3 Reasons Taking a Loan For Your Wedding Is a Bad Idea

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Imagine standing at the altar on your wedding day. Staring deep into your beloved's eyes, suddenly, you are struck by the thought that this one "priceless" moment is costing you over $30,000. And that doesn't include the five-day, four-night honeymoon in Cancun. What have you done?

According to The Knot, the national average for the cost of a wedding in 2016 was a whopping $35,329. And since most couples don't have that kind of cash upfront, many turn to loans to finance all or some portion of it.

Technically speaking, there's no such thing as a "wedding loan." A wedding loan is just an unsecured personal loan where the interest rate is based on the creditworthiness of one or both potential spouses. But kicking your marriage off with debt is a recipe for unnecessary stress and hardship. It can set you back financially before you even gain any momentum in what should be a new, exciting chapter of life.

If you are contemplating using a wedding loan to help you pay for your big day, here are three key things you should consider.

1. You squander your money's opportunity cost

Every dollar comes with an opportunity cost — meaning there are infinite ways that one dollar can be spent. Once you spend the dollar, you lose all of the other potential things you could have purchased with it.

Taking out a loan for a wedding is financial double jeopardy. Not only do you lose the opportunity cost for each dollar you've spent, but you also limit what you could have strategically used your credit for — such as purchasing a home or starting a business.

There are so many ways to spend money, and shelling out copious amounts of cash to pay for a one-day event is a bad investment. Starting your life together with a huge amount of unnecessary debt adds more stress to a naturally stressful endeavor. Marriage is tough. In lieu of investing in a single day that won't appreciate in value, take that money and invest in your life with your partner.

2. You drastically increase the cost of your wedding

We've already established that having an expensive wedding is a bad investment, but taking out a loan to pay for a wedding is asinine. Let's say you take out a $20,000 personal loan for your wedding at an annual percentage rate (APR) of 10 percent. And because you and your fiancé both have student loans, car payments, several thousand dollars in credit card debt, and are looking to purchase your first home, you opt for a 10-year repayment period.

Your minimum monthly payment is going to be $264.30 per month for 10 years. During that time, you will pay over $11,000 in interest. Your $20,000 wedding just skyrocketed to $32,000. Think about that for a second. Ten years of your life and $32,000 spent paying for a five-hour event. That money could have been a down payment for a home.

What's more, according to the U.S. Census Bureau, first marriages that end in divorce do so within an average of eight years. That means if happily-ever-after comes to an end before your loan is paid off, you'll be paying for your wedding and your divorce simultaneously. (See also: How to Save Big on Everything for Your Wedding)

3. Spending big leads to more big spending

Spending big on an extravagant wedding establishes spending expectations. This big spending attitude can quickly seep into all financial decisions and an attitude of entitlement can emerge — because you deserve "the best," which is usually defined by people with extravagant tastes. Now the honeymoon has to be lavish with no expense spared. Your home has to be opulent and in the fanciest neighborhood. Your kids have to wear the trendiest clothes, attend the most prestigious private schools, and belong to all of the "it" clubs. The cycle can consume your marriage.

If you and your spouse-to-be can find a way to be creative and have a wedding that is meaningful, intimate, and budget-friendly, you will establish a better foundation. You will be setting a tone of living within your means and valuing quality over size and quantity.

The essence of marriage is appreciating the little things and making the daily grind adventurous. When you pressure yourself and your spouse to continuously "go big," you add a mountain of undue stress — both emotionally and financially — on your marriage. (See also: People Are Still Spending Too Much on Their Weddings)

A $40 wedding story

I recently celebrated my 22nd wedding anniversary. As I look back and recall my wedding, a smile slowly creeps across my face. We spent $40 on the ceremony and had our reception at Applebee's. Our best friends were there and we had the time of our lives.

Over these past 22 years, I've never looked back and wished we had done things differently. In fact, we have renewed our vows twice since then (we do it every 10 years) and each time it's been a quiet ceremony in our pastor's office. The only people who attend are the pastor and my husband and me. It's intimate, private, and special.

I am not saying you should forgo a large wedding. You have found and are marrying the love of your life. That level of commitment should be honored. But before you pull out all the stops and plan the wedding of the century, pause and assess how you are spending that money. Do you really need to spend $2,000 on flowers? If something isn't important to you and your fiance, don't borrow money to pay for it.

Marriage is a marathon, not a 100-yard dash. Try shifting your focus from having the perfect wedding day to building your life together. Chose to invest in you.

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