Taking out a wedding loan is one of the biggest financial mistakes a couple can make.
With the wedding season upon us, brides and grooms are going to be shelling out big money to get married. U.S. couples spend on average more than $28,000 for a wedding, with the average wedding in bigger cities costing as much as $50,000.
These numbers don't even include the honeymoon, engagement ring, bridal consultant or wedding planner, all of which can add tens of thousands more to the cost of a wedding.
In the past, families of the bride and groom typically helped out with wedding expenses, but with the prices of weddings so high and people waiting until later in life to get married, it's becoming more common for the bride and groom to pay for part or all of these expenses.
This is fueling the growing trend of couples getting wedding loans.
Both secured and unsecured wedding loans are available, and loan amounts can vary greatly, from as little as $1,000 all the way to the high five-figures.
In most cases, even couples with good credit will need to pay double-digit interest rates for a wedding loan, and many will carry interest comparable to what a couple would qualify for with a credit card.
While getting a wedding loan may seem like a good way to bridge any shortfall a couple has, it's one of the biggest financial mistakes they can make. There is nothing worse than starting off married life tens of thousands of dollars in debt, especially if student loans and other debt is also being brought into the marriage.
The entire amount paid for the wedding will disappear in a day, and if the wedding is paid for with a loan, the couple could be paying for that day years down the road.
Any couple that has to get a loan to pay for a wedding is setting itself up for money troubles in the future. Avoiding the wedding loan will force a couple to deal with financial issues before marriage, which can go a long way to eliminating money as a major marital problem.
Here are three alternatives to wedding loans:
If you were told that skipping your wedding would mean you could have $1 million dollars, would you do it? That can be the result if you decide to elope instead of going into debt for a wedding.
If eloping is an option, it is financially by far the best one.
Forget all the trappings of a wedding and save yourself tens of thousands of dollars that you can put toward more important financial dreams (a down payment on a house, retirement accounts, etc) the two of you have.
If you have your sights set on a wedding that costs a specific amount and aren't willing to compromise on it, think about delaying the wedding until you have the money to afford it.
This could be an excellent time for you and your betrothed to discuss financial issues together and how you are going to accomplish your goal to save the money needed.
Once you succeed, you will have laid the foundation for reaching your financial goals in the future and have a good understanding of how to work together to reach these goals.
Another option is to do away with a wedding's budgetary excesses. Budgeting is another indication of how a couple is able to compromise on money.
Make sure that you keep strictly to a budget that you can afford, and don't let all those small costs creep up and ruin it.
On the bright side, if you can compromise and learn to budget together on the wedding, you will be in excellent shape to do the same in all the other financial matters that arise during your marriage.
While these three options may seem unromantic when it comes to your wedding day, consider the alternative.
Taking out a wedding loan will likely mean years of fighting over money while you pay the loan back. How romantic does that sound?