrow money for it but did use money that could have been used on student loans so was effectively the same. My advice now is that a fancy wedding is highly unlikely to give greater happiness than many things so I would do a an open, honest value analysis on this and other expenses.  If the wedding is honestly crucial to life satisfaction of both partners, then borrow away. If not, cut costs.

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