The high costs of weddings are causing many couples to re-consider the timing and scale of their big day, according to a study released by Toronto-based Bank of Montreal on Monday, which means some possibly difficult conversations for financial advisors.
“[Clients] that are having big weddings, they don’t have the savings already in place or they don’t have the savings capacity at that time,” says Jason Casagrande, financial planner, BMO Financial Group in Toronto. “It’s having that conversation to say, how do you plan on paying for this once the party is all done?”
Sixty-seven per cent of engaged couples are postponing their wedding due to costs, according to the BMO Wedding Survey. Furthermore, the survey shows that this is an increasingly common occurrence as 31% of people who have been married for less than five years said they postponed an engagement or wedding for financial reasons compared with 15% of people married for over five years.
In addition to talking with clients about their savings plans for the wedding, advisors should also make sure that the bride-and-groom-to-be are on the same financial page. For instance, sometimes one person might be a big saver and be really debt-adverse, says Casagrande, while the other might have no problem with spending money and going into debt to pay for the wedding.
The biggest financial hurdles couples face in paying for a wedding, according to the study, include housing costs, underemployment or unemployment and debt. Despite these obstacles, most couples intend to pay for 53% of the cost themselves through their savings.
When it comes to getting help from parents, on average surveyed couples said they expect family to cover about 19% of their wedding costs. That compares with couples married for over five years who said their family covered 34% of the expenses.
While family contributions may be decreasing more couples are planning to pay for their wedding with cash gifts from guests. The survey found that couples that were getting married soon expected cash gifts to cover 10% of the cost of the celebration.
However, this strategy is not very sound, according to Casagrande, as couples don’t know the financial situation of their guests and shouldn’t depend on something that isn’t concrete. “You’ve really got to plan in the now and not for the what [you] might get, because things change and then what do you do?,” he says. “I usually don’t build the gifts in [the budget] those are usually a nice to have.”
There are several ways that couples plan to cut back on costs, according to BMO. For example, 65% plan to have a smaller wedding, 59% will make their own decorations, centrepieces or invitations, 50% will get a friend to act as a DJ or photographer, 35% will set the wedding during an unpopular day or season while 19% will have a destination wedding.