Monday, 29 October 2012

Money Talk with Nimi: Till Debt Us Do Part

It is every parents dream when your child or grandchild announces an engagement. Weddings bring joy, excitement, emotion – you simply want to give your loved one their dream wedding and to support them in every possible way. But as we all know, nuptials can be extremely expensive.
Whether you are the bride, the groom, the in-laws, the parents or grandparents here are a few tips that should help you get through the big day.
Prepare a budget
It is important to keep the wedding costs under control. A good first step, as you plan for the upcoming wedding, is to determine how much it will all cost. Make a list of everything you might need for the engagement ceremony and the wedding day and estimate what each will cost. As you get price quotes, refine your budget and prioritize carefully.

Who pays for what?
With the traditional white wedding, protocol was not financially kind to the bride’s family as they were expected to pay for the greater part of wedding costs; often a huge strain for the father of the bride. Fortunately, times have changed and it is common practice these days for both families to contribute; circumstances and not tradition now dictate who pays for what; it’s more about who can afford to foot what can be exorbitant costs. If one family is far more resources than the other, they may opt to foot the bill for one or two of the largest costs such as the venue or catering. The couple may also be in a position to settle some of the expenses themselves.
Honest open communication and very early on, is key to ensure that the whole experience has as little friction as possible. A frank discussion with representatives of both families and the couple about what each party would be willing and able to contribute will help all stakeholders get a good sense of expectations for the day. This can be a somewhat awkward conversation, so sensitivity is important.
As a parent or guardian, don’t get railroaded into what you really can’t afford. A wedding does not have to consume your life savings. In difficult economic times, one expects that simpler, scaled-down weddings and other special occasions will become more the norm.
Keeping numbers down
The biggest factor influencing costs particularly in Nigerian weddings is the sheer number of guests that attend whether invited or not. Ideally one should be able to invite just the nearest and the dearest, but this is almost impossible to achieve in a society with large extended families, associates, and acquaintances. Being firm about numbers can save you lots of money but might make you rather unpopular.
The destination wedding is a growing trend, and can be a solution for the couple that craves a beautiful day without all the pomp and circumstance of what is becoming the typical Nigerian wedding. By escaping to a faraway location with closest friends and family, a couple can avoid the huge and often unmanageable crowd.
Destination weddings take away some of the major stress that comes with planning an elaborate affair. Many venues will plan the whole event with your honeymoon built in. Guests will usually have to pay their own way if they want to vacation and celebrate with you. It is a difficult choice for those with dear ones that might not be able to travel, but for if a couple is not looking to please everyone, it is an option.
Create a wedding list
Don’t be embarrassed
 about creating, and inserting a wedding gift list in the invitation. Most of your guests who are family, friends and colleagues would wish to buy you a present. You don’t want to end up with six toasters, four kettles and 3 water filters, so you might as well state clearly what you want and need for your new home.
If your favorite Nigerian stores do not have a Gift Service, introduce the idea to them and create one; they will be happy for the business and some will even manage the list for you and deliver your gifts after the wedding.
Don’t jeopardize your retirement
Whilst it is nice to put your children first, don’t jeopardize your retirement to fund their weddings. Your needs are just as important. It might be nice to move in with them in your later years for care and companionship, but not because you are broke. Putting away money for a wedding is secondary to contributing to your pension and retirement savings, maintaining an emergency fund and keeping your insurance up to date; make these goals your priority.
Start early, plan ahead
Once you have passed the financial hurdle of funding your children’s education, make it a priority to set aside funds towards their weddings so you aren’t caught without funds when the special day arrives.
Invest according to your risk appetite and time horizon and allocate assets accordingly in the money market for a wedding that is only a couple of years away, and in stocks for longer term savings, or mutual funds which offer liquidity, flexibility, diversification and professional management.
Use a wedding planner
Even where you are on a restricted budget, as most couples are, a wedding or event planner will help you create a realistic budget based on how much you have available to spend. The best ones usually come with a wealth of knowledge that they have garnered from vast experience relating to wedding etiquette, paying attention to the minutest detail, and handling last minute hitches. Having worked closely with several vendors they should be able to assemble the best team for your special day and negotiate discounts for hiring the venue, catering, photography, music etc.
“Till debt us do part”
Some couples…or their families, throw caution to the wind and pull out all the stops even where they can’t really afford to do so. Some will borrow to fund the wedding. For the bride and groom, as far as possible, it is best to avoid borrowing to finance the wedding. Don’t let the wedding ruin the marriage. Few things can set a marriage off on a shaky start than money palaver and debt. If however, due to time constraints or short-term cash flow problems, debt must be incurred have a clear plan in place to quickly pay off the loan.
Far too many couples are caught up in the euphoria of the wedding day that they don’t stop to discuss their financial matters Research shows that financial concerns are among the most common sources of tension in relationships and play a significant part in divorce; yet most couples go into marriage without ever broaching this subject. It may not be romantic, but it is important. After the whirlwind and excitement of the wedding ceremonies, be prepared to face a financial future together.
Nimi Akinkugbe has extensive experience in private banking and wealth management. She is passionate about encouraging financial independence and offers frank, practical insights to create a greater awareness and understanding of personal finance and wealth management issues. She is married with 3 children.Find out more via

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