I’ve been engaged for over 2 years. Want to know why? It’s not crippling social anxiety or fear of commitment (I live AND work with my partner), it’s because weddings are fucking expensive. According to the Washington Post, there’s a seriously growing demand for wedding loans. In fact, Earnest (an online lending company) reports that demand for wedding loans have quadrupled over the last year and are their fastest growing product offering.
At face value, it makes sense–the church basement and homemade cake don’t cut it anymore. We all want that Instagram-worthy wedding.
I want a gorgeous wedding. I want the cute branded hashtag. However, the last thing we should want is more debt. The average wedding in the U.S costs $30,000, and with many of these loans coming in at 5% – 18%, you could end up paying an additional $5,000 for your one day of bliss.
Before you start filling out that online loan application, let me give you a few reasons to reconsider.
You could use that money as a down payment on an income-producing property.
I know, it’s not as sexy. But the purpose of a wedding is to start building a future with someone. As we’ve learned from crippling student loan debt, starting off your future in the negative doesn’t feel great. Instead of spending $35,000 on one day (including the loan interest), consider using it as a 20% down payment on a $175,000 multi-family property or a house. You can live in one of the units, and rent out the other ones. If you choose to purchase a home, get an extra bedroom or two and rent them out on AirBnb. Real estate is one of the only assets that appreciate incredibly quickly over time, and would be a much better loan than one that will never make you money. Sorry fam, love doesn’t generate lucrative returns.
You could use that money to pay down debt, like your student loans.
I know, even LESS sexy. What better way to own your future than paying down your debt? Getting married can also change your debt payments. If your combined income is significantly more than when you were single, you may find yourself ineligible for a number of income-driven student loan repayment plans. Before getting married (and especially before taking out a loan to get married), make sure you understand what implications it has for your current debt burden.
Used properly, loans should help your future. Not hinder it.
We live in a debt-filled society, but it doesn’t have to be that way. Use loans only when you must and only when it truly benefits you. For example, putting monthly purchases on a credit card that you diligently pay off at the end of every month is smart because you have better predictability of your bank account (this also helps build your credit). Purchasing a multi-family home or securing a business loan is investing in assets that will likely provide you more money in the future. A wedding loan does literally nothing for your future.
What’s the harm in waiting?
I know, waiting isn’t for everyone. I just wanted to remind you it’s an option. In the time I’ve been engaged, my partner and I have managed to purchase our first rental property and pay off all our credit card debt and student loans. Neither would have been possible if we had spent our savings on a wedding.
I’ll leave you with this: The #1 thing couples fight about is money. We already have so. much. debt. Why get into more when you’re taking your first steps together?
Have you had experience with a wedding loan gone awry? Let me know in the comments!