A wedding is a happy occasion, but its high price tag can often cause significant stress for not only couples tying the knot, but also their wedding party. On average bridesmaids and groomsmen spend over $800 to celebrate the I dos. Tensions can be high when money is involved, but finance experts are highlighting save, fast rules that can help everyone navigate the process. We chatted with Myron Genyk, and CEO and co-founder of Evermore Capital, for some sage advice. —Vita Daily
Myron, please tell us a bit about yourself to start.
Hi there! My name is Myron Genyk, and I’m the CEO and co-founder of Evermore Capital, which introduced Canada’s first target date retirement ETFs in February. I’ve spent most of my career working in the ETF space, with a brief sabbatical to pursue some music interests. My wife and I got married in 2005, and I give her all the credit for organizing an amazing wedding!
Wedding season is upon us; on average, how much would you say bridesmaids and groomsmen spend to celebrate their friends’ “I dos” and how can this cause strain or stress?
How much bridesmaids and groomsmen spend can really vary, depending on their financial means. Generally, bridesmaids spend a lot more than groomsmen—hair and makeup alone can easily cost as much as a tuxedo rental! Depending on the circumstances, this could range from a couple of hundred dollars to a couple of thousand!
That said, we need your expert insight into navigating the “spend” process when it comes to both newly-weds and wedding guests. When it comes to wedding party finance etiquette, what should and shouldn’t wedding party members pay for when it comes to events, hair, makeup and more?
There shouldn’t be a fixed etiquette on what is paid for by whom; what is appropriate really depends on the circumstances of everyone involved. However, there is one constant: it should be up to the couple to figure this out and make these decisions. Not only does everything revolve around the bride and groom, but they uniquely know everyone involved, and probably have a good idea as to their financial situation. Now, even if everyone involved has the means to pitch in, that still doesn’t mean they’ll be okay doing so. In particular, if there are relatives or friends who have strained finances—and you’ll likely know who they are—don’t make your wedding their burden. The best rule of thumb is the Golden Rule: How would you feel if the roles were reversed? Or if you were in their financial situation? Do you want your wedding to be the happiest day of your life only, or a really happy day for your guests, too?
What advice would you give on how to budget finances and save while being part of someone’s big day?
Make sure you have a “miscellaneous” category in your budget that reflects unexpected or one-off items. The size of this line item could be 2% or 3% of your total expenses. So if you’re earning $60,000 per year and aiming to save $6,000 of that, then your expenses total $54,000 (since what you don’t save *is* spent). 2% of $54,000 is $1,080, which is $90 on a monthly basis. Also, if you have a budget line item that captures the money spent on hanging out with friends—going to restaurants, that sort of thing—those expenses can be shifted from one month to another. So if you know you have a big spend coming up in August that you’re really excited about, then maybe commit to spending a little less in September and October. Some people strictly stick to their budget while others use it as a guideline. Simply having a budget, and allowing yourself to be flexible within it, can help mentally and actually prepare you for the expenses related to being part of someone’s big day.
While the big day is certainly exciting, why would you say it’s important to have a long-term savings plan, and why couples and wedding parties shouldn’t lose sight of retirement?
I have to assume that you’re marrying someone you truly want to grow old with! You’ve probably discussed things like how many kids you want to have, what types of activities they might do, where you want to live, where you’d like to vacation, and so on. You’re building a future together. It naturally makes sense for retirement to be part of those conversations: Where will you live? What types of activities might YOU do?! If you’re lucky, you’ll spend as much time together in retirement as you will before that. It can be a lot of fun thinking about this! If you’re building a future with someone, it’s important to also build your financial future with them. We recognize how hard it can be to know how to develop a long-term investing strategy, and that’s why we created Evermore Retirement ETFs—to make retirement investing low cost, easy to understand, and ultimately, accessible to all Canadians. No one should have to sacrifice embracing life as newlyweds, and Evermore Retirement ETFs allow you to live in the now while investing for tomorrow.
Top tips on how to save, now?
First, you really need to figure out what your goals are; not all goals require money, but some important ones do. For most newlyweds, these goals could include saving for a down payment on a home or even starting to save for retirement. Next, figure out how much you need for each goal. If you want to have a 20% down payment on a $900,000 home, then you’ll need $180,000. If you want to buy that house in five years, then you’ll need to save $36,000 per year or $3,000 per month. This can seem really difficult, but remember, there are now two of you contributing to this. Also, your future monthly mortgage payment will be approximately this amount, possibly higher, so getting used to living a lifestyle that allows for this saving is good practice. You’ll probably want to keep these savings in a high-interest savings account, to ensure that you won’t have less than you saved when you need it. As for retirement, some quick math shows that saving $6,000 per year over 40 years and earning a 6% annual return gets you nearly $1 million after 40 years! That amount of money could provide an income in retirement of approximately $40,000 or $50,000 per year. Now, saving $6,000 per year, which is $500 per month, sounds like a lot. But if you put that in your RRSP, you’ll get a tax refund (which you can also invest, or spend as necessary) at your marginal tax rate. Also, as you progress through your career and begin to earn more, you might actually be able to nudge this number higher. Now that you have these figures—each month, setting aside $3,000 for the down-payment and $500 for retirement—construct a budget to see if this works. If you can make it happen, great! If not, because the current cost of living is too great, then re-evaluate your goals. Would you be okay buying an $800,000 home? Or aiming to have an $800,000 nest egg when you hit retirement. If so, scale back those savings figures accordingly, and see if that works. Again, the best way to save is to set goals, figure out when you’ll need to get there and see if it fits within your budget. Then, it’s up to you to stick to the plan!
Last but not least, will you be attending any weddings this summer?
I don’t actually know anyone getting married this summer! It’s funny how that works—around the time that we got married, it felt like we were going to 10 weddings each year! Weddings slowly gave way to baby showers, and even those seem to have slowed down. Though I’m sure the next wave of weddings will start up again in a few years.