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The Myth of the $18,000 Wedding

 
 
chai2
 
Reply Fri 26 Feb, 2010 04:02 pm
I think it's time people started getting their priorities straight.






The Myth of the $18,000 Wedding
by Laura Rowley
Wednesday, February 24, 2010
The Wall Street Journal had an interesting piece recently looking at what brides and bridegrooms would save if they invested the money spent on their weddings, rather than blowing it on a one-day affair.

The author suggests that couples who lay out the median cost of a wedding -- nearly $18,000 in 2009 -- are actually missing out on $90,000 to $200,000 in wealth accumulation over a lifetime. (He notes the average bride is 26 years old, so the money would have roughly 40 years to grow.)

Considering the lost opportunity cost of a lavish wedding is excellent advice -- except the basis of the calculation is based only on a subset of all the weddings each year. The almost $18,000 "average" comes from TheKnot.com, a bridal Web site. According to spokesperson Melissa Bauer, the survey company Decipher polled 21,000 U.S. couples who married in 2009. All of them had registered, or "opted in," to one of a network of wedding-related sites operated by TheKnot. In other words, the sample is biased toward people who plan big weddings.
After all, in 2007, 40,000 people were married by the New York City clerk's office --where a ceremony costs just $35. (The Manhattan location underwent a $12 million renovation last year, apparently hoping to attract frugal-minded couples -- or those in a particular hurry.) I doubt many of these folks went searching for a marching band processional (an idea on TheKnot's blog) or the perfect bridal party thank-you gifts.

Author Rebecca Mead exposed a similar data problem in her 2007 book "One Perfect Day: The Selling of the American Wedding," where she cites a $28,000 average figure from a survey conducted by Conde Nast Bridal Group magazines.

"If a bride has been told, repeatedly, that it costs nearly $28,000 to have a wedding, then she starts to think that spending $28,000 on a wedding is just one of those things a person has to do, like writing a rent check every month." Mead writes.
Research has found that Mead's instincts are correct -- our spending choices are greatly influenced by purported norms because the brain attaches itself to "anchors" when making decisions. Consider an experiment conducted by Dan Ariely, professor of behavioral economics at Massachusetts Institute of Technology and author of "Predictably Irrational." He asked participants to write down the last two digits of their Social Security numbers. Then he had them bid on a number of items, including a cordless keyboard and mouse, a bottle of wine and a box of chocolates.

The bizarre results: Students who had Social Security numbers that ended in high digits -- from 80 to 99 -- bid from 216 to 346 percent higher than students whose Social Security numbers ended in the lowest numbers (1 to 20).

Consumers' willingness to pay can be easily manipulated because we often don't have a good handle on our preferences or a rational baseline for the decisions. Economic theory suggests that forces of supply and demand are independent, and it's the enthusiasm to pay a particular premium that determines market prices. But consumers are often at a loss on how to assign value, so as Ariely demonstrates, it's just the opposite: Market prices themselves influence consumers' willingness to pay.

Combine anchoring with clever marketing and you've got an expensive right of passage in the making. Mead, for instance, investigates a number of wedding "traditions" created by the bridal industry, including the engagement ring, invented by diamond producer De Beers in the 1930s and 1940s. (Mead also hilariously unearths the origin of a popular Apache wedding prayer, which turns out to have been penned by a Hollywood screenwriter for a western in 1950.)

Now throw in the community aspect of Web sites, and the battle to steer clear of the $18,000 wedding is nearly lost. Commiserating online with other brides-to-be on floral arrangements, DJs and videographers hardly inspires independent thinking (and budgeting). We take our consumption cues from our peers and often embellish them, writes Ron Wilcox, author of "Whatever Happened to Thrift: Why Americans Don't Save and What to Do About It."

People "tend to concentrate on idealized consumption," Wilcox explains. "We take as anchor points what people around us consume. We remember things we like and don't like and then construct an idea of what is appropriate to consume. What the memory constructs is more extravagant."

Understanding the power of mental anchors is especially important for couples embarking on their financial life together, because spending decisions tend to compound over a series of subsequent choices.

"You can't say, 'Well, I'll just try it once and see how it is,'" Ariely explains. "We have to realize that the first decision we make actually matters a lot. And the second thing is to look back into our habits and say, 'How did we get into this situation that we have this many cars or this size house? Do we really value things in the way we pay for them, or was it a random starting point?'" (In other words, did it all start with an $18,000 wedding?)

As Mead told me: "There's a lot of stuff people spend money on at weddings that isn't about the core of a wedding, which is getting family and friends together and celebrating."

Perhaps along the commitment to "honor and cherish" we should add a new vow: "Before spending five figures -- on a lavish party, luxury vehicle or anything else -- I promise to ponder whether the purchase aligns with our deepest values and enhances or compromises our financial well-being. And I promise to look critically at my anchors."
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Type: Discussion • Score: 11 • Views: 2,481 • Replies: 17
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JTT
 
  1  
Reply Fri 26 Feb, 2010 04:09 pm
@chai2,
...who needs a house out in Hackensack, is that all you get for your money

If that's moving up then I'm moving out.
sozobe
 
  1  
Reply Fri 26 Feb, 2010 04:11 pm
@chai2,
I agree.

I think a big party is cool. I don't think everyone has to elope. But anything over $10,000 say is just unnecessary IMO. (Ours was $6,000 I think.)

(edit: maybe $15,000, I dunno, ours was bare-bones and a while ago now. I do think $28,000 is ridiculous.)

What particularly gets me is the people who really can't afford it and could really benefit from investing or saving but spend it on the wedding instead. If you can actually afford it, go crazy. (I'm sure there are a lot of people who make a good living off of the whole wedding industry these days.)
Linkat
 
  1  
Reply Fri 26 Feb, 2010 04:27 pm
@sozobe,
I agree - if you want and can afford an expensive wedding go for it. It is crazy and irresponsible to go into debt or use all your savings for a wedding. We did, I would say a moderate wedding. We did end up spending more than we originally planned - however, that was due to our wedding venue closing a month before our wedding. But I don't think we went over $10k. We priorized in order of what was important to us and limited the size of the wedding.

The thing about the economics of this - is considering the utility you get from a wedding - some people get huge utility from having a wedding so the huge cost is worth it to them.
chai2
 
  1  
Reply Fri 26 Feb, 2010 04:35 pm
@sozobe,
Soz, I just looked for the latest figures as far as average credit card debt, and the latest is just under $7,500 per household.

Adding on $15K would triple that figure.

The point (to me) was that marketing, the wedding industry is leading peole to believe this $18K, (not much different from $15K) wedding is normal.

No, everyone doesn't have to go to the courthouse and spend just $35 to say "I do"

Why would a big party cost even $6,000?

That's a lot of moola.

I think a fantasy has been created that not only the couple will think back on this one day as one of the most amazing days of their lives (besides the fact of the actual marriage I mean), but that the guests will also remember the event for years to come.

I say put the money toward a house, or for having a child.
It must suck having to have such a dept hanging over your head for years, over some pieces of lace and an ice swan.

ehBeth
 
  1  
Reply Fri 26 Feb, 2010 04:38 pm
@Linkat,
Linkat wrote:
some people get huge utility from having a wedding so the huge cost is worth it to them.


in some cultures, money for a house comes from the wedding
the wedding is an investment in the house

spend $25,000+ on the wedding
get $100,000 cash toward the house
that's a pretty good return on investment

it doesn't always work out if they invite too many people from outside of the culture who don't understand how much cash they're supposed to show up with for the wedding
Linkat
 
  1  
Reply Fri 26 Feb, 2010 04:51 pm
@ehBeth,
That's great Utility!

All we had was one of those dances where they "pay" to dance with the bride and groom. I had never heard of it before, but my hubby's brother requested it. If I had heard of it before I would have said "No way - too tacky" but not knowing and then getting all that loot - wasn't so bad after all.
0 Replies
 
sozobe
 
  1  
Reply Fri 26 Feb, 2010 05:00 pm
@chai2,
I really did enjoy our wedding and am glad we did it, even though we didn't have $6,000 at the time. (My parents contributed $2,000, his parents contributed $2,000, we contributed $2,000.)

And yeah, we got probably more than $2,000 worth of stuff and cash altogether. We could've just bought it for the same money of course, but it was great to get everyone together and have that celebration. I'm glad we did it, I think it hit about the right balance of celebration and tradition and opportunities for the GUESTS* (not just us) vs. financial outlay. We had the money we spent, no debt, and each set of parents said they wanted to make that contribution, it wasn't a loan.

If it's debt, that's something else for sure.

*I don't think they necessarily remembered it for years to come, but they definitely enjoyed it at the time and pretty much everyone we invited would've been pissed if we hadn't involved them. (Maybe not in a mean way, just quietly disappointed, but definitely upset.) So we had to feed those people, and right there that was most of the bill. (Wedding location was very cheap, reception location was free with catering, made my own dress, grew most of my own flowers, etc.)
0 Replies
 
boomerang
 
  1  
Reply Fri 26 Feb, 2010 05:09 pm
But it usually isn't their debt, is it?

I've only known one young, first time married couple, that had a big wedding that they paid for themselves. The bride's family usually pays for the wedding.

I thought it was interesting though that people have been sold a "price point" for a wedding.

It's sort of like that "two months salary" rule for a ring.

I'm wondering what other industry sets arbitrary price points for us to imagine ourselves spending.
ebrown p
 
  1  
Reply Fri 26 Feb, 2010 05:13 pm
@boomerang,
Quote:

I've only known one young, first time married couple, that had a big wedding that they paid for themselves. The bride's family usually pays for the wedding.


I know lots of couples who are remain in debt for years from their own first wedding. We paid for our own wedding. I don't have statistics, but at least among my social circles, this is not uncommon.

I am much happier paying for my daughter's college (at which point she can pay for her own wedding).

I also think that "two months salary" for a ring is exorbitant... and in this day and age where women have their own careers the ring is a primitive custom that doesn't make sense any more.
chai2
 
  1  
Reply Fri 26 Feb, 2010 05:38 pm
soz, I'd look at it that your wedding cost you $2,000.
That is, if the parents were comfortable with contributing their shares.

boom, if the parents are paying, they might be putting their finances, for retirement let's say, in jeapardy.
They spent their entire lives doing for their kids. Doesn't seem right they should have all the burden.

I like the idea of what soz did, each party contributes an equal amount that won't bankrupt them, and have a good time with those funds.

ehbeth, yeah, that's how we did it at polish weddings.

I never knew how much you could rake in.

what about if it's your second marriage?
The couple may be making a better match than the first go round, but it seems traditionally that type of wedding is smaller.

doesn't seem equitable.

0 Replies
 
Mame
 
  2  
Reply Fri 26 Feb, 2010 05:51 pm
I paid for my first wedding, my daughter paid for hers (we contributed to her university education), my sisters all paid for theirs, and we're paying for this one, of course. I think the days of bride's family paying for this and groom's family paying for that are gone for a lot of society.

From what I've heard and seen, the parents paying for it goes one of two ways:

1) Parents feel they can veto things
2) Kids don't get how much things really cost and may demand all sorts of things

Of course, there's a happy medium, but these two scenarios are common.

I think it's ridiculous to spend so much on one day, esp in light of how short some of these marriages last.
chai2
 
  1  
Reply Fri 26 Feb, 2010 08:44 pm
@Mame,
I'm right with ya honey
0 Replies
 
JTT
 
  0  
Reply Fri 26 Feb, 2010 09:13 pm
@ebrown p,
Quote:
I also think that "two months salary" for a ring is exorbitant... and in this day and age where women have their own careers the ring is a primitive custom that doesn't make sense any more.


Absolutely. One of the greatest frauds of all time. But there are lots of suckers out there just panting to be fleeced.
0 Replies
 
plainoldme
 
  1  
Reply Sat 27 Feb, 2010 11:27 am
With today's 50% divorce rate and so much being written and spoken of "starter marriages," why would anyone want a lavish freak show wedding?

I never wanted a long gown and a train . . . and I love to wear skirts and dresses. I was married in late December of 1975. I bought an evening gown from an exclusive store in Birmingham, Michigan for $80 and had a nice florist make me a bouquet that featured dried flowers and feathers along with fresh orchids as well as a dried baby's breath wreath for my hair.

We were married in a Quaker ceremony at a hall rented from a local Episcopal church for $50. We had the church ladies cater with canapes for an additional $50. A champagne toast was the only alcohol.

As the marriage turned out to be a disaster, my ex a bully and a liar who signed my name to loan agreements as though he had power-of-attorney, I am glad that I never spent another cent!

Besides, I like self-control. It is a good trait to have that is sorely lacking in America.

When my daughter married, as her husband is shy, they had the wedding at a justice of the peace the day before the reception. I made a dress for the ceremony and another for the reception. Both were sundresses although one had a sheer coat to top it.

We had the reception at a popular Irish pub with lunch specialties and the cost was less than $1,000. The groom's father paid as the bride's father refused to and I was only employed part-time. We had a cash bar.

The groom's mother did the flowers although a florist made a bouquet for her.

0 Replies
 
hawkeye10
 
  1  
Reply Sat 27 Feb, 2010 11:35 am
has anyone mentioned that the $18K wedding included the honeymoon??

It is over though, they were already meeting resistance pre Great Recession, after GR expensive weddings make no sense and people have different priorities than going deep into debt for a dream.

It did get crazy though, at the worst one location in town was trying to get $1.6K for a wedding, including nothing but use of the building, and it could only be used between 1 and 9pm. I know a caterer who tried to drive the price up over $100 a head, one wedding i know was $145 a head.
0 Replies
 
CalamityJane
 
  1  
Reply Sat 27 Feb, 2010 11:46 am
@JTT,
JTT wrote:

...who needs a house out in Hackensack, is that all you get for your money

If that's moving up then I'm moving out.



Hehe, I actually got married in Hackensack. It was an improvised small and unconventional wedding and probably cost us around $ 2000, paid by us.

I would contribute to my child's wedding but never pay for it in its entirety.
0 Replies
 
Mame
 
  1  
Reply Sat 27 Feb, 2010 12:31 pm
@sozobe,
I agree with you about the money being for the party. Our party budget is $10K for 80 people, and that includes transporting them to and from the venue. We're not doing flowers, having a photographer, cake, or favours. We're just going to get married at home in front of family, then party to blues. It also includes a band, unlimited liquor for those who want it, and endless hors d'oeuvres.

I don't think $10K is too bad for that many people. And I think I over-estimated, actually. Will let you know when things are finalized Smile

Of course, that doesn't include the rings.
0 Replies
 
 

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