Expensive Wedding Reception is a Poor Financial Decision

Is an expensive wedding real worth it?

I think spending a fortune on your child’s wedding reception is one of the worst financial decisions you could possibly make. The opportunity cost of what they could have at retirement had some of that reception money been put toward long-term investment is HUGE. There are a few other reasons this might not be good for the newlyweds.

I’m of the age where I am just starting to go to weddings of my friend’s children. As Certified Financial Planner, I can’t help but evaluate what people spend on the post party to life’s greatest ceremony. I thought a wedding was about the couple getting married (their wedding vows), not the post party.

I have several thoughts about this that won’t be well received by some, but my DNA as a frugal guy and a planner greatly shape my thoughts.

Before I get into the math of this financial decision I share that my perspective is from a couple that paid for their own wedding. I got married when I was 31 and my wife was 27. While living in Lincoln Park, Chicago we were engaged in November and married the following August. Given that relatively short window to save gave us a great financial challenge. I moved back home to live with my parents so I could save more money, not just for our wedding, but also toward the down payment our first home. My wife also squirreled away as much as possible working full-time as well. It was eye-opening to see how much we could save (how little we needed to spend) when we put our minds to it. It was great for our marriage and our frugal ways have been great for our family. We paid cash for everything. No debt.

As I’ve written about before one of the hardest thing to do is to not spoil your kids financially when you can afford to say “yes”. It’s starts when they are little and you can afford to buy them a $100 pair of gym shoes, boutique store clothes or the newest iphone. For many parents living paycheck to paycheck saying “no” more often is out of necessity. Paying for a big wedding is never even a consideration.

How I Raised My Kids to be Financially Successful at Their Expense

The ultimate saying “yes” to your child is the BIG Wedding Reception. It starts with the venue, the date, the dress, food, music, open bar, etc.. The range of cost for all of this is HUGE.

My belief is the best decision for parent’s that can afford to help out is to give your children a flat amount of money and let them figure it out. It is an amazing opportunity for the soon to be newlyweds to do real financial planning decisions with a finite amount of money. Of course, if you are spending your own money on your wedding reception, then that goes without saying. We saved a lot of money by getting married on a Friday. having a DJ, a buffet style dinner and open bar for three hours, cash bar after that.

We and our guests had a blast at our reception and we paid a fraction of what many people pay for their wedding reception. Twenty three years later, it’s hard to remember the reception details and it wouldn’t have made the reception party any better or more memorable had we spent another $10,000 or $20,000 on it. It would have had a huge negative impact on our finances at the time though. The savings went toward the down payment on our first home. That was a difference maker for us.

I often wonder if it’s about the nuptials or the party. I wonder if the excitement of the reception overwhelms the meaning of the actual wedding. Unfortunately, I’ve been to some of the grandest and most expensive wedding receptions only to have marriages end in divorce within the first several years. I wonder if the parent’s have any regret in that case.

Is it about the parents wanting to celebrate and impress their friends? It may be. If you have the dough and want to party then good for you. It’s your money!

How Much Does a Wedding Cost?

I wouldn’t be surprised if $50,000+ was a more typical wedding cost in the Chicago suburbs.

As I look at the average costs for all the items above I’m reminded that I have two daughters and will be helping out with some of this, but they will also be paying for a good chunk of their wedding reception. We will give them a lump sum and that will mostly cover the costs of our guests. We will also give them a post wedding gift they can put toward their first home or possibly invest the money.

What if loving parents with the financial means spent less on the wedding reception and gave their newlywed a post wedding gift to invest for their retirement. This allows for the couple to make some tough decisions, probably their first as a couple.

Post Wedding Gift S&P 500 Rate of Return Retirement Value 40 years

$10,000	9%	$314,462
$20,000	9%	$628,566
$30,000	9%	$942,650

If you had budgeted $60,000 for a wedding, what if you gave them $30k for the wedding and invested $30k for them? Wouldn’t that be a win/win with a ton more potential positive impact.

Please don’t take this as judgmental. People can spend their hard-earned money on anything they want. I just can’t help myself and have to point this out.

In my line of work, I know that most people have so little money saved compared to what they have earned that an extra $3-$900,000 would make being financial independent much more attainable.

It’s easy to get caught up and whisked away in the moment. The excitement and joy with a child’s wedding must be amazing! I just think the focus should be on the nuptials and less so on the party costs.

I’d love to hear your feedback about this post.