Your wedding and your house are possibly two of the most monumental and expensive things you'll ever purchase. Because of their enormity and importance, experts recommend not taking both on at the same time. "Your life together is just beginning, and there's no need to rush into buying a home, which is a huge decision that will impact every aspect of your lives, from your financial health to which job opportunities you can readily choose to pursue," finance expert Elle Kaplan says. But there may be circumstances that require you to pay for your wedding and your first home simultaneously.
And if that's the case, Kaplan has tips to keep you sane and out of debt.
1. "Any smart financial road map must take into account your spending, saving, investing and a buffer to help deal with any unforeseen expenses, and that certainly applies here," says Kaplan. In other words, it's easy to budget for what you expect to spend on both your wedding and home — and even easier to forget to save for emergencies, such as extra guests or a new roof. Padding both budgets with "buffer" funds will keep you from panicking over unexpected expenses.
2. "Remember that not all debt is created equal," Kaplan says. "Taking out a low-interest home loan that you can slowly pay back over time is one thing, but maxing out your high-interest credit cards buying flowers and centerpieces is quite another." It's best to pay for your wedding in cash, so that the only debt you start your marriage with is your mortgage. "Loans are for homes, not weddings," Kaplan says.
3. Set a firm ceiling for wedding spending. "Costs can creep, and budgets are often 'soft' numbers, whereas a ceiling is a hard stop," Kaplan says. "I know many couples who have told their wedding planner, 'My budget is X,' only to later tell me that costs ballooned. So, you need a realistic budget that places your wedding costs well within a range that is healthy for you, and you need an absolute ceiling for the total cost." With a firm budget that doesn't bend, you won't have to borrow funds designated for your home to pay for your wedding.
4. Have open and honest conversations about money with your fiancé before you purchase anything, and during the entire process. "While conversations about money may not be entirely comfortable at first, they are essential, and will ultimately bring couples closer together," Kaplan says. "Couples should be as open and intimate financially as they are physically. Discussions about finances are often discussions about more — values, beliefs, dreams, and goals. Once you're on the same page financially, you'll both be free to start working toward the future you've always dreamed of."