SINGAPORE — Societal traditions and peer pressure have made weddings in Singapore so grand that it can potentially wipe out young couples' savings forcing them to start saving from scratch after paying for the event.
This is part of a series where Yahoo Finance Singapore will focus on different aspects of millennials and their finances. In this sixth part, we speak to young couples who are going to tie the knot soon, as well as financial experts who share more about the financial aspects of a wedding.
An expensive affair
Getting legally married in Singapore actually only costs S$42 for Singaporeans and permanent residents and S$380 if both parties are foreigners.
However, the actual wedding celebrations can cost up to anywhere between S$30,000 and S$100,000. This depends on factors such as the type of wedding, the degree of extravagance, and the number of guests invited.
A wedding photography package alone averages around S$5,000 while wedding rings can go up to S$10,000. Some might even need to pay for the venue of their solemnisation such as churches or hotels. And if the couple wants to go on a honeymoon overseas, another estimated S$5,000 needs to be set aside.
“All this does not even include the cost of a new home for the couple, which is already a huge capital expenditure itself. This includes renovation costs and purchase of household appliances,” said Gregory Van, Founding Partner of Endowus, a Singapore-based fintech company.
While the COVID-19 pandemic has made weddings a much smaller affair, the economy is slowly reopening up again. Van encourages young couples to look at whether some of these expenses are necessary, and to cut down on them if possible.
“We don't have a solid budget at the moment because we still don’t know what the COVID-19 restrictions will be then but ultimately, we don't want to spend too much. Although it is a special, once-in-a-lifetime day, it is literally only for one day,” said Natali Ghui, 27, who will be getting married in 2023.
Ghui and her boyfriend, who have been dating for the past four years, would rather save and spend their money on their house and future together.
Banquets are expensive but important
While the ceremony itself seems financially manageable, the thing that bleeds most couples dry is the wedding banquets.
A typical wedding lunch or dinner at a hotel can easily cost a five-figure sum, depending on the number of guests you are inviting and the grade of the hotel. Most banquets average around S$150 per person. Couples have to pay more if they wish to have photo booths and videography services.
Despite the price, most young couples are still going ahead with the banquets.
“There’s this expectation to invite all our extended relatives and friends for a banquet, and to have it in a reasonable restaurant or hotel that is not shady or dodgy,” said Andralyn Low, 23, who will be getting married in 2023.
Low and her boyfriend, who have been dating since 2015, initially wanted to talk their parents out of having a banquet because of the price. But they later realised the importance of sharing the special occasion with the people they have grown up with.
“And at the end of the day, it should be an honour and not a burden to host such a reunion for our relatives and friends and feed them well,” said Low.
Similarly, Tan Wen Hui, 24, feels the pressure of holding a wedding banquet just to please her parents despite her wish to spend money on other things like a nice honeymoon instead.
“It’s expected to have a wedding banquet as my parents have requested to have a decent meal together with other relatives. They see it as a time for everyone to get together,” said Tan, who will be getting married in 2022.
Be realistic and be prepared
Ultimately, the rule of thumb is to never spend what you don’t have, said Srihari Sikhakollu, CEO of eRemit Singapore, an online money transfer service.
“Taking out huge loans to plan a grand wedding just to impress others is not the wisest move. Couples need to be realistic about their financial situation and adjust expectations and plans accordingly,” Sikhakollu said.
As different couples have different priorities, having a wedding budget is crucial as it allows you to identify what you can compromise or forgo depending on your collective goals, said Eng Thiam Choon, CEO of Tiger Brokers Singapore.
“The last thing you want is to chalk up huge credit card bills after your wedding, trying to play catch up for months,” Eng warned.
Financial experts have also advised young couples to use the three-pot concept after marriage, where each party will have their own personal account and one shared account as a couple. Couples should have equal financial responsibility and should contribute actively.
Justin Kang, 25, who will be getting married in 2023, will be adopting such an approach.
“We will tap into our shared account for large expenses such as buying a car or settling utility bills, while our personal accounts will be used for things like insurance and investment plans,” said Kang, who has been dating his girlfriend for the past seven years.
“Of course, the bank statements of our personal accounts will be available to each other to review! Transparency is very important in a relationship,” added Kang.