Paying for a wedding

Not in love? Not engaged? Not even dating right now? Living on a desert island with no hope of meeting someone you want to marry?

This post is for you.

The average age that women marry is 27, the average age that men marry is 29. The median cost of a wedding is $18k. (The average cost is $28k, but the VERY expensive weddings out there skew the numbers for the rest of us).

The number two reason for divorce is trouble with finances.

If you start your marriage off with $18k of debt, you are starting your marriage off on rocky ground.

Now, I am not a wedding planning expert. I have never been engaged and I have never planned a wedding (but I do watch a lot of Bridezillas, guilty pleasure). From what I understand, weddings very quickly escalate to being out-of-control expensive, even if you are still keeping things simple and aren’t a bridezilla. So while there are some things you can do to save money, I am not the person to lecture future married people on how to do it. (Except for my sister’s wedding we bought 12 vases from Goodwill for $4 total for centerpieces! Goodwill is an amazing place to buy vases. That is my only trick. And also if you are a bridesmaid, you should look at this website to see if you can buy/sell your bridesmaid dress, because really….you won’t wear it again and someone else can.)

There are a few ways to pay for a wedding:

1. Her parents pay

2. His parents pay

3. Marry rich and your squeeze pays (word of warning: my mom always says it is cheaper (in many ways) to borrow money than to marry for it)

4. Win the lottery

5. Start your married life off with lots of debt

6. Plan for it

I hope you know me well enough that I am going to encourage strategy 6.

Strategies 1,2 and 3 are all things that may reasonably happen….but as a full-fledged adult, it isn’t smart to expect your parents to foot the bill, and I have already shared my mom’s wisdom about marrying rich.

So as an independent, financially savvy adult, you must PLAN for how to pay for your wedding!

Now, this may be less than appealing. Why would you start saving for your wedding when you are still in the OKCupid-induced “I wasn’t sure whether to laugh, cry or run” phase of your dating life? Because you are smart. And you know $18k doesn’t grow on trees. And one day you want to have a wedding with an open bar. 80% of people get married by the age of 40, so statistically speaking, you will probably be one of those people. (No pressure, I’m just reporting facts here).

Here is a hypothetical timeline:

Age 23: Go on date with man who tells you he used to have pet rabbits but he accidentally drowned them.* Swear off of dating forever.

Age 25: Meet man who makes you laugh.

Age 25.5: Begin to suspect that the man who makes you laugh might be the man you want to make you laugh forever.

Age 26: Get engaged.

Age 27: Get married. Have open bar at wedding.

So when should you have started saving for this awesome wedding? Well, it depends on the other factors in your life. If you are having trouble making rent, you need to focus on taking care of the basics. If you are taking care of paying your bills, paying off debt, building an emergency fund and saving for retirement and you still have some disposable income- you can add saving for your wedding into your budget.

If you recall from my amazing post about Billy and Lilly, they saved as though they were still saving for their emergency funds. This is actually the most painless way to save for a wedding- after you have your emergency fund set up, keep saving at that rate until you have set up a wedding fund. You won’t even miss the cashola, because you weren’t used to spending it anyway!

If you feel like one day you are going to get married it is wise to start planning for that financially. You might want to save on your own, if you aren’t sure about who exactly you are going to want to marry (this is very smart but it is not very smart to mention your wedding savings plan on a first date…I would keep it under wraps, if I were you!) or you might want to start saving as a couple. (If you save as a couple you can each save $9k and take some of the pressure off!) One benefit of a long engagement is that you can use the time to adjust your spending for a year or two to save up for your wedding.

The point is- you can take some steps now (regardless of your dating status) to give yourself a financial leg up in the happy marriage department. Starting married life without wedding debt is a wonderful gift to give to your partner and to your future self.

 

 

 

*True story. Them=plural rabbits. I ran away in the middle of the date.

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Things I just Learned about Taxes

Hi readers!

As you might guess, I filed my taxes this weekend. I also have had some big life changes. I am no longer funemployed! My job was supposed to start today but we are having a good old fashioned snow day instead! Kind of a bummer, but now I get to tell you about some of the things that I just learned about taxes.

Along with my new job comes some new benefits. I had to decide on my benefits this weekend, too, so I now have many more thoughts about that.

The first thing I learned was a little bit about how to work the tax system (thanks, Mom!). You know how I told you all that 401k’s are tax deferred? Meaning, you pay taxes on them when you are ready to retire, but you don’t pay taxes on the money now? Here are a few new things that I just learned.

  1. You pay taxes on the amount in your retirement not based on the amount of money you made the last year you worked (ideally, this will be a gazillion dollars) but on the amount of money you take out of your retirement each year when you are retired (ideally, this will not be a gazillion dollars). Therefore, you will pay taxes during retirement based on the tax bracket of someone with your “retirement income.” Which may or may not be lower than your income is now, but you have control over how much you take out, and therefore you can control which tax bracket you are in when you retire.
  2.  You can LOOK UP tax brackets and do the calculations yourself. This may sound like the most obvious thing in the world to some of you, but taxes have always been a big mystery to me and I didn’t realize it can be simple to estimate your taxes. I’m really smart, I swear! I just don’t like taxes.
  3. Because you don’t pay income tax on tax-deferred savings, you are able to put more money into your investments at the start (and you can look up how much more, depending on your tax bracket). This means more money (like, 25-30% more…not insignificant) will be subjected to compound interest from the get-go. So your end result will be much higher than if you had paid taxes on the same amount at the beginning (like for a Roth IRA). Don’t forget that you have to pay taxes when you withdraw your funds, though. There is no escaping Uncle Sam, but you can decide how and when you want to pay those taxes.
  4. When you put money into tax deferred accounts, you can actually calculate the amount of money you will be saving in taxes, so it is a little easier to choose how much to save. For example:

Say I make $80,000 per year. I am able to invest up to 5% into my 401k ($4000). Not only am I getting compound interest (like a boss), but I also am spending less on taxes! Here is the math (based on the 2014 tax schedule):

Taxable income Amount invested Amount owed in taxes Difference from no investment Summary
Without investing in 401k  $80,000  $-  $15,856  n/a $0 invested, $0 tax savings
Investing 2.5% in 401k  $78,000  $2,000  $15,356  $500 $2k invested, $500 tax savings
Investing 5% in 401k  $76,000  $4,000  $14,856  $1,000 $4k invested, $1k tax savings

It is a bit of a balancing act: if you put more into your 401k, you have less cash to spend today, but you also save on taxes (which you can spend before you retire). If you can afford to contribute the maximum into your 401k, you get compound interest, but you also pay less in taxes.

Hopefully this was obvious to all of you, but I had not thought of tax deferred investments as a tool to decrease your tax load (probably because I have never had benefits before….), but there you are- an added benefit to saving for retirement!

My Version of Extreme Couponing

By writing this post I am revealing a somewhat embarrassing part of my budget strategy. While I admittedly love the show Extreme Couponing, I also think those people are a little crazy and I don’t think that extreme couponers offer much wisdom to ordinary people who don’t have access to 200 newspapers and 40 hours a week.

However.

CVS + coupons= AHmazing savings.

And the thing is, it is hardly any effort! I swear.

The first thing you must do to start your CVS savings spree is to subscribe to the Sunday paper. I would do this even if CVS didn’t exist because I like to see what Dagwood is up to while drinking my Sunday morning coffee, but Sunday paper delivery is usually less than $2 per week so even if you don’t read it, it’s not that expensive.

Next you need to sign up for a CVS card. Sign up for email too (even if you are normally opposed to sharing your email). Just do it.

Once you have your CVS card and newspaper in hand (plus coffee and a donut, because it’s Sunday)- look at the CVS circular. There will be a list of sales.

  • Some of the sales will be listed like a normal store- say, “2/$5”. Easy enough.
  • Some of the sales will have a little picture of a black scissors in the corner. This means that there is a coupon IN THE VERY PAPER YOU ARE READING for that product. Also very easy.
  • Some of the sales will give you something called “Extrabucks.” Extrabucks are basically free money to use at CVS on future purchases. You can find them at the end of your receipt after you have finished your purchase. They do expire, so make sure you use them. I keep them in my wallet just like normal cash (I live closer to a CVS than a grocery so it is good to have them when I need to pop in for more handsoap).
  • Sometimes the items on sale will have coupons in the paper but there won’t be a little black scissors symbol, so keep your eyes peeled when you are looking for the coupons that you already know are in there.
  • Almost every week, CVS has a deal on something that is completely free. This week it was a packet of M&Ms. Sometimes it is a roll of paper towels or a tube of toothpaste. CVS wants to get you in the door, and you can get free stuff!
  • Usually the items that go on sale are on sale in phases- so if you see that contact solution is on sale one week, buy it then! If you wait you probably won’t get as good of a deal. This is part of why all of those crazy couponers are kind of hoarders as well- but you are my clever reader and I know that you can be reasonable and realize that you don’t ever need 150 deodorants.

From just checking out the one flyer in your Sunday paper, you can plan a pretty good trip to CVS. But there are a few more tricks that can help you save even more!

  • That crazy price scanner machine at the front of the store is actually an amazing coupon dispenser. Swipe your CVS card at the scanner (before you start shopping!) Good. Now swipe it again. Keep swiping until the machine is out of coupons. That is a little trick from me to you!
  • When a CVS coupon says, say “Save $3 when you spend $12 on hair products,” the $12 is the pre-coupon amount. So say you have 3 coupons for $1 off of a shampoo that is normally $4. You can buy 3 shampoos, apply the $3 off coupon, and then apply the 3 $1 coupons. You pay $6 for $12 worth of shampoo. Totally legit.
  • Those emails that you signed up for will send you awesome coupons in your email. Like $10 off when you spend $30. Or 25% off of your purchase.
  • Sign up for the CVS beauty club (men can do this too). This offer gives you $5 in extrabucks when you spend $50 on applicable “beauty” products- which not only includes makeup but also includes shampoo and lotions. Basically 10% off of certain purchases all the time.
  • If you get really into CVS coupons you can use iheartcvs.com to plan your trips. I find it a little tricky to use, but lots of people love it.

Here is an example of what you can save at CVS with a minimal amount of work (this week, so you can still get these deals!)

-Cheerios are on sale 2/$6, but when you buy 2 your get $2 in extrabucks back. The newspaper had a buy 2 get $1 off coupon, so I paid $1.50 per box of Cheerios. They usually cost $4.50 per box. Yum.

-Men’s Gillette razors are buy 2 get $3 extrabucks. The newspaper had a coupon for buy 2 get 1 free. Each 4-pack of razors was $8.50. I spent $14 and I got $26 worth of razors.

-Women’s Bic razors are on sale for $6.99 and when you buy one pack you get $2 extrabucks. The paper had a buy one get one free coupon, so I spent $4.99 for $14 worth of razors (even better!)

You get the idea. Today I spent $45, got $13 in extrabucks back, and got $112 worth of products. I didn’t have to go dumpster diving for coupons, I didn’t spend 60 hours prepping for my trip, and I only bought things that I need or that I will need in the next few months (not deodorants I won’t use until 2050). Sometimes when there are excellent deals on things I won’t need or don’t use (free diapers anyone?) I donate them to charity, but I don’t let it take over my life or my closet space.

Mainly, I just think of it as a game. If it ever becomes unfun or too much work, I won’t do it anymore. But until then, I’ll keep on enjoying my free M&Ms.

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