Wealth

Case study: a wedding day that won't break the bank

Learn how Elysia and Tino were able to budget and save for their wedding.

Elysia, 28, and Tino, 29, are quickly learning how expensive weddings can be. Here’s how they managed their finances to sidestep the wedding-debt trap.

The case of the escalating wedding costs

Elysia and Tino are newly engaged and couldn’t be happier. But as they start planning their wedding, they realise that the costs — from the dress to the rings to the decorations — are quickly adding up, and they are starting to feel the pressure. How can they have their dream day without the financial fallout?

Everything starts with research

Elysia and Tino started by researching high-interest savings accounts, so they could put money aside for their wedding. Every month, they contributed $1,000 to their Active Saver account, which was linked to their everyday Freedom Saver account.

They sourced quotes from venues, caterers, musicians and more to get a feel for their expenses, and to learn how much money they would need overall. As they went through the process, they started to identify what represented good value, and where they could save money.

Finding a funding solution

With a strong understanding of their costs, Elysia and Tino used a spreadsheet to create a detailed budget for their big day. As they locked in products and suppliers, they added in the actual costs and payment dates, which helped them track their cashflow requirements. Elysia and Tino’s wedding costs came to $34,000, which they paid for using:

The savings from their Active Saver account, which came to $18,000.
Gifts from their parents, which came to $10,000.
A personal loan of $6,000, which they plan on paying off within their first year of marriage.

A wedding photo of a woman's hand over the man's hand showing their rings

A wedding without the financial fuss

“I’m so relieved we thought about the financial side of our wedding, even though it was tempting to get swept up in the excitement,” Elysia says. “We still had the most perfect day, but now we can start planning for our future together, rather than working our way through mountains of debt.”

By creating a clear plan, putting money aside to cover costs and sticking to their budget, the happy couple were able to achieve their dream wedding without the financial stress — and that’s an outcome we all can toast.

Tips for managing your wedding finances

If, like Elysia and Tino, you want a wedding without the financial hangover, the tips below can help you to budget, save and pay for your big day.

Tips on saving for a wedding

Build a budget

Researching your costs and putting together a detailed budget is invaluable — you’ll know how much you can spend on each expense, as well as how much you can expect the wedding to cost overall.

Prepare for a contingency

Weddings tend to cost more than you think they will, and there will always be expenses you don’t expect. It’s a good idea to add 10 per cent to your budget to cover any surprise costs that pop up.

Get three quotes

It’s a great idea to get three quotes for all your major expenses, including the venue, catering and beverages. Doing so will give you a feel for the market and an understanding of whether you’re being charged a premium for certain items just because it’s a wedding.

Put your savings to work

Make your wedding savings work as hard as possible by placing them in a high-interest savings account. Or, if you’ve already saved a lump sum and have some time before you need to pay your wedding costs, consider placing your savings in a term deposit. In both cases, you’ll earn interest that will help to further grow your wedding fund.

Consider a loan — but think about your money habits

If your savings aren’t quite where they need to be, you may want to consider using a low-rate credit card or personal loan to make up the difference. Always reflect on your spending-and-saving habits though — borrowing money may be fine if you’re quick to pay back the debt, but if you’re likely to rack up large amounts of interest you may want to look at other options.

Don’t jeopardise your financial future for a single day

Weddings are expensive, but it’s also important to consider your financial future. Weigh up how much you want to spend on one day against your other financial goals, such as a house deposit.

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