With the eyes of the world media on the wedding of Prince Harry and Meghan Markle this weekend, it’s an opportune time to think about the cost of marriage.
Of course we don’t all get married in St George’s Chapel, with a long list of guests and a longer list of royal protocol to follow. But weddings and the subsequent marriage can get expensive. Making the right financial choices when getting married is really important.
New research from short-term lender Peachy has shown that newly married couples are less savvy with their money than previous generations. In fact, the research found that 70% of newly married couples spent more than budgeted during their first year of marriage.
They found that men are the worst culprits when it comes to planning ahead, as they are four times more likely than women to have no idea how much the first year of marriage will cost. However, women were found to be more likely to overspend than men in these early days. Cost of living pressures can soon reach breaking point with the financial impact of creating a home together, going out on date nights, taking holidays or mini-breaks, and giving each other gifts.
This is important because financial strains can have a negative influence on marital health. Money is a big cause of stress in relationships. A survey by SunTrust Bank found money is the number one cause of relationship stress. Getting your personal finances right can therefore contribute towards a happy marriage.
Perhaps more worryingly, having arguments about money is viewed as a top predictor of divorce. Couples with healthy savings balances and sufficient disposable income are likely to be happier than couples in debt with no spare cash each month.
With proper financial planning and money counselling, newly weds can enjoy smoother sailing in their first year of marriage, creating the foundation of a long-lasting, happy relationship.
Good financial planning for marriage starts with the big day itself. The average cost of a wedding in the UK has risen 9.6% in the last year to reach £27,161. That’s a huge amount of money to spend on a short-term celebration; money that could make a big long-term difference to your personal finances.
There’s little difference in the cost of the ceremony itself for different options, coming in at around £450 whether you say ‘I do’ in a church or registry office. It’s the venue for the wedding reception that will often break the bank, with opportunities to save money by choosing a pub function room or village hall. Swapping a formal sit-down meal for a buffet style BBQ can result in big savings too.
Honesty and clear communication plays a vital role in maintaining a healthy relationship. Talk about your habits, how your upbringing influences your attitude towards money, and your financial expectations.
When it comes to your money, it’s pays to be upfront with your spouse. While you will not necessarily take on your spouse’s debt when you marry, it will have an impact on how much you have jointly available to spend and save. Decide how you will tackle the situation and work together to repay your collective debts.
It can be challenging to work towards shared objectives, even once you’re married. You and your partner are likely to have your own individual goals and needs. If one of you is expecting to save every spare penny and the other has lavish spending habits you will need to work toward a compromise. When you’re married, it makes sense to decide on a joint household budget. Without defining your shared goals, it will be hard to stick to a budget.
Work out your monthly living expenses and subtract this budget from your joint income to decide how much you have left over to save towards your goals and how much you have available to spend. Over a third of newlyweds said they spent ‘a lot more than expected’ in their first year of marriage.
Good financial planning is about spending less than you earn, on a consistent basis. You may think you are able to afford the top of your budget for your first house or car but will this leave you stretched when unexpected costs arise? The ability to cover unforeseen expenses will give you both peace of mind.
If you’re getting married, sitting down with a financial planner to create a long-term financial plan together could be a very wise investment in the long-term success of your union. Do get in touch to chat about how we can help.