Should You Postpone a Wedding to Pay Off Student Loan Debt?
Getting married is a major life milestone but it doesn't come cheap. On average, couples spend just over $35,000 to tie the knot.
When you're dreaming of a big wedding, you'll need savings to avoid going into debt to pay for it. If you're also trying to pay off student loans, that can throw a serious wrinkle in your plans.
So do you put your wedding on hold and clear your student loans first? Or, do you let the debt stick around and move ahead with your wedding?
The answer depends on how you (and your significant other) feel about which one is more important. Looking at both sides of the coin can help you decide whether it makes sense to put your wedding plans on hold.
Pros and Cons of Postponing Your Wedding to Pay Off Student Loans
Paying off your student loans before you're married can give you some mental relief. There are some other benefits of waiting until you're out of student loan debt to plan a wedding.
1. You'll have more money in your monthly budget to save.
If you're paying $300, $400, $500 or more to student loans each month, that may not leave you much to save for a wedding. Even if you plan on spending $5,000 or $10,000 to get hitched, it could still take months or years to save that amount on a tight budget.
Erasing your student loan debt first puts that monthly payment back into your cash flow. Having extra money each month could help you to hit your wedding savings target faster.
2. You won't be carrying debt into your marriage.
Money can be a huge source of stress in a marriage. Bringing debt into the relationship can add to the stress. That's especially true if you can't agree on how to pay it off or one spouse's debt load is putting a pinch on your budget.
Paying off your student loans before you get married lets you start with a clean financial slate. Instead of worrying about debt, you can focus on things like bulking up your emergency fund or saving money for a down payment on a home.
3. You'll save money on interest.
Federal student loans typically have low interest rates. Private loans can carry the same kind of rates you'd get with a credit card. The higher your rate, the longer it takes to pay your loans off. And, the more you're handing over in interest charges each month.
Paying your loans off before the wedding could save you money. That savings could be used for another financial goal on your to-do list.
What's the Downside of Waiting to Wed?
The biggest drawback of waiting until your student loans are paid off to get married? It might mean shelving your wedding plans for the long-term.
A standard repayment plan is 10 years. If you're on an income-driven plan, you may be looking at a 15- to 20-year payoff instead. You could also be waiting years to get hitched If you've got major student loan debt (think $100,000+) from graduate or professional school to pay off.
You might be okay with waiting but your future spouse might not be, or vice versa. If you don't agree on postponing the wedding, that can lead to relationship problems that are bigger than your student loan balance.
Communication Is Key
If you're having the "delay the wedding to pay off student loans discussion" with your soon-to-be spouse, there are some key questions you need to address. How you answer can help shape your approach to deciding when to get married.
1. How will having student loans in the marriage affect our finances?
If you decide to get married before your loans are paid off, how will they fit into your financial picture in terms of merging your money? Will you split the payments equally? Will you both be responsible for paying your loan loans? If one of you owes a lot more in loans than the other, how does that affect how much you'll contribute to the rest of the household expenses?
2. Are there other debts that also need to be factored in?
For some couples, student loans aren't the only debt to worry about. They may also be carrying high-interest credit card debt or a car loan.
As part of your discussions, you should be talking about how other debts will impact your financials, both before and after the wedding. Paying off high-interest credit card debt while you plan for a wedding may be a better investment, for example, than paying off low interest student loans. And it may not take as long if you owe less on your cards than you do your loans.
3. Psychologically, how does bringing debt into the marriage make you feel?
Getting married when you have student loans hanging around is something you both need to be mentally comfortable with. If you're not on the same page, one spouse could end up feeling resentful about having debt, or having to delay their wedding and that's friction you don't need.
4. Are you both in a position to pay your student loans down while also covering the costs of paying for a wedding?
If you haven't combined your finances yet, it's a good idea to lay both your budgets out on the table. Are you both holding down steady jobs and making a decent income? Do you each have the means to contribute money towards wedding expenses while still making headway on your student loans or other debts?
5. How much is each of you willing to spend on a wedding if you're getting married with student loan debt?
Lastly, and most importantly, you need to be clear on how much you're willing to spend on a wedding if you're still in student loan payoff mode. You might want a big wedding while your future spouse prefers a cheaper version. Looking at the numbers and determining what you both can afford to spend vs. what you want to spend can make it easier to meet in the middle.
Making a Wedding Work With Student Loans
Unless your student loan payoff is just a few months away, you're not likely going to want to push your wedding back. In that case, you'll need a solid plan to save for the wedding while still keeping up with your loans.
Go back to the target spending number you and your spouse came up with for your wedding. Divide that number by the number of months you have until your planned wedding date. This is the amount you'll need to save each month to cover your wedding costs.
If you're still managing your money separately, you'll need to decide how to divvy that number up. You could go 50/50 but again, that might not work if one of you earns a bigger paycheck or has fewer expenses each month.
A better plan may be to contribute a percentage of your money to your wedding savings based on your income. For instance, if you earn $40,000 but your spouse earns $60,000, you could chip in 40 percent towards wedding goal while they contribute the other 60 percent.
One very useful and important tip if you're ready to get married but you feel anxious about not paying off your loans first: use the budgeted money for your wedding savings to accelerate your payoff after you're married. If you've been saving $1,000 a month for your wedding, for example, that same $1,000 could help knock out your loans in no time once the honeymoon's over.
Other Ways to Compromise
One of the easiest solutions for dealing with wedding and student loan anxiety is to simply downsize the event. For example, instead of planning a blowout destination wedding on an exotic beach, go with a smaller backyard wedding with your family and closest friends.
Another option is to still get married legally but put off the actual wedding itself. This gives you more time to work on paying off your loans and more time to save so you can have the wedding you want without having to cut corners.
Consider consolidation or refinancing
Consolidating your federal loans simply involves rolling your loans into a single loan. You still low the same amount but instead of making several loan payments each month, you just have one. Your interest rate is the average of the different rates you were paying on all the loans.
Refinancing involves taking out one new loan to pay off your old ones. You can refinance federal student loans but it's most often done with private loans. Refinancing is different from consolidation in that your interest is based on your credit score. If you don't have an established credit history, you may need a cosigner to get a refinance loan. Federal consolidation doesn't require a credit check.
If you're moving ahead with your wedding plans while still paying off student loans, consolidation or refinancing offers two benefits.
- It can lower your monthly payments, putting more money back into your budget to save.
- It could allow you to get a lower interest rate, potentially saving you money. That could also help you pay the loan off faster since more of your payment is going to the principal each month.
Remember the Alternatives
There are a few other ways to manage your loans while prepping for a wedding. Deferment and forbearance, for instance, are two ways to temporarily suspend the payments on your student loans. These options are available with federal loans. Some private student lenders also offer them.
You can defer your loans for up to three years. During that time, the federal government pays the interest on your subsidized loans. Forbearance is available in 12-month periods but interest keeps accruing on all your loans. If you don't pay anything on your loans, you could have a higher balance than you started with at the end of the forbearance period.
In either case, you can use the payment-free period to save for your wedding costs. If you're not comfortable going completely payment-free, you could try an income-driven repayment plan temporarily.
These plans lower your monthly payment. The downside is they also extend your repayment plan so if you want to pay off your loans, you won't want to stay on one of these plans for the long-term.
Remember, though, that if you're still paying on student loans after the wedding, there is an upside: the interest on student loans is generally tax-deductible.
Weigh All the Options
Paying off debt and saving for a big occasion like a wedding is doable. It starts with taking a close look at your income, expenses, desired loan payoff date, and wedding budget. Ideally, you and your spouse-to-be should consider how you can work towards both goals without straining your individual budgets or adding to your debt.
If you're still stuck on whether to put off the wedding, ask yourself if it's really worth delaying it to get out from under your student loan debt. In the end, getting married and uniting your finances with your spouse could put you in a stronger position to eliminate your loans once and for all.