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Planning a wedding can be an exciting part of preparing for your future, and among the myriad considerations involved, financial matters may be the last thing on your mind. But to be counted among the 50 percent of successful marriages1, it is important for you and your partner to build a strong financial foundation. You can do this by communicating openly about personal finances and expectations.
A good place to start is by sharing the financial decisions surrounding your wedding day, as well as developing a strategy to manage your assets for the long term.
Managing Wedding Day Cost Expectations
The process of planning a wedding provides a crash course in communication, negotiation, and compromise—important skills to have when laying the groundwork for your marriage. Knowing how you will handle wedding day costs and how much to allocate for various services can give you a leg up on the process.
According to recent statistics, nearly 32 percent of couples that have a wedding pay for it on their own; the remainder receive support from their parents. The average U.S. wedding costs $27,852, with an average of $72 billion spent on weddings annually2. How much you spend on your wedding depends on the choices you make, of course. But if you live in a major metropolitan area and are planning a lavish event, expect to pay more.
?A moderate-size wedding includes 200 guests,? explains Jerry Selden, Executive Director for Catering at the New York Palace, ?and the expense varies according to location.? In a metropolitan city such as Chicago or Los Angeles, you may pay as little as $200 per person for food, wine, and champagne, plus significant incidental costs for invitations, flowers, photos, and music—bringing total costs to between $50,000 and $70,000. However, on the expensive side, costs escalate. New York, for example, is one of the most expensive cities in which to hold a wedding because of the high demand for venues and the use of historical buildings and high-end hotels. Therefore, you can expect to pay $300 to $500 per guest, with a total tab between $80,000 and $130,000 for a moderate-size affair, says Selden.
"The most important decisions you will make for your wedding include location, flowers, photographer, music, and food," notes Selden. The location must be able to accommodate the guests for table seating and provide a proper dance floor. For flowers, you might spend as little as $2,000 or as much as $10,000—and if you seek out a celebrity florist, expect to spend $50,000, says Selden. A professional photographer's service fees vary depending on how you want to document the event and the number of photographs, with costs running from $5,000 to $20,000. Additionally, ?many weddings include a variety of musical artists throughout the event,? explains Selden, "from a trio for the ceremony, to an orchestra for the dinner, and then a Latin band for dancing, with costs running from $12,000 to $40,000 total."
Most importantly, says Selden, "it is critical to be comfortable with the people you are working with. Be open to their suggestions, but research options and make informed decisions based on what you want and what your budget allows."
Addressing Financial Concerns, Before and After
Approach the marriage of your finances in a practical way. Recognize that you are merging two lives and agree to disclose your current financial situation—including assets, debts, liabilities, and future goals. This conversation can also help you begin to discuss how you manage your money. By gaining an accurate picture of what each of you is bringing to the marriage, subsequent discussions can focus on how to manage financial responsibilities, long-term planning goals, and whether you will co-mingle your resources or keep them separate while funding a joint household account.
In addition, you will want to discuss the appropriateness and benefits of a prenuptial agreement. "A prenuptial agreement provides asset protection from debt and can provide for children from a previous marriage," states Robert Stephan Cohen, a partner at Cohen Lans in New York City and author of Reconcilable Differences: How to Keep a Marriage Together. "In the event of divorce, it also creates a road map for how the couple elects to take care of each other." Drafting a prenuptial agreement forces couples to have a healthy discussion about the economic power in the relationship, says Cohen.
Who needs a prenuptial agreement? Cohen describes the following circumstances in which one might be beneficial:
Cohen advises both parties to seek the professional guidance and personal representation of a qualified attorney to draft a prenuptial agreement that each individual can support. Whether financial agreements are formalized with a prenuptial document or not, engaging in decision-making that supports communication before and during a marriage can help establish a strong beginning and create a path toward the successful achievement of future financial goals—and in a best-case scenario, wedded bliss.
Wilmington Trust's personal financial advisors specialize in financing options for individuals and business owners.
1 http://searchwarp.com/swa12933.htm, U.S. Census Bureau statistic
2 www.honeymoons.about.com, "Wedding & Honeymoon Statistics," updated 2/06
Updated: January 1, 2013
This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.
© 2013 Wilmington Trust Corporation.