Why borrowing for a wedding is a bad idea

I enjoy weddings. I’m just not sure how much I’d pay for one.

That thought was prompted by reading recently that the typical wedding in the United States costs around $30, 000 these days. Now, I’m a little skeptical about that number. After all, there is whole cross-section of businesses dedicated to promoting the idea of big weddings. I think of it as the wedding industrial complex. It is in their interest to promulgate figures that suggest it’s perfectly normal to spend a small fortune on a wedding.

Still, whether or not $30, 000 is an accurate figure, the fact remains that many people spend far too much on their wedding. It could be seen as a welcome sign of prosperity, except that these are not prosperous times. No, we are living with an epidemic of people struggling to pay their student loans and failing to save for retirement. So really, it is worrisome to see couples start their lives together by taking on a heaping helping of debt.

There is even an entire category of personal loans called wedding loans. It is worth looking at how those stack up relative to other options for financing a wedding; but also, I can’t resist the urge to follow that up with reasons not to borrow money for a wedding in the first place.

Compare wedding financing options

Here are some of the ways you can borrow to pay for your wedding:

1. Credit card. Wedding expenses tend to come up over a period of time, as deposits have to be made, dresses and tuxedos bought, etc. These periodic expenditures make it all too easy to fall back on a credit card as a handy way to pay. But don’t forget that credit card debt is extremely expensive and interest rates are likely to be especially high for young couples with limited credit histories.
2. Personal loan. At around 10 percent, personal loan rates aren’t exactly cheap, but they are lower than most credit card rates. Also, debt repayment is structured, which makes it easier for borrowers to stay on track toward timely repayment.
3. Home equity loan. If you are lucky enough to already own a home by the time you get married, a home equity loan is a cheaper way to borrow than either credit cards or personal loans. Just be sure you feel confident in your long-term job security, because using your house as collateral really raises the stakes of borrowing for your wedding.
4. Line of credit. Another option is a line of credit, which may be either unsecured or secured by equity in your home or some other asset. (Again, secured loans are generally cheaper, but they put your collateral at risk.)
   There are pros and cons to using a line of credit to finance a wedding, though. Since you don’t pay interest until you actually use the line of credit, this approach can be well suited for the way wedding expenses don’t all come up at once. On the other hand, having access to a line of credit can make it too easy to make spur-of-the-moment upgrades or additions to your wedding plans, which can send your costs soaring.

Why going into debt for your wedding is a bad idea

So now I get to be the wet blanket and tell you why you should not borrow to pay for your wedding:

1. Long-term debt is bad for short-term expenditures. Borrowing for assets like cars and houses makes sense because the useful life of the asset outlasts the repayment period. However, borrowing for short-term events like vacations or a wedding means taking on debt without an offsetting asset.
2. Don’t feel you have to prove anything. Make the wedding entirely about your commitment to each other, and not about showing off for friends and family.
3. It’s really easy to overpay. Most people don’t have a lot of experience with weddings, so they are essentially sitting ducks for the professionals who make their living in that industry.
4. Saving could tell you something about each other. Being disciplined about money will help your marriage work, so why not find out how well you can manage this kind of thing together by waiting and saving up to pay for the wedding?
5. Multiple debt layers could become a strain. When you think about it, it often takes 15 years to pay off student loan debt. After you are married, you may want to buy a house, for which you will possibly need a mortgage. Do you really want to create a third layer of debt by taking on a wedding loan?

I don’t have any formal data on this; but given the way celebrity marriages often turn out, I get the impression that there might even be an inverse relationship between the cost of a wedding and the length of the subsequent marriage. Then again, that impression might be skewed by the fact that my own low-budget wedding has led to 29 wonderful years of marriage, and counting.