A five-step strategy for newlyweds facing wedding debt
(TORONTO, ON) – A mountain of debt is a miserable wedding gift, but it may be the reality for many newlyweds this wedding season. Studies show that couples often underestimate the cost of their wedding, and experts worry that credit cards are bridging the gap.
A look at some recent wedding statistics paints a pricey picture:
- Canadian couples plan to shell out an average of $15,000 for their wedding (BMO).
- Couples plan to handle 60 per cent of the costs, relying on credit cards (13 per cent), parents (13 per cent), and gifts (5 per cent) to cover the rest (BMO).
- Last year, the average wedding actually cost $31,110, including the honeymoon (Golden Girl Finance).
- Forty-one per cent of young couples say financial stress is affecting their relationship (MNP).
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, worries about what happens when romance gets the better of finance.
“Some people plan their weddings for their whole lives; it holds a tremendous amount of emotional significance,” says Schwartz. “But I worry that too much focus on heart strings means less focus on purse strings, and the results can be costly.”
According to Bridal Guide magazine, there is a long list of “extra” expenses that couples fail to take into consideration, such as bachelor(ette) parties, the marriage license, dress alterations, and more.
“The question is,” ask Schwartz, “after you’ve been blindsided by surprise costs, and your credit cards are still smoldering, what can you do to rapidly and efficiently get out of debt?”
Consolidated Credit has put together a five-step strategy to pay off wedding debt to help get the marriage started on a financially fit note:
1. Survey the damage – Check out your online credit card statements and know exactly where you stand. Set a goal and aim to pay down your wedding debt by a certain date. Being debt-free sounds like a great first-anniversary gift!
2. The gift of debt repayment – Cash gifts are a convenient way for wedding guests to give a financial leg-up to the bride and groom. Using this money to pay down debt may not be the most exciting use of cash gifts, but it might be the smartest.
3. Build a newlywed budget – “A new life together” means it’s time to reassess your spending and financial priorities. Having a conversation about money is a relationship-saver at any stage of the game, particularly if you are starting your married life in the hole. Follow Consolidated Credit’s recommended budgeting percentages and stick to your plan.
4. Lay off the leisure – Between the celebrations, the clothes, the food, and the honeymoon, your wedding was probably some of the most expensive fun you’ve ever had. You can probably afford to cut back on a lot of discretionary spending. Drastically reduce your entertainment budget and use extra money to pay down debt.
5. Accelerate your payments – Repaying your credit card debts by only making the minimum monthly payments will get you nowhere fast, thanks to high interest rates. Consolidated Credit’s credit card debt calculator shows how even an extra $50 or $100 per month can dramatically cut repayment time and interest charges.
“Putting wedding debt behind you as quickly as possible will help set the stage for the next big financial milestones in life,” adds Schwartz.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Jacob MacDonald, Manager of Community and Public Relations, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041 , C: 647-390-5253 , F: 416-915-5200 , E: [email protected]