Whether you’re planning a small, intimate ceremony or want to party in lavish style, a wedding might cost more than you think. Without careful financial planning, the vows ‘for richer, for poorer’ could come into play sooner than expected.
How much will a dream wedding cost?
The cost of getting married is on the rise, with happy couples in the UK spending an average of £27,161 on their big day – that’s higher than what the average Brit earns in one year, and equivalent to the cost of a house deposit¹.
Of course, you can get married for less, or you can part with a lot more. With the most expensive wedding dresses costing the same as a house in London, it’s easy to see how weddings can cost millions.
The big-ticket items won’t come as a surprise; couples are happy to fork out for the perfect venue, honeymoon, food, engagement ring and drinks. Add in the dresses, tailored suits and the band and it’s easy to see how the costs start to stack up.
It’s no wonder over half of couples pay for their wedding with the help of their family – even if the tradition that the parents of the bride pay for the wedding no longer rings true. Just 18% of parents now pay for their child’s wedding in full².
Without careful planning, many people are willing to go into debt for the fairytale wedding. Fast-forward six years and nearly a third of couples are still paying off their debts, data from the Debt Advisory Centre shows.
Whether you’ve had the intricate details of your perfect day planned since you were in primary school or not, it’s important your wedding day is right for you.
This is why planning is so crucial. If you only start saving once you’re engaged and want to get married within a year, you won’t have very long to build up your wedding fund.
As a couple you’ll need to earmark £2,263 a month to build enough to afford the £27,161 average spend in 12 months. That’s just not realistic for many soon-to-be happy couples.
Whilst you might not want to sacrifice the abstract folk band you saw on your first date, you have to decide whether it’s worth sacrificing your future family financial wellness for this one day.
Five tips to save for your wedding
Planning for a big day should be fun, not stressful, but with such a high expectation from society, where do you start? Follow these five tips and the most difficult decision will be who takes whose name.
1. Start early
The sooner you start saving the better, whether you can only afford £50 a month or £500. The longer you have to save, the more you can do with your money.
If the wedding is two years or more away, you can make your money work harder for you on the market. Investing is a good way to stop inflation eating into the purchasing power of your cash.
And the longer your money is invested, the harder it will work. Over time, the returns earned on your initial investment can be reinvested and earn their own returns – this is a process called compounding and is one of the most powerful forces in investing.
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2. Plan your investment strategy as if it’s your big day
To ensure your portfolio is the right vehicle to help you afford the wedding of your dreams, you need to make sure your investments reflect your tolerance to risk. This boils down to what you’re investing for, when you’ll need your money, and your personality.
The more time you have to invest, the riskier you can afford to be with you investments, as you’ll have more time to recover if your investments do slip in value. The riskier your portfolio, the higher returns you can expect – but the further your investments also have to fall.
This can be a tricky thing to get right, luckily with Moneyfarm we do the hard work for you. All you have to do it fill out a questionnaire and we match you to a portfolio built specifically for your risk tolerance.
3. Invest little and often
Instead of investing in one lump-sum, try to top-up your account little and often. This will smooth out fluctuations in an asset price, maximising your returns. If you set up an automatic direct debit to take out £300 on pay day each month, you’ll never forget to put the money aside.
4. Watch out for fees
Investing can help you protect your cash from the impact of inflation and grow your money for the future. The last thing you want is for your management and platform fees to eat into your profit. This can seriously weigh on what you have at the end to spend on your wedding, and could mean sacrificing something important.
Expensive management fees aren’t a fact of life any more, and many investors are now looking to low-cost digital wealth managers to help them reach their financial goals.
5. Maximise your returns with an ISA
Protecting your returns in a stocks and shares ISA is one of easiest ways to maximise your returns. A tax-efficient savings scheme, an ISA is essentially a wrapper that protects your savings and investments from the taxman.
You can put up to £20,000 in your ISA each year, and all of the interest, income and capital gains generated from your investments can grow tax-free.
You chose whether you want to put your money in a cash ISA or stocks and shares ISA – or a combination of the two.
1 Hitched, what Makes a 21st century bride?
2 Dads, rejoice! You no longer have to pay for your daughter’s wedding, Telegraph, November 2014