The Cost of Marriage: Effects of a Wedding on Your Financial Life

Understanding the Financial Impact of Marriage
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Introduction:

One of the advantages of the advent of the internet and the increase in social discourse around money, is that we are being more open about the implications of some of the larger life and financial decisions we make. We think more critically about what is important to us, and we’re more honest about the actual cost of such events. 

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Getting married is a particularly interesting one to talk about - everyone thinks and prioritises differently, and so you first have to think about two things. Firstly, how important a wedding is to you, and secondly, how much you can afford to spend on your wedding.

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Setting a Wedding Budget: Key Considerations

So how do I know how much I can afford to spend on a wedding? There are a number of factors to take into consideration. You should first think about the following:

• Your combined income
• Any outstanding debts
• Your savings
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Secondly, how much you then spend on bills, living expenses, other discretionary expenses, friends & family, travel and leisure. The difference between these two categories, if you don’t keep track of it already, will give some indication of your “spare” money that you can put towards a wedding.

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You will want to start saving for this well in advance. You may also want to consider the possibility of having some help from family. Often it’s the parents of the married couple who make up a large proportion of the budget contribution, so have this discussion earnestly and honestly well in advance of starting to plan. You don’t want to start choosing venues or honeymoon locations and then have the rug swept from under you when you discover that your parents won’t be helping.

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If you make a list of priorities, in order, then you can work out where the money will go first and what the non-negotiable things are that you won’t be able to go without.

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Major Wedding Expenses: Where Your Money Goes

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Here are some of the things you’ll want to budget for: 

• Registry office fees
• Ceremony & reception venues
• Legal fees
• Catering
• Dress and attire
• Rings
• Entertainment
• Photography
• Flowers & Decorations

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If you make a rough guest list at this stage, you know how many people you will be buying this all for, and can get a more accurate estimate of what the budget might be. Always remember to leave some headroom for backups or unexpected expenses that could arise. If you also group expenses into categories, you can see where the largest line items are if you need to cut down the budget as the day draws closer. 

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The Hidden Costs of Weddings: What to Watch Out For

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You will almost certainly be tempted to overspend on certain parts of your wedding. Which is totally fine, as long as there is an understanding that this will have to be balanced by some compromise elsewhere. You could have better food for example, but reduce the number of guests you have attending. 

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It’s the small things that add up and cause you to go over. So make sure you’re really detail oriented about making your budget, down to all of the finer details. Speak to friends who have been married and can give some insights into things to look out for. 

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Financial Planning for a Wedding: Tips and Strategies

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There are a few simple ways of reducing the cost. You can firstly, and most easily, reduce the number of guests. You can also go off-peak rather than during the most expensive parts of the year, or choose a week day rather than a weekend wedding. In the UK, catering costs an average of £70/head and the average guest list is between 80 and 100 people. So cutting from 100 down to 80 could reduce the cost by £1400 alone! If you don’t want to completely exclude people, you could invite them only to the reception. 

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It won’t be popular, but you can also go second hand for some things - wedding dresses and suits in particular. 

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You can also negotiate with vendors - sometimes telling them that it’s for a different event rather than a wedding (where possible) can help to reduce costs. Many increase their prices because they know people are ready to pay.

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Tax Strategies

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There are a couple of interesting tax strategies that are opened up by marriage. The marriage allowance is paid to couples in the UK in the case where one is a basic rate taxpayer and the other doesn’t earn enough to pay tax. It involves a transfer of 10% of personal allowance from one to the other, meaning you get to keep an extra few hundred £ of your family income. You can apply at the link here https://www.gov.uk/marriage-allowance

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Your inheritance tax allowance is also joined together with your spouse, meaning that as a couple you get a total of £650k, rising by a further £175k if this is a main residence that you’re passing along. 

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Rental property or other income generating assets can also be passed to your spouse, who, if they’re in a lower income tax band, will end up paying less tax on the proceeds. Note that this can’t be done by word - a Deed of Gift will have to be completed. The same can be done for capital gains tax, where you can pool your allowance. 

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Wedding Debt: How to Avoid Common Pitfalls

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Note that if you marry someone who has outstanding debts, you will not be held liable for them by the lender, whether this be credit card debt, loans or other. However, if you take out any form of joint debt, before or after getting married, and you will both be equally responsible for paying back all of it.

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Post-Wedding Finances: Managing Your Money as a Married Couple

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Marriage isn’t the end! You should conduct regular (at least monthly) financial reviews with your spouse to ensure that you are both spending within your family means, discretionary spending is in line with your expectations, and that you are saving and investing enough to ensure the future of your family or children over the long term. Using a software platform that you both have access to, in order to review this, is probably the easiest way to do this. 

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At Strabo, we’re building investment management software not just for individuals, but for couples, families and financial advisers. So you can feel safe in the knowledge that your long term financial plan can have contributions from every party you want, and increase its chances of success. Share your dashboard with your partner as a tool for your monthly review, let your adviser log in remotely to review your progress, and receive configurable weekly updates by email to see your progress each Sunday.

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Conclusion: Balancing Love and Money in Marriage

So there we have it! Of course, there is no substitute to marrying someone who sees eye to eye with you on financial matters, but there will never be total alignment so it’s vitally important to get the discussions out of the way early. Talk about how important a big wedding is to both of you, how much of your discretionary income you’d like to spend, whether you have any family who want to contribute and beyond that, what your family strategy is to provide for the long term. As always, thanks for reading and we can’t wait to hear about how you’re using Strabo to streamline your family finances!