A wedding costs an average of $28,000, study finds: Here are 3 ways to pay

0

Couples who married in 2021 paid an average of $266 per guest, according to new research from wedding website The Knot. (iStock)

Getting married is a significant commitment, but it’s also a significant financial investment. By the time you’ve exchanged your vows and your big day is over, your wedding can have a huge price tag.

The average cost for a wedding ceremony and reception in 2021 was $28,000, according to The Knot 2021 Real Weddings study. This matches pre-pandemic spending in 2019, although the average cost per guest has steadily increased in recent years due to smaller ceremonies.

Average cost of a wedding per guest

Plus, newlyweds spend an average of $5,000 on a honeymoon and $6,000 on an engagement ring, pushing the total cost up to $39,000. And while some couples may rely on family members for financial help, that’s not always the case.

Keep reading to learn more about how to pay for your wedding reception, like using credit card rewards or taking out a wedding loan. You can visit Credible to compare interest rates on a variety of financial products for free without affecting your credit score.

PERSONAL LOAN SETUP FEES: ARE THEY WORTH THE COST?

3 Ways to Pay Wedding Expenses

It’s easy to get carried away with the spirit of romance when planning a wedding, but it’s important to consider the financial aspect of your nuptials. With a little financial planning, it may be possible to have the wedding you want without starting your debt-ridden marriage. Here’s how:

  1. Save during your engagement
  2. Enjoy Credit Card Rewards
  3. Borrow a wedding loan

Keep in mind that the best way to pay for a wedding may be a combination of these strategies, and read more in the sections below.

WHAT APR MEAN ON YOUR CREDIT CARDS AND LOANS

1. Save during your engagement

Going into debt for a wedding is generally not recommended. The best way to pay wedding expenses is therefore to save in advance to avoid paying interest. To do this, you’ll need to determine your wedding budget — and it’s important to be realistic and plan for unexpected expenses.

You can find ways to reduce your budget, such as reducing the guest list or choosing less expensive seasonal flowers. While the average couple hired 14 vendors for their 2021 wedding, you might be able to pass on expensive details like business invitations or party favors. The Knot offers a breakdown of the wedding budget to estimate how much you should allocate for expenses:

  • Room, catering and rentals (50%)
  • Photographer and videographer (12%)
  • Clothing, wedding dress, hairstyle and make-up (9%)
  • Wedding decoration and flowers (8%)
  • Entertainment, live band or DJ (7%)
  • Wedding planner (3%)
  • Stationery (2%)
  • Celebrant (2%)
  • Transportation (2%)
  • Wedding rings (2%)
  • Gifts for guests (2%)

Once you’ve figured out your wedding budget, figure out how many months you have left to save. For example, if you’re planning a wedding two years in advance, you might have about 18 months before you need to make any down payments. To save $28,000 during this time, you’ll need to set aside about $1,500 per month.

One way to simplify your budgeting strategy is to set up direct deposit of your paycheck into a high-yield savings account, which will grow over time with interest. You can compare savings account rates on Credible to find the right bank to invest your wedding funds.

HARD AGAINST. SOFT CREDIT CHECKS: WHAT YOU NEED TO KNOW

2. Take advantage of credit card rewards

Although you should avoid incurring revolving credit card debt to fund your wedding, it may be possible to take advantage of credit card rewards to save money on wedding expenses or even fund your honeymoon.

If you decide to put wedding expenses on a credit card, it’s important to pay the balance in full each month using your wedding savings fund. This way, you can avoid paying high credit card interest rates that will add to the total cost of your wedding over time. This will require planning beforehand, but a budgeting app on your smartphone may be able to help you track your expenses.

Look for cards with a sign-up bonus and cashback if you’re looking to maximize your savings. If your goal is to help fund your honeymoon, consider opening a travel rewards card that allows you to accumulate airline miles or points for hotel stays.

It is important to note that the best rewards credit card offers are reserved for borrowers with very good or excellent credit. You can visit Credible to compare rewards cards for free without affecting your credit score.

COMMON CREDIT CARD FEES AND HOW TO AVOID THEM

3. Borrow a wedding loan

Going into debt for wedding expenses is generally not recommended, but the reality is that many young couples don’t have enough money set aside to pay for their weddings in advance. If you need to borrow money for your wedding, personal loans offer more favorable debt repayment terms than other unsecured borrowing options like credit cards.

The average interest rate on a two-year personal loan is currently at an all-time low of 9.09%, according to the Federal Reserve. This compares to 16.44% for interest assessed by credit cards. Additionally, unsecured personal loans offer predictable repayment terms, as they are paid in fixed monthly installments over a period of years.

Debt repayment terms for a $28,000 wedding

HOW YOUR CREDIT HISTORY IS IMPACTED BY SOFT AND HARD CREDIT INQUIRIES

Shorter repayment terms offer lower interest rates, but monthly loan payments will be higher. If you want lower monthly payments, a longer repayment term may work for you, but keep in mind that your interest rate and total loan amount will be higher. You can use a personal loan calculator to estimate your debt repayment terms.

Personal lenders determine your eligibility and interest rate based on your creditworthiness, including your credit score and debt-to-equity ratio. Borrowers with stable incomes, low debt levels and very good credit scores of 740 or higher will qualify for the lowest rates available. Applicants with poor credit may not meet the minimum credit score requirements to borrow a personal loan.

If you decide to take out a personal loan to pay for wedding expenses, it’s important to shop around online to find the best possible loan terms for your financial situation. You can compare personal loan rates from multiple personal lenders at once on Credible – it’s free and won’t affect your credit score.

BEWARE OF EARLY REDEMPTION PENALTY FEES WHEN REFINANCING

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Share.

Comments are closed.