Weddings!
A hallmark event for many, condensed into a day, night, or weekend to remember. The celebration over the union of two is a beautiful moment to treasure and is undoubtedly backed by a great deal of planning in order to make the magic happen.
While there are some concerns surrounding the ideation process of the wedding and crafting a curated list of attendees to celebrate the occasion, one of the greatest constraints must be when the visions are pit against the costs. This is especially so when on national average, weddings round out to be between $30,000 and $50,000 or roughly 5-10 month of one’s salary.
Therefore, it is important to plan ahead to ensure that your wedding do not end up being a heavy financial burden.
If you are looking to customise aspects of your wedding, it is probable that prices quoted to you will be subjective and could require a great deal of negotiation tactics on your end. Before beginning your bargains, or making off with a different supplier or designer, first begin by establishing an understanding of expected costs that go into a wedding.
In brief, what costs should I cover, and how much should I set aside?
So how exactly is one supposed to fork out 5-10 months’ pay to cover a one- or two-day event? While we can rely on the support of our family to some degree, a majority of our funding should not come from spending off future income. Instead, we can first explore any possible inflows to cushion the spend.
Adapted from Chinese tradition, most marriages today tend to welcome money-stuffed envelopes as gifts from guests to newlyweds. While these are intended as gifts for the couple, it, to some degree, may also be considered as source of support when compensating for the spend of the wedding celebration – namely the banquet or solemnisation reception – especially when prices for banquet dinners are now widely accessible for guests to view when packing their envelopes for the bridge and groom.
That being said, it is not the most ideal to match your banquet spend to the amount your guests are likely to gift you, and by extension, how much they are able to afford. Apart from creating a slippery slope which introduces tension over the price of a “responsible diner”, it is also possible that counting the dollars too closely may lead to cut corners that do not age too well over time. Inflows should be kept as a consideration at the back of your mind and be complemented by cost-cutting suggestions for a wedding which leverage on high returns associated with high spending. As mentioned, try to cater for 10-20% as uncovered cost which you should have on hand to make payment (either in cash of credit).
One product which incentivises high spending behaviour by awarding rebates and discounts would be credit cards. Compared to spending with a debit card, couples who have their payments in order can benefit from returns when they spend as much as they otherwise would for a wedding. For example, using your credit card to shop and dine can earn you miles for hotel stays and holidays. When the time comes, couples can use these said miles to save on their well-deserved honeymoon getaway. The UOB One Card is one example which offers a 10% cashback on daily spends and up to 5% when shopping.
The last means to lower costs down is to get the most information in the market as possible and argue your grounds.
After creating a wish list of events to be held at your wedding, check out community groups like Budget Brides to tune into deals that pique your interest. You should also adopt an open mindset at this point and welcome conversations with multiple vendors or suppliers who can produce something you will be happy with, even if it may not be the best match. Not only would this keep your options open, but also provide you with more confidence when negotiating for lower prices knowing you have a close alternative. For example, if you are interested in sending out letterpress cards, you might also want to consider if embossed cards or stencil work would be suitable alternatives.
Knowing your general interests are great, but when there comes a time where you are forced to work within your means, you may have to consider difficult questions like separating necessities from complements. Do you need to host a 300-guest sized banquet dinner, or would a lunch reception for 200 suffice?
Reorganising your priorities can be a stressful task for both you and your partner, especially when there is a tight timeline, and some things are just can not be compromised. In cases where your budget is out of reach but is concluded as a necessary expense, you can look to financing options to broaden your offerings at your wedding.
The primary way to finance a wedding would most simply be to take up an unsecured personal loan. An unsecured personal loan is one that is not backed by the debtor’s assets but is offered based off the debtor’s creditworthiness. In the case of a wedding, 2 parties would enter into a contract separately to jointly fund the big day.
Compared to credit cards, a personal loan offers a significantly lower interest rate, which means that credit cards should only be used to reap its benefits and not be weighed against its high interests. The two, credit cards and loans, should be used in tandem with another - where a credit card is used for big ticket items in the short-term and a personal loan for more long-term repayment schedule. So essentially, to cover the banquet for less than 30 days until you collected your Ang Baos, use a credit card. For other expenses that you prefer to break them into instalments over 1-3 years, get a personal loan.
Despite the benefits that come with taking up a long-term loan, a substantial degree of consideration should be taken into when discerning the loanable amount that is right for your repayment style. Not too clear on how much to borrow? Similar to SMEs, individuals can assess their own cashflow gap and settle on a personalised repayment structure to match with a loan structure with works best for them. In brief, the loan should be feasible – that the principle can be realistically paid off, functional – that the financing is sufficient to cover the scope of the wedding plans and agreeable – with both husband and wife able to cover the future debt repayments.
After gathering the envisioned scope of the loan comes the need to decide whom to work with. While some opt to work with well-established banks, you may also consider working with alternative lenders who provide equally competitive tenure and rates. One example of an unsecured loan offering is the Standard Charted CashOne Loan. The loan offers one of the lower interest rates in the market, a tenure of up to 5 years and cash back of 1.2% of the principal.
As for alternative lenders, their loans are better known as bridging loans. Offered by Friday, their loan charges a 2-3% a month and operates with decreasing interest fees tagged to the remaining debt. Friday also enables its clients by allowing you the freedom to choose your preferred frequency of debt repayment; whether weekly or monthly.
Comparing between traditional and alternative lenders, traditional lenders tend to approve of a higher loanable amount, at up to 8x one’s salary. On the other hand, alternative lenders support by offering lower interest rates, which may eventually pay off better in the long run.
Lendingpot will continue supporting you as your connecting platform between you and our different lenders, both traditional and alternative. Guided by your efforts to cut costs where possible, we hope that you are able to make financially responsible use of loans to bring your wedding plans to the next level with lesser worries and more celebrations. If you would like to take a loan, apply directly on Lendingpot to gain access to direct quotes and offers instantly.
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