Part 3: Finding the total amount – specifics
In Part 1 of this series, we discussed how not to decide your wedding budget. Part 2 laid down some ground rules about how to figure out what your wedding budget should be. In Part 3 today, we get down to specifics.
First, have a budget for your general life
These are all the things that come before wedding expenses. You know how it goes, you need numbers on the following:
- Utility bills
- Transport costs
You should also be devoting about 20% of your income towards something long term (like your retirement, or house deposit), and if you don’t have an emergency fund, you should be saving for that too.
The broad percentages work out something like this:
20% long-term saving or investing
30% bills and day to day discretionary spending
This leaves about 20% for your medium-term savings. Your wedding is going to be paid for out of this. If you like, you can split this 20% and devote some to your wedding, and some to other medium terms goals you have (ok, so I really like to travel. And, you really should have an emergency fund. Also, gift-giving season is coming again, just like it does every year…).
Provided your rent or mortgage is not gobbling up too big a portion of money, and you are not in a crazy debt situation, and you are devoting a good amount to your long term financial future, 10-15% of your income is a good rule of thumb for figuring out how much is wise to devote towards your wedding.
It’s a fun exercise (uh, for those of us who are geeky this way) to look at the budgets of weddings online or in magazines – that is when you can find them, which granted isn’t that often* – and reverse engineer the budgeting steps to figure out what kind of income can really support that kind of wedding.
For instance, roughly $20k is considered to be a relatively modest sum to spend on a wedding. To pay for this by devoting 10% of your income for a year, you need an annual income of 200k (hmm, and that’s not including tax). BOOM! Let’s say the couple in question doesn’t have any other medium term savings goals, and they devote a whole 20% of their income for a year towards it: they need 100k in income a year. To pay for a 30k wedding? That needs annual income of 300k at the non-extravagant end, or $150k at the we-are-saving-hard end. BAM! That right there is the sound of our commonsense smacking up against what the wedding industry is trying to sell us.
*Damn if this issue isn’t worthy of a whole post of its own.