Question from 27-year-old living in Toronto: I make $45,000 a year and I’m a bridesmaid in three weddings this year. Each bachelorette party involves a weekend away and will cost me about $700 each. The bridesmaid dresses are about $250 each. I still have the wedding showers to get through as well. Each will cost me about $80 and I’ll probably give $100-$150 per wedding as a gift. All in, I think this is going to cost me $3,540 and all of the weddings are within the next nine months. I stopped my RRSP contribution of $100 a month to save up $1,000 towards the weddings and can only save $200 a month going forward – my rent is $1,500 and I’m single. How can I survive this financially? I don’t want to use my line of credit, but don’t see another way.
Answer from Shannon Lee Simmons, a financial planner and founder of The New School of Finance in Toronto: Whoa. That’s a lot of weddings for someone to attend, let alone be a bridesmaid in. You must be a great friend.
Weddings are super expensive, and not just for the happy couple. Here are some tips on how to survive wedding season without going broke.
1. Calculate what can you save as early as possible.
You’ve already done a great job of trying to save ahead of time. From the moment someone asks you to be in a wedding party, you should start saving, if you can. First, see if you can cut down on your expenses between now and the wedding so that you don’t have to reduce the amount going towards things like debt repayment, tax-free savings accounts or registered retirement savings plans. Tally up all the costs you expect to pay: engagement party, shower, bachelor/bachelorette party, wedding, outfit etc., and divide by how many months there are until the wedding. For example, if you found out about these weddings 18 months ago, you’d need to put aside $200 a month ($3,540 divided by 18 months) in addition to the $100 to your RRSP. It was wise of you to stop your $100 to your RRSP so that you could redirect it to help pay for this wedding season. It’s better to save up and avoid high-interest debt than keep saving for the long term. You’re very young still with lots of time to save for retirement. In the next six to nine months, you’ve got bigger fish to fry.
2. Say no to overspending where you can.
It’s awkward to say no when weddings are concerned. No one wants to feel like they aren’t supporting their friend or loved one for their special day. But, there comes a time when you may need to say “I just can’t swing that financially.” If the bride or groom are planning an extravagant bachelorette or bachelor party you can’t afford, you need to tell them. Be vulnerable and honest in a private conversation. Try something like “hey, your bachelorette weekend sounds amazing. I really want to go and support you but I’m trying to get my finances in order and I can’t do it all financially. What else is possible?” See what they say! Maybe they will surprise you and change the plan. Maybe they will totally get it and understand if you can’t come at all. Maybe you can go for one night instead of two. By trying to reach a compromise together, hopefully you can find a way to support each other without hurting feelings or going broke. Be sure to have this conversation early so it doesn’t lead to resentment on either side.
If nothing else is possible and your friends are set on a specific plan, let them know that you support them. Chip in what you can towards their weekend. Maybe send a bottle of bubbly to them at dinner.
3. Know when to say no to being in a wedding party.
Being in a wedding can be so much fun. But, it is expensive – especially these days. Saying yes is a big financial responsibility. When someone you love asks you to be in their wedding, be sure to crunch the numbers before you say yes. If you can’t afford to save up for all the costs of the wedding, you may need to decline. My rule of thumb is that if you must use debt to be in a wedding party, make sure you can pay it off within three to four months after the wedding. If that isn’t possible, you can’t afford it and you need to be upfront about that from the get-go.
In terms of your own specific situation, you have $1,000 stashed away already. Since you can comfortably save $200 a month, you will save an additional $1,800 over the next nine months. That means, you’re short $740 ($3,540 minus $1,000 minus $1,800). If you use your line of credit to pay the final $740, you can pay it back within four months after the wedding by redirecting the $200 a month that used to go towards the wedding to the line of credit. Therefore, I give you permission to overspend slightly on the weddings if you can’t compromise and come up with a more affordable solution with your friends. Be sure to pay the line of credit back ASAP and then redirect the $200 per month to your nest egg in your RRSP or TFSA.
Remember – open, honest and vulnerable conversations about money are how we say no to overspending without hurting other people’s feelings.
Are you a millennial with a money question? Send it to us. You can also join the Gen Y Money Facebook group.