The money details of our wonderful wedding

Here's the post and answer many of you have waited for - how much does a financial planner who encourages frugalness spend on her wedding? Well, I'd sheepishly say more than I thought, however, hear me out for some important points.

1. Husband and I had a discussion about budget and how to pay for the wedding. Our savings were allocated for a house (which we almost bought weeks before the wedding to beat the new mortgage rules, just to add to the excitement!) so whatever we spent needed to be covered within the next couple months. We also discussed those other questions in my last blog post.

2. We decided to make the ceremony/reception family-only and and get married sooner rather than later. With only weeks until "I do" we figured the short timeline would cut out the "oh, it would be really awesome to have __________." <insert: circus, helicopter, personalized anything, etc.>

3. We made the decision to do it as economically and nice as possible. What does this mean? We chose to stay at Poet's Cove on Pender Island. This was not economical. But it was nice (like, really, really nice). We bought our own food and wine and my fabulous brother-in-law, assisted by my sister and family, prepared it all. We couldn't have been luckier.

4. We were blessed with lots of help from family as well as financial consideration. This wedding would not have been as wonderful without the help of the Gilgunn family, some key friends, and financial gifts from both families.

5. We did not go into debt. Thanks to careful planning, help from family/friends, and hosting international homestay students, the wedding was completely paid for within two weeks of our "I do's".

So, without further ado, here's how it all shook down:

I planned the wedding in three weeks. Honestly, that's all it took. Fortunately for me, I already had spoken with a marriage commissionaire (someone I knew through work), a cake maker (friend-of-a-friend), a sommelier and chef (sister & bro-in-law) and a dress maker (local designer who has made dresses for me in the past ). We had 24 guests (mostly family, closest friends who helped out with transportation, hair, make-up).

Could we have done the wedding cheaper? Absolutely. Especially if we didn't know there would be some cash given to us. Would I change anything at all? Absolutely not. My Pender wedding was just perfect.

Total wedding cost: ~$7,500

Wedding Costs

Goodbye Student Loan!

Today is the day I have been waiting for since June 2002. My Graduation day from Carleton University was rainy and cold and I'd been locked out of my house an hour before the ceremony with fancy hair but grubby clothes. I made it in time to file into the auditorium, have my name mispronounced and butchered (it's so long it didn't fit on the little cue card they read it from) and get that piece of paper I'd work so hard for. My degree reads: Bachelor of Arts/Honours/Mass Communication/Minor in Business. Phew! All those accounting and journalism classes were finished forever! (Well, at least until I decided to do my Certified Financial Planning designation, but that's another story).

My $20,000 four-year party had come to an end. But what was just beginning was my nine-year loan-repayment journey.

Thanks to attending school out-of-province and an exchange year in England, I graduated with about $25,000 of student loan debt. The government graciously gives you 6-months grace period when you graduate to find a job and start repaying. This meant that in November 2002, my repayment amount was over $25,000. In fact, I didn't get back to the original debt amount I'd graduated with until February 2003.

The hit list:

  • Government Canada Student loan (direct through Gov't) $11,000
  • Canada Student loan (via the bank) $7,000
  • Provincial student loan $1,000
  • Bank student line of credit $6,000

After graduation I chose not to consolidate my loans into one single debt with one interest rate and one payment. This worked out best for me in the long run as it allowed me to pay off loans individually (the last one having a variable rate). However, consolidation may be the right option for your loans, read more here: Office of Consumer Affairs.

Because of varying interest rates and payments, it's hard to use a calculator (like CNN's money one) to determine the exact interest I paid on my loans. However, from old statements, tax returns and payments my best estimation is that I paid over $12,000 in interest over the past nine years. That means I paid back over $37,000 total - or more than $4,000/year.

That same $4,000/year (or $340 monthly, on average) in my pocket would have done wonders for my RRSP. If I'd put that same $4,000 into my RRSP instead of repaying the loan, I would have about $47,000 by now (assuming a modest 5% growth overall to account for the recession, etc.).

The bottom line is that loans are very costly and should be avoided if possible. Even after working summers (and three jobs in fourth year), scholarships and bursaries, I still needed to borrow money to go to school and I paid the price in repayment. My goal was to have my loans paid off by 30 (I'm still 30!) so I'm happy. I understand parents who are dead-set on making sure their children don't go through the same thing some of us did - $35,000 can make a big difference when you're buying a house and starting your own family.

Some quick Do's and Don'ts for loans (and student loans):

  • DO negotiate the best interest rate available (this could mean using your mortgage lender or your parents) - this can be done during the repayment period as well; it never hurts to ask
  • DO make higher than minimum payments and lump sum deposits when possible (I'd be paying my loan for at least another 8 years if I'd only made minimum payments)
  • DO work towards your goal before borrowing (I started saving for University in Grade 11)
  • DON'T take the maximum amount the lenders will give you
  • DON'T go into default - if you can't make a payment at the scheduled time, contact the lender immediately
  • DON'T borrow more or spend more just because you have access to the money

Happy saving, everyone!

Can you read your credit card contract?

Whining about your credit card debt is not a plan Creditcards.com asked some lawyers, professors and grad student  to try and decipher a typical credit card contract. If these people can't figure it out, how do you think the average North American fares?

Some credit card agreements require a 15 grade reading level (third year university level) while the average American reads at a ninth grade reading level.

How does your contract stack up? Have you read it? Do you know what your minimum payment is and how it is calculated? Do you understand how the finance charges are calculated and what your grace period is? What happens if you go over your limit? Most importantly, what is your interest rate and is that the lowest it can be?

Canada's Economic Action Plan is working to help Canadians help themselves. Check out this link for more information.

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