GRAND WEDDING. Night view of the Odescalchi Castle in Bracciano, Italy. Hollywood star Tom Cruise and actress Katie Holmes tied the knot at the storybook Italian castle before glitterati from the worlds of cinema, sports and music. Ordinary folks, however, may have to make do with much-simpler weddings to ensure financially happy marriages. AFP file photo/ ALBERTO PIZZOLI.
TAKE CHARGE OF YOUR MONEY Before you say goodbye to bachelorhood
INQUIRER.net First Posted 09:32:00 04/22/2008
(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)
Question: My girlfriend and I have been together for the past four years. We’d like to get married, of course, but when I think about the financial responsibility looming before me (e.g., have a big wedding, book a nice honeymoon spot, build a house, raise kids, etc.), I get overwhelmed. I only make enough for my lifestyle now. How can I support a family? What do you think should a bachelor prepare for financially before thinking of marriage? – Dan
Answer: Dan, you are on the right track. The fact that you are counting the costs before taking the big plunge shows that you are a responsible man. Sad to say, there are many who go into marriage hastily without determining first how prepared they are mentally, emotionally, spiritually, and financially.
It is true: marriage is expensive, and we’re not just talking about the wedding. To embark on a new life together with one’s spouse means starting a family unit. That means the bulk of the financial burden rests on the husband — society dictates that he should support his family’s needs from food, clothing, and shelter, to education and health care, among others.
Given that you make only enough to support your lifestyle, it is easy to understand why you are overwhelmed with the whole idea. But if you wait for the day when you have enough wealth to last a lifetime, you may find that your bride-to-be has decided to stop waiting.
How do you know when you’re financially ready? Below are our guidelines on how to determine your financial readiness for marriage:
1. You have a stable job. That means you are a regular employee, not on a contractual or probationary basis, and that you see a career path for you upward in your company. Or, if you are self-employed practicing your profession or running your own business, your practice or business is already stable and has been bringing in steady income for a number of years already.
Why is this important? This will ensure a steady income stream for you and your family. And this income has the potential to even grow over the years.
2. You have enough savings. That means you do not live from paycheck to paycheck. But just how much is enough? You have enough savings to start a family and plunge into marriage when you have built up savings to cover at least six months’ worth of your projected family expenses. This is your emergency fund.
Apart from the emergency fund, you should have also shored up a substantial fund to finance a simple wedding ceremony and reception.
3. You know how to manage your money. Don’t think that it will be up to the wife to manage the family funds. You have to know how to manage money yourself.
And how does one manage money well? Here are the musts:
a. You are not in deep debt. If ever you are in debt, payments for it must not go over a third of your monthly take home pay. Beyond this, you are in a not-so-safe mode, so defer marriage until you have paid off or pared down your debt.
b. You know how to budget. That means you don’t splurge your earnings, but set aside money for savings and other essential costs before spending anything else. You know your priorities, and that also means you don’t buy impulsively.
Now even if you have passed the test of financial readiness, you might still be fidgety about the forthcoming wedding expenses and keep asking yourself, “Can I afford it?”
Well the good news is, people are more enlightened now and it matters more that you have a stable life after the wedding, rather than have a big wedding now and hardly have enough funds for day-to-day expenses for the next two years.
You might both agree to have a simpler wedding than initially planned. To save on costs, have a breakfast reception rather than a dinner reception, for instance. Book a small chapel rather than a cathedral. Instead of having the reception at a five-star hotel, choose an intimate restaurant or party venue. Have a simple program rather than an all-night long dance party with a popular band. Go to a local vacation spot rather than travel abroad for your honeymoon. There are many ways to save on costs.
If you feel that your funds are still not enough for a nice wedding, talk to your wedding sponsors. In lieu of traditional wedding gifts, they might consider footing the bill for some expenses.
And to help with the cost of building a new life together, encourage your wife-to-be, if she is not working now, to get a job or start a small business. Any added income, no matter how small, will help your future family be more stable financially sooner.
(INQUIRER.net and Citibank invite readers to ask questions regarding financial matters. Send your questions to personal_finance@inquirer.net or comment through our personal finance blog called MoneySmarts )
*Disclaimer: Readers are solely responsible for their own investment decisions and should thus conduct their own research and due diligence and obtain professional advice. INQUIRER.net will not be liable for any loss or damage caused by a reader's reliance on information obtained from our web site. INQUIRER.net receives no compensation of any kind from companies or industries or funds that are mentioned here.
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