This article was originally published in DollarsAndSense.sg and is republished with permission.
There are both advantages and disadvantages with getting married in Singapore. On one hand, with our country’s high monthly income, being able to create our dream Disney Wedding is entirely possible. On the other hand, everything in Singapore costs money, with the wedding industry filled with different companies all intending to compete for your wedding budget.
In addition, wedding budgets have in recent years been increasing, as young couples hold lavish weddings to meet the expectations of the people around them.
But does this really need to be the case?
Here are 5 decisions that engaged couples should seriously consider before getting married as it could determine the future of their financial health.
1. Buying An Expensive Diamond Engagement Ring
In today’s context, an engagement ring that comes with a diamond rock in the middle is society norm for proposing to your better half.
There are tons of articles out there trying to guide guys on how much they should spend on an engagement ring. The rule of thumb is usually about 2 months of salary.
This is pretty much bulls&#t advice.
It’s your money and your decision. If your better half enjoys having a nice diamond rock on her finger, go ahead and spend on one. However, don’t just spend $8,500 on a ring neither of you like because some fashion website says so, or because society expects you to.
Financial blogger Budget Babe provides a very interesting perspective to this matter. Based on her estimates, a couple that spends $500 on an engagement ring (or any other engagement gift for the matter) and parks the remaining $8,000 in an investment that returns 6% per annum would get back $174,000 after 40 years. That’s money that would help both your retirement in an old age. The engagement ring, regardless of how nice it looks, would not.
Some people believe that deciding how much to spend on an engagement ring is ultimately a guy’s decision, since he is the one who will choose and pay for it.
Let’s not kid ourselves; guys spend on the ring because girls expect it. It’s a joint decision. Discuss about it.
2. A Banquet Dinner At A 5-Star Hotel
Having possibly spent a bomb on the engagement ring (which by the way is a western tradition), our Chinese ancient customs now kicks in to help us spend even more.
In ancient China, holding a banquet dinner for relatives and friends who attend the wedding is usually a norm. The (practical) reason for this was because these relatives and friends usually travel long distance from distant towns to attend the wedding ceremony.
Hosting a dinner for these guest wasn’t simply a tradition, but rather, one that was borne out of necessity. Common sense suggests that if you have guests who have come from afar, you would want to serve them the best you could afford. In those days, this meant roast pork, chicken and duck.
In today context, our guests don’t travel far to attend our wedding. Explain this to your parents if they insist on a Chinese dinner rather than blindly following the norm.
A banquet dinner is entirely optional, particularly if you already have an ROM reception or a church wedding.
However, if you still want to hold one, remember that you don’t have to hold it at a 5-star hotel that charges $1,500 per table. Alternatively, couple can choose to cater lunch/dinner buffet for guest or find a restaurant that serves good food as well.
3. Expensive Wedding Package
When you go hunting for your wedding package, you would find (empty) promises of many bridal shops offering you various selections of gowns at reasonable price along with photography and videography service. Don’t bite on them immediately.
Bridal packages are usually filled with hidden costs. Want to upgrade your basic gown to a premium one? Top it up at $500. Want to take a shot with that horse that everyone else does, it will cost you $200 more. Need us to return you more photos? That would cost you an extra $3,000.
The multiple changes of gowns that a bride normally has are also a result of Singaporeans wanting to mix both western and Chinese culture together. In western culture, brides from wealthy families typically wear wedding gown designed in expensive fabric to differentiate their status from the middle and lower class. It is also interesting to note that the colour white does not actually symbolise purity or virginity (the colour is blue) and only became popular after the marriage of Queen Victoria.
In Asian culture, wedding dresses are typically red so as to symbolise good luck.
When you combine both together (along with a dinner reception dress), we end up having brides changing in and out of multiple dresses on their wedding day itself, and spending more in the process.
4. Expensive First Home
Your first home in Singapore can be really expensive, particularly if you want it to be.
We commonly see couples these days always gunning for the “best location available” for their first flat. While staying near to the CBD and around amenities is great, not many realize that it comes at a cost, literally.
We wrote an article on why you should not overspend on your first HDB flat. In it, we calculated that the difference in cost between getting a 4-room and 5-room flat at Punggol could be as much as $242,000. This $242,000 balloons up to $458,912 after 20 years once you take into consideration the opportunity cost missed out by the couple.
In addition, discuss the budget for your renovation so that you won’t overspend.
5. Renting House While You Wait For Your Flat
'I'm presuming by the amount of rent you're asking for, it includes a full-time butler, maid and gardening staff!'
While you are waiting for your BTO to be ready, a decision has to be made on whether you want to rent a place during the interim period.
Choosing to rent a place (or even just a room) is going to cost you money. Money that could otherwise be utilize for your upcoming renovation. At the low end, a monthly room rent of $800 per month would set you back $9,600 a year, assuming you do not have to contribute to a share of utility and other expense.
A good alternative would be to stay at your partner’s house until your flat is ready.
Be Smart About Your Finance
Your marriage represents the start of a new life together. Be clever, and don’t overspend so that you would keep your financial health in good health. Remember, marriage is much more than just your wedding day.