I’ve shared a number of tips and tricks on how to keep a wedding on budget – and believe you me, I’ve used everyone of them and then some the last few months! But it occurred to me that I hadn’t shared my very best budget trick. It’s as simple as this: We spend cash on all wedding purchases. We believe in this so much that we chose to have a longer engagement so that everyone could save their pennies. I know using cash isn’t always possible for everyone*, but with the rest of the world pushing you to get a wedding credit card, I thought I’d tell you why this works for me.
- We are more emotionally attached to cash then to credit, which feels a bit like free money (whee, I’ll pay it back when we’re married and are making more money!) When I look at something I love, like say invitations, and think to myself “Yes, $2,000 is a lot more then I was planning to spend, but in the long run it’s not that much,” I sort of believe my own logic… until I pull out my debt card that’s attached to my savings account. I know exactly how hard I worked to put every penny in that savings account, and I look at my debt card, and I turn around and walk out of the store. A credit card would not hold that power for me. If your parents are helping you out with the wedding, I suggest that if they can do it, you have them send you a check for their contribution (incrementally, if they need to). Put that money in a money market fund for the wedding. It will then emotionally become your money, not free money, and you’ll feel exactly the same way about spending it.
- Compound Interest. I know, I know, but I have to do this math with you. Let’s say you charge $5,000 in wedding expenses, and you plan to pay it off in 5 years, on a credit card that has a 14% APR (the average in the US). By the time you have paid off your bill (if you make no additions or subtractions to that amount over time), you paid $10,028. What just happened to your wedding budget? Is that a Kaboom that I just heard? You can calculate this here, just remember, most credit card interest compounds at least once a month.
- If none of this helping you stay on budget, try taking it one step farther. Instead of paying with a debt card linked to your cash account, pay with real live greenbacks. Watch, and see how putting down 50 one-hundred dollar bills for a dress makes you feel. I thought so.
* I really really do know that spending cash is not always possible for a wedding. If you are paying for some or all of your wedding on a credit card, please do not take this post as any sort of judgment. If I believe one thing about weddings, it’s that each couple needs to trust themselves to find the best path for them. I just like to point out the practical paths that no one seems to be talking about.