Marriage on the cards
A DREAM wedding may become a financial nightmare for loved-up couples this spring, with research showing a significant number of Aussies paying for their nuptials by credit card.
The Lonergan Research survey of 1034 Australian adults, commissioned by lender SocietyOne, found that while 62 per cent pay for their big day using savings, 11 per cent reach for the plastic; and with credit card rates averaging 17.35 per cent, risk starting their new life with a sizeable hole in the hip pocket.
“A number of Australians dream about having the perfect wedding but are held back because of money,” SocietyOne spokeswoman Maria Loyez said.
Wedding costs differ vastly depending on many factors. ASIC’s Moneysmart website estimated the average Australian wedding cost $36,200 back in 2012, while Bride to Be magazine claimed last year the figure was in fact $65,482. And truebride.com.au said $30,400.
A couple who put a $36,200 wedding on an average credit card will end up paying more than $50,543 in total, based on monthly repayments of $1000. That means $14,343 in interest.
But there are alternatives: 5 per cent of surveyed couples opted for a personal loan.
“Think about a personal loan as they have much lower interest rates,” Ms Loyez said. “It should be a perfect day, but (weddings) come at a significant cost and couples can spend years paying off interest on the credit card rather than the balance.”
Personal loans have an average comparison rate of 9.92 per cent according to SocietyOne, which means the same $1000 monthly payments would save a couple $7434 on interest payments and take eight months off the loan term.
The 2016 EasyWeddings Australian Wedding Survey found couples begin with an average budget of $20,913, but expect to spend an average $24,932 in total; and in reality end up spending more than $30,000.
A revised budget caused Jemma Crook, 27, and fiance Warren August, 30, to take out a personal loan for their coming December wedding.
The Sydney couple will tie the knot in Ms Crook’s home town of Kalgoorlie in Western Australia and had savings set aside, but they “diminished very quickly”, causing them to revise their budget and research finance options.
“We decided on the personal loan because we knew what we were getting,” Ms Crook said. “With credit cards we were worried we would pay a bit off, but then keep making more purchases, while a personal loan would put a limit in place.”
The remote location meant options for supplies and services were limited and there were a number of changes of mind, before Ms Crook sat down with a comprehensive spreadsheet of costs and talked them through with her fiance.
“In the end we decided we wanted a lovely wedding with family and friends, whether we could afford it or not,” she said.
“When we’re 70 years old and looking back, we don’t want to regret our wedding. We don’t think we’ll be wishing we’d spent $1000 less.”