Wedding planning: Investopedia EIC details new survey related to paying for nuptials

Investopedia EIC Caleb Silver joined Yahoo Finance Live to discuss a new survey detailing how people are planning to pay for their weddings.

Video Transcript

ALEXIS CHRISTOFOROUS: When it comes to paying for a wedding, sometimes it takes a village. According to a new survey by Investopedia, couples are finding some creative ways to pay for their big day. But what does all of that mean to their long-term financial health? Here to break it all down is Investopedia's editor-in-chief, Caleb Silver. Caleb, I enjoyed this one, I'll tell you, because I found it fascinating. The average US wedding budget is $20,000. That's a lot of money. And that means couples can be saddled with debt just as they start their new lives together. Tell us how most couples are paying for their nuptials these days.

CALEB SILVER: Good to be with you, Alexis. And we know so many people had to either put off their weddings in the past year and a half or postpone them or reduce them way down to just a few friends and family. So yeah, people want to spend, and they're spending a lot of money on it and planning to spend a lot of money on it. We've done a survey with brides.com, our sister here at DotDash, to find out that 87% of couples are planning on paying for their wedding over other financial priorities.

That's over their savings. That's over their investments, everything else. That big day has become super, super important. These are folks that are planning to get married in the next couple of years. They're talking more about money. They're talking more about their plans. They're sharing more accounts, Alexis. So we see this dialogue, this pillow talk about money, increasing among couples, and that focus on the big day even more and more important as we come out of the pandemic, hopefully.

ALEXIS CHRISTOFOROUS: Now this one worried me a little bit. And I'm wondering if it worried you just as much. 41% plan to use credit cards, charging up to $8,000 of their wedding costs on average. That seems a little dangerous to me.

CALEB SILVER: Absolutely, but they also know that it's possible. And a lot of folks are starting out their married life in debt as it is. So the fact that they're planning to use credit cards, I think that's not that unusual for a lot of folks. But what we didn't find, Alexis, was a lot of people relying on their parents to pay for their wedding. These are couples marrying a little bit later in life, are getting a lot more creative about that. So the use of credit cards definitely a big deal.

But 74% say they would use savings. We like to see that. That's a good use of savings. 20% said they would use their tax refund. 19% say they'd be taking out loans for this. And 18%, Alexis, said they'd be selling investments. I happen to know a couple that paid for their wedding with some crypto returns. So you can get more and more creative if you've done well.

ALEXIS CHRISTOFOROUS: That is great. I kind of like the idea of investments paying for the wedding. I mean, I guess there are some tax implications one has to think about there. But what do you think about in terms of taking on more debt in the form of a loan? Because to me, I hear loan, I hear credit cards, I'm thinking, this could take years to pay back. And the interest is going to pile up.

CALEB SILVER: Yeah, those two things could have very high interest rates, especially the credit cards, depending on which one you get. So that one seems super dangerous to me. The loans, those rates can also rise pretty extremely if you're not careful, watching those over time. So those two are the dangerous ways that folks are doing it.

And we also see a lot of couples, now that they're planning-- they're co-mingling their accounts much earlier in their relationships, a lot of the folks that we talked to, engaged couples only, have been co-mingling their accounts at a pretty impressive clip. About 57%, 59% say they budget together. 63% say they regularly talk about money together. 63%-- 48% say they already have joint accounts. It took me and my wife many years to form those joint accounts.

But those wedding expenses are super real. And if you talk to financial advisors these days, and if you have teenage kids like I do, they make you put in that wedding cost because they know it's coming your way in 5 to 10 to 15 years. So if I'm going to help out, I've got to make sure I put some money away, or they've put the appropriate amount of money away.

ALEXIS CHRISTOFOROUS: Yeah, I've got some teenagers, too. We're not talking about that just yet, though. I think we got a few years, Caleb. How has COVID-19, though, changed wedding planning, budgeting, the cost of weddings?

CALEB SILVER: Yeah, it's going up. And I think people are ready to have a little bit more of a blowout here now that-- since they haven't been able to do it the way they may have wanted to over the past couple of years, or they've seen other people with reduced weddings. So those wedding costs are going up. We know that the venue costs and the food costs are going up, given inflation and everything. But we also know that folks are being a little bit more strategic about approaching it together.

So it's not just one member of the couple taking care of it over the other or one family. It seems like more of a partnership. And it's costing more so you're going to need your financial partner and your life partner to work together at the same time when you get married.

ALEXIS CHRISTOFOROUS: I like to hear, though, that there are some more transparency, that folks are co-mingling the account and understanding truly what they might be able to afford. I do want to talk about how couples are getting help outside of just each other. Are families still a part of planning the wedding and paying for it?

CALEB SILVER: By all means. But we've also seen that folks are getting married a little bit later in life. So the later you get married, the less your families are involved. But we still see folks relying on their families. You see that 22%, or their partner's family, in some cases. But as a couple, you see 56% planning on tying the knot and paying for it together. Good strategic partnership. It's a big project. We know how important that day is for so many people. Those memories last a lifetime.

So it's good that they're planning it together. Less have help and emphasis, though, on mom, dad, or the in-laws to help get you across the finish line there. But friends and family are always a good way to go. And if you can get people to volunteer and donate some stuff for your wedding, even better. But to your point, the transparency is super important because this is a life partnership and a partnership across so many different dimensions.

ALEXIS CHRISTOFOROUS: Yeah, and but I guess, the important thing is don't lose sight. This is one day of many days of the rest of your life. So don't throw yourselves into debt there in the very beginning. Caleb Silver, editor-in-chief of Investopedia, this is a fun one. Thanks so much for stopping by.