If timing is everything, this offer would be considered less than ideal. Certified financial planner Pamela Capalad says her clients had already stowed away the money for their June 2018 wedding when an opportunity to purchase their dream home materialized. "They knew they were going to get married, but they weren't expecting that this house opportunity was going to come up," explains the founder of Brooklyn-based investment firm Brunch & Budget, "so they were like, 'Okay, we have to figure this out.'" To make both wishes come true, Capalad put the pair on a "really, really aggressive" savings plan to cover wedding expenses, she says, and has talked them through a contingency plan that would involve taking out a short-term personal loan.
This begs the question: Can you pay for a house and a wedding at the same time? Sure. But it's going to cost you. The average price tag for nuptials in the United States hovers close to $33,000 while median home costs check in just under $200,000. And your housing expenditures aren't limited to the hefty down payment. (Generally you want at least 20 percent.) "Closing costs are big and they matter," says Capalad. "For instance, in New York, it's five to six percent of the mortgage, which ends up being $20,000-$30,000 on top of the down payment."
There's also money to shell out for an appraisal, an inspector, and a lawyer to go through the paperwork (a requirement in New York). And that's all before you move in. Relocation can be costly, notes Matt Hylland, a financial planner with Hylland Capital Management, as can furnishing and fixing up a new home.
And with a wedding, even the best-thought out budget might neglect to account for what everything you'll spend on a honeymoon, bar tabs from bachelor and bachelorette parties, and the cost of throwing a rehearsal dinner or morning-after brunch. Noting there are "so many activities that are wedding-related, but not part of the actual wedding," David Roth, who frequently works with newlyweds as the owner of Newly Wealth LLC, admits, "I have never met anyone who has come in under budget on their wedding."
With so much unknown, says Capalad, if you're going to undertake this venture, it's best if you've already set aside at least enough to cover your dream vows or a down payment on your ideal house. (Unsure how much you can spend? Consult with a mortgage lender who can prequalify you and tell you what your monthly payments will look like.) Once you look at what you have, tally up how much more you'll need to accomplish both expenditures (Roth advises tacking an addition 20 to 30 percent to each number as a cushion). Then, work backwards, recommends Capalad: "If you have eight months and need to save $16,000, that means you need to find $2,000 a month somewhere."
Generally, she says, that savings comes out of discretionary spending. When she combs through those bills with her clients, "They see, 'Oh man, we've been spending $1,000 on food? What have we been eating?' Or, 'I didn't realize I'd developed an Uber habit.'" Before declaring a year of extreme reductions, she says, "It's important for you to see if that's even feasible."
If it's just not possible to save all of the money you need, there are ways to cut your wedding budget without too much sacrifice, swears Hylland, who bought a house with his wife a month before their summer 2017 wedding. He and his then-fiancée were careful to set a budget for each area of their nuptials—"If you walk into a caterer's office or wedding venue with no idea what you can afford, you will spend too much," he notes—and looked for places they could scale back.
"We found that we were able to save a ton of money finding a wedding venue that did not lock you into specific caterers and suppliers," he says. Bringing in a food truck, buying their own booze, asking a friend to work the bar, and going without flowers also prevented their budget from ballooning. His advice: "Know items that are not a big deal and cut them. The saying, 'You can have anything you want, but not everything you want' certainly applies to wedding planning and home buying."
He, like other pros, advises against reaching for a credit card if the wedding funds run low. (Experts also agree it's smart to have separate savings account for your vows and your house, so you don't direct your money to the wrong spot.) "When you apply for a mortgage, they will see the amount of outstanding debt you have," says Roth. So if you rack up credit card debt, you might be forced to pay a higher interest rate or even be blocked from securing a loan.
As a last resort, says Capalad, she talks clients through the steps of applying for a personal loan. "I don't recommend that," she says, "but I also know that there are clients who are going to do it anyway, so let's make sure it's done right." The key, says Craig Jaffe, CFP, senior wealth manager at United Capital Financial Life Management, is opting for a short-term loan: "You want to have a plan to pay it back and not let any interest compound and build up."
Most importantly, he says, take a careful and rational evaluation of the funds you have and what you believe you are able to save before diving in. "Dealing with finances and money is difficult for a lot of couples," says Jaffe, who came this close to purchasing a home while putting together his 2017 vows. "The biggest challenge would be to try and not get caught up in the moment and rush into anything. You want to try and take the emotion out of it and make sound financial decisions."