As you may recall from part 1 of this 2 part series, I discussed two methods of funding your wedding - savings and credit cards.
I'm going to discuss a third method in this article that some couples are completely at ease with, while others will do anything to avoid, as there can be a number of pitfalls with it.
The method I'm referring to? Borrowing the funds.
If you don't have any savings to put towards a wedding, you won't be able to save the kind of money you will need for your wedding, or you don't want to use credit cards to fund it, the last option you have left is to borrow the funds.
The most common place couples go is to family members.
While some find this a very difficult thing to do, for many, it makes the most sense.
Others look to a credit union or bank.
Lots of soon to be married couples are shy when it comes to asking family for money.
This can definitely be true if you've been out on your own for several years.
In these cases, if you set it up more as a business transaction, your guilt or shyness may ease your concerns.
Simply ask for a loan instead of a gift.
If you choose to ask family members for a loan for your wedding, be sure to be get organized before your meeting.
Let them know what you intend to use the funds for.
Give them a copy of your proposed budget as that will likely make them feel more at ease.
It'll show that you've put a lot of thought into the process and that you will be using their money wisely.
When you get down to brass tacks and discuss the amount of money you'd like, be sure to have a repayment plan already thought out and written down on a piece of paper, or in an Excel file.
Be sure to include a modest interest rate.
Being prepared and laying everything out may end up in a surprise for you - they may simply offer the money to you as a gift, reject the offer for interest, or to make some of your requested money a gift and part of it a loan.
On the other hand, if you go in to the meeting without a game plan, they may be far less likely to want to loan, let alone give you the money.
If you run into a situation where your relatives can't help out, don't be afraid to go to your credit union or bank.
In many cases, you'll be able to get a loan for as long as five years.
Some banks and credit unions will give you a deal on the interest rate if you are willing to have the payments taken directly out of your savings or checking account.
There are some lenders that even have a specific wedding loan product that will help you finance your big day.
But, like anything else associated with the term "wedding", these loans can have exorbitant interest rates.
In this case, you'd be better off using a credit card or getting a personal loan in many cases.
One thing that you absolutely do not want to do, under any circumstances is to borrow funds against your home or 401k plan to fund your wedding.
If you were ever to default on one of these loans, you could end up losing your house! Or, your 401k plan could take a huge hit because you'll have a lot less principal working for you as time goes on, meaning you'll see a whole lot less interest.
This can have a devastating effect, regardless of how young you are at the time of the default.
If it turns out that you are considering taking on a huge amount of debt for your wedding - remember, it's ONE day out of your life - you really should sit down with your spouse to be and have a serious chat about your goals and priorities.
Sure, your wedding is a big deal, but is it really worth putting yourselves in a massive financial crater that's going to take you years and years to get out of? Trust me - you'll be far happier in the end if your wedding is one that you can actually afford.
I'm going to discuss a third method in this article that some couples are completely at ease with, while others will do anything to avoid, as there can be a number of pitfalls with it.
The method I'm referring to? Borrowing the funds.
If you don't have any savings to put towards a wedding, you won't be able to save the kind of money you will need for your wedding, or you don't want to use credit cards to fund it, the last option you have left is to borrow the funds.
The most common place couples go is to family members.
While some find this a very difficult thing to do, for many, it makes the most sense.
Others look to a credit union or bank.
Lots of soon to be married couples are shy when it comes to asking family for money.
This can definitely be true if you've been out on your own for several years.
In these cases, if you set it up more as a business transaction, your guilt or shyness may ease your concerns.
Simply ask for a loan instead of a gift.
If you choose to ask family members for a loan for your wedding, be sure to be get organized before your meeting.
Let them know what you intend to use the funds for.
Give them a copy of your proposed budget as that will likely make them feel more at ease.
It'll show that you've put a lot of thought into the process and that you will be using their money wisely.
When you get down to brass tacks and discuss the amount of money you'd like, be sure to have a repayment plan already thought out and written down on a piece of paper, or in an Excel file.
Be sure to include a modest interest rate.
Being prepared and laying everything out may end up in a surprise for you - they may simply offer the money to you as a gift, reject the offer for interest, or to make some of your requested money a gift and part of it a loan.
On the other hand, if you go in to the meeting without a game plan, they may be far less likely to want to loan, let alone give you the money.
If you run into a situation where your relatives can't help out, don't be afraid to go to your credit union or bank.
In many cases, you'll be able to get a loan for as long as five years.
Some banks and credit unions will give you a deal on the interest rate if you are willing to have the payments taken directly out of your savings or checking account.
There are some lenders that even have a specific wedding loan product that will help you finance your big day.
But, like anything else associated with the term "wedding", these loans can have exorbitant interest rates.
In this case, you'd be better off using a credit card or getting a personal loan in many cases.
One thing that you absolutely do not want to do, under any circumstances is to borrow funds against your home or 401k plan to fund your wedding.
If you were ever to default on one of these loans, you could end up losing your house! Or, your 401k plan could take a huge hit because you'll have a lot less principal working for you as time goes on, meaning you'll see a whole lot less interest.
This can have a devastating effect, regardless of how young you are at the time of the default.
If it turns out that you are considering taking on a huge amount of debt for your wedding - remember, it's ONE day out of your life - you really should sit down with your spouse to be and have a serious chat about your goals and priorities.
Sure, your wedding is a big deal, but is it really worth putting yourselves in a massive financial crater that's going to take you years and years to get out of? Trust me - you'll be far happier in the end if your wedding is one that you can actually afford.