Ep.54 - Wedding Planning Part 2 - How to Set A Realistic Budget (4 Minute Read)
Read Time: 4 Minutes.
This is part 2 of a 3-part wedding budget series. If you are debating if you should hire a wedding planner, you should check out part 1 of this series here, "Is A Wedding Planner Worth It ?"
This is my 3-step process to set a realistic wedding budget, based on national data, your savings, and your wedding size.
STEP 1 - START WITH THE NATIONAL AVERAGE $33K (2018)
I recommend starting with the national average and adjust based on your personal situation. When my wife and I started planning for our wedding in 2014, the national average was $30,000. That number is $33k in 2018, according to Business Insider.
STEP 2 - SET THE MAX BY CHECKING HOW MUCH YOU HAVE SAVED
If you don't already have the national average saved, then you should cut your budget from the national average by $5k at a time to what you expect to save by your wedding date.
Here is how it works: If you don't have $33k saved already, then go down to $28k ($33k - $5k), and ask yourself if you think you can save $28k by your wedding date? If not, keep going down by another $5k to $23k. Ask yourself the same question, can you save $23k by your wedding date? Repeat again if the answer is no.
If you already have the national average or more saved, then you should use your current savings as the absolute maximum, because I don't think going into debt is a good way to start a new life together for any couple.
There will be more costs after the wedding, such as the honeymoon, and possibly buying a house together. For example, if you have $50,000 saved, that's your max.
STEP 3 - SET THE MINIMUM WITH THIS FORMULA: $10,000 + $50 x #
It's good to embrace the reality of how expensive a wedding is, so you can manage your expectations and act accordingly. For example, it'd be ludicrous to plan a 200-person wedding with just $5,000. To master reality, you need to understand both fixed costs and variable costs.
- Fixed Costs: $10,000 represents all the typical fixed costs. They include things like engagement photos, bridal dress, marriage license, DJ/band, makeup, ceremony fee, etc. They are called fixed costs, because the location and wedding size do not impact these costs much.
- Variable Costs: This is the part that goes up as your wedding size increases. For example, when you have a 300-person wedding instead of a 100-person wedding, you need a bigger venue, more food, more drinks, more tables/chairs, more wait staff, more centerpieces, more wedding favors, etc. $50 per person is a relatively conservative number per guest.
LET'S RUN THE NUMBERS WITH 4 SCENARIOS
- 150-PERSON WEDDING WITH $50K SAVED: $17,500 ($10,000 + $50 * 150) to $50,000
- 250-PERSON WEDDING WITH $50K SAVED: $22,500 ($10,000 + $50 * 250) to $50,000
- 150-PERSON WEDDING WITH $20K SAVED: $17,500 ($10,000 + $50 * 150) to $20,000
- 250-PERSON WEDDING WITH $20K SAVED: Max of $20,000 The minimum expected cost is higher than the savings. It means, you will have to make sacrifices, or find relatives to pay for a part of your wedding.
MY OWN $30K WEDDING BUDGET
Based on the 3 steps above, we set a $30K budget for our wedding in 2014. Our parents paid for the Chinese and Nigerian food at the reception, which saved us thousands. Other than that, we paid for everything else, which came out to be $25k.
Below is a detailed breakdown to help you establish a benchmark. I hope it helps you set a realistic budget!
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