Money Talks | September 2016
By Melissa Myers and Michael J. Tucker, September 2016 Issue.
Michael J. Tucker: Some of our readers have been asking us about the costs incurred for weddings.
Melissa Myers: You mean, like, your dowry?
Tucker: Well, if that’s a cultural expectation, sure.
Myers: We could look at fixed costs or likely costs that will arise after marrying, as well as discretionary costs that the couple can choose whether to incur.
Tucker: So fixed costs would include things like the marriage license ($76 in Maricopa County) and the impact on the married couple’s income tax liability.
Myers: For those marrying in Maricopa County, the website for marriage license information is clerkofcourt.maricopa.gov/marlic.asp.
Tucker: Some couples’ combined income tax liability will decline as a result of marrying, while others’ will increase.
Myers: That sounds boring. Let’s talk about the discretionary expenses already.
Tucker: Well, this depends a lot on the expectations of the brides or the grooms.
Myers: Many of our readers will have experienced, or at least observed, marriage ceremonies that cost more than what the happy couple could afford.
Tucker: Hopefully they exercised some of their own bootstrap financial planning by asking their parents or other relatives to pay some or all of those costs.
Myers: That’s not a bad planning idea when it’s available. Keep in mind that a disproportionate number of same-sex couples now getting married are older than stereotypical brides and grooms.
Tucker: Right. Their parents may not be around any more. Or they may not be able or willing to share the happy couple’s joy by footing the bill.
Myers: Marriage customs differ from one family to another and from one culture to another.
Tucker: We might expect our readers to be less bound by social convention than other folks who might be getting married.
Myers: Often, but not always. When it comes to marriage, some couples want to pull out all the stops.
Tucker: Extravagant expense might be a consequence of sheer fabulousness, or it might unfold from wedding plans that are made out of a sense of obligation to uphold family or cultural traditions.
Myers: As a financial planning professional, my instinct would be to invite clients to consider realistically the likely costs of wedding celebrations they choose, as well as who will pay those costs.
Tucker: Would you place that in the context of a budget?
Myers: A useful approach is for clients to identify other financial goals, such as home ownership, home remodeling, travel plans, retirement savings, educational goals, and the like, and to consider how the wedding celebration expenses will impact their progress toward those goals.
Tucker: That sounds like a useful framework for folks to consider how they spend their discretionary cash generally.
Myers: Random wedding celebration expenses can be a good example of how people’s expectations or unconscious beliefs can impact their choices in a way that they might not choose if they step back from it.
Tucker: I can understand that. We can probably all think of some real life examples.
Myers: Opposite-sex couples, who have been getting married for a lot longer, often go through process to right-size their wedding budgets.
Tucker: I see what you mean. The bride who wants a sit-down dinner for 200 guests may change her mind once she sees the budget from the caterer.
Myers: The point of budgeting such expenses isn’t to kill the fun. Instead, the idea is to place them in context.
Tucker: The happy couple who considers how the wedding expenses will specifically limit their ability to enjoy other discretionary spending choices would be far less likely to be disappointed by the result of what they decide to spend on the wedding.
Myers: Maybe that’s common sense. Anyway, the discipline of considering those expenses in the context of an overall financial plan, even a short-term one, can be helpful here.
Tucker: Congratulations to all of our brides and grooms among our Echo readership.
Editor's Note: This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation. Neither Camelback nor Commonwealth offers tax or legal advice.