Want to avoid divorce? Spend less on your wedding

After some visits to wedding venues and discussions with my spouse to be, we’ve decided on an extremely low-cost wedding. Like, really low cost:

we’re expecting to spend less than $5,000 on our “big day”. 

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This comes as a surprise to absolutely no one, because I’ve been vocal about how disenchanted I am about the wedding franchise. Even if I was a super stoked bride-to-be, my MBA classes this term are killing me and I’m barely making time to eat and hit the gym under this academic workload, let alone plan a wedding.

Right now our plan is to rent out a small restaurant to celebrate with ~50 of our closest friends an family. Making this list is almost an impossible task, but I think the most surprising thing was how receptive and supportive my family was about having a super small wedding. If anyone’s disappointed that I’m not throwing a 200+ guest event, they’re hiding it well. So far I’ve gotten nothing but love and hugs at my decision to keep it low-key which has been a huge relief.. to our family relationships and our bank accounts!

Initially, I was swept up in the fun of party planning so it was hard for my fiancé and I to just be honest and admit to everyone and ourselves:

We cannot afford an expensive wedding. 

Only last year I was dead-set committed on being single for the rest of my life, so at no point was I squirrelling away money for wedding. Not that I had the change to spare: with my MBA tuition coming in at over $20,000 per year, I’m out of cash. Furthermore, both my fiancé and I have the bulk of our net worth tied up in RRSPs and stocks in our TFSAs, which means our savings is not exactly liquid for such an expense. While I’m sure our families will give us a few thousand dollars, it won’t be anything near enough to fund the cost of an average wedding. And lastly, I would never ever ever go into debt for my wedding. I just can’t. I remember how hard it was to pay off my $20,000 student loan debt, and I just don’t want to go through that again!

But even if we could afford to spend $20,000 on a wedding would we do it? Probably not. 

Future Value of $20,000 @ 5% return for 40 years = $140,800

That really says it all: spending $20,000 on a wedding next year will result in having $140,800 less in our bank accounts at retirement. If you think a $20,000 wedding sounds reasonable, as yourself if a $141,000 wedding does, because that’s what it’s actually costing you over your lifetime. That said:

You can spend as much or as little on your wedding as you want — and can afford

You are not more or less married by the amount of cash you drop on your big day.


Weddings are NOT financial assets. Spending more on your wedding day does not correlate to a better marriage — in fact, the opposite might be true: the more people spend on their weddings, the more likely they are to get divorced (maybe it’s because they finally do the math on the cost of their wedding!).

Starting off your marriage with a dramatic reduction in financial assets and/or huge uptake in debt is a recipe for disaster.

With “finances” still cited as one of the major reasons for divorce, my future husband and I have no interest whatsoever in going anywhere near potential financial and marital ruin over something as trivial as our wedding day.

I didn’t think there was any correlation between wedding spending and marriage quality until I saw those statistics. As far as I understood it, people that can drop tens or hundreds of thousands of dollars on a single day, do. And those that can’t, don’t.

There is one place we’re going to get spendy: the honeymoon of a lifetime

We’re already making plans to party it up big time with family in 2015. Last year I spent a week in Hawaii with my extended family, and next year we’ve decided on something even grander. Not only can my wedding not compete with the awesome that is this next elaborate trip, it seems redundant to gather everyone twice in a matter of a few months — but on the other hand, why not tack an extra week onto an already elaborate vacation and create a wholly unforgettable experience? Since this is a summer trip, it might actually happen before my wedding, but I’m not one to get particular about timelines. I’ll keep you posted on details once we firm up destinations and dates. One thing is for sure: the trip will cost more than the wedding!

In the meantime, I’m happy to devote my energy over the next few months to finishing up my MBA rather than hardcore wedding planning — while still looking forward to marrying the man of my dreams at the end of it all!

The $0 Weekend

Now that my Canadian Personal Finance Celebrity series has ended, I’m happy to bring back the $0 weekend! Below is a list of free fun to get you through this coming Saturday & Sunday. Enjoy!

The $0 Weekend

Pumpkin-Pie-Spice2-1-of-11. Make Pumpkin Pie Spice

It’s Fall and you’ve already had more pumpkin spice lattes than your body can handle, but you want more. Pumpkin spice oatmeal, pumpkin spice cookies, pumpkin spice in a jar you can just inhale at your leisure. I’ve got you covered: recipe here. You’re welcome.

Pain_&_Gain_Teaser_Poster2. Watch Pain & Gain

I can’t even. Mark Walberg is awesome and this movie is hilarious, and it’s extra funny if you’re into fitness and can laugh at yourself (or enjoy mocking those that are into fitness). It’s about a group of body-builders that kidnap a personal training client and torture him until he hands over all his assets to them. It’s crazy stupid, which is why it’s so shocking that THIS IS A TRUE STORY.

3. Convince someone to Tweet you a coffee.

Starbucks new promotion lets you send coffees to friends via twitter. It’s pretty rad, but if you want to keep your spending at $0 you’ll need to be a recipient not a giver ;) I received a tweeted coffee last month when a friend saw my snowy photos and decided I needed a Pumpkin Spice Latte. Everyone needs friends like that! Click here to see how it works.

TVD-6-temporada4. Get your Vampire Diaries fix

Oh, this show is in a downward spiral, but I can’t stop. The fifth season is now on Netflix and you get a doppleganger, and you get a doppelganger, everybody gets a doppelganger. But I will endure anything to watch Ian Sommerhalder. There is nothing I love more than curling up with tea and indulging in bad TV on a chilly fall day.

f290ff8d45b8d8f31146a92d9628a5e65. Make pumpkin-something.

Despite my excessive mentions of the beverage in this post, the pumpkin spice latte is NOT the only pumpkin worthy treat in autumn. My fiance was dubious when I dropped a $1.50 can of pumpkin puree in our grocery basket this weekend without any idea of what I was going to use it for, but the internet came through for me. Click here for 50 canned pumpkin recipes.

We only need $1 million dollars to be financially independent

Does the title of this post surprise you? It surprised me. As couple that refuses to give up lattes or even downgrade to a one-bedroom apartment, I couldn’t believe financial independence was just a cool million away.

What is financial independence?

Financial independence means you have amassed enough wealth to generate a passive income to allow you to sustain yourself (ie. meet all your financial obligations) without work.


How do you calculate what you need to reach Financial Independence?

1. Determine how much you require annually to meet all your financial obligations. My fiancé and I currently pay all our bills and buy groceries out of our joint account. This represents all our essential expenses, and we each contribute $1,300 per month to the account (originally we only contributed $1,250/mo each but found having no wiggle room was too tight whenever we wanted a treat at the grocery store or needed to load up the laundry card an extra time!). This means we’re living off of $2,600 x 12 months = $31,200

2. Determine what return you can get on your investment. As intimidating as the stock market may seem at first glance, it’s pretty easy to assemble a portfolio that will pay you 3-5% in dividends annually. This dividend income is cash paid to you monthly, quarterly, or annually that doesn’t erode your investment. We’ll assume I can generate 3% in cash from our portfolio every year.

3. Calculate what nest-egg you need to build to generate the annual income you require. This is simple: it’s just your annual income required divided by the percentage return you expect to get. But this HAS TO BE CASH. You will not collect an annual payout from owning a home, so if you’re counting your house in your nest-egg, take it out, it doesn’t work here. For us this is $31,200 / 0.03 = $1,040,000.

We need a nest egg of $1,040,000 to become financially independent.

For some reason I thought the number would be obscene, but truthfully a couple living on $31,200 per year to pay their bills isn’t living a super extravagant lifestyle. This means we can meet all our obligations on only $15,600 each, which is small enough for either of us to earn at a part-time job.

Before you’re like me and get excited at a super low number, there are other factors to consider:

- This calculation does not account for inflation or taxes. Remember the number you calculate is a net value, not a gross, which means if you’re really aiming for financial independence, you should shoot a little higher to account for increasing cost of living and taxes you may have to pay.

Note: many dividend-paying stocks increase their dividend every year, which will remove some of the strain of inflation & taxes on your passive income.

- This calculation only covers essential expenses. I can’t think of anyone that only wants their needs met and never wants to treat themselves to a dinner our or new clothes, so to truly live comfortably you’ll need a bigger nest egg. Determine how much spending money you need monthly, then calculate the annual amount and add it into your figure.

What this financial independence calculation DOES provide is your break-even point: after you hit this number, you’re safe if you lose your job. You don’t have to go back to work (so long as you’re cool with living with no spending money) if you don’t want to!

- Our lives could change in the next few years, which means we’d have to recalculate. Right now we can live comfortably on $31,000 but that’s because it’s just the two of us in a humble apartment. If we decide to upgrade our home or have a family, we’d need a bigger number.

How will we save $1 million?

Actually, the hard part is already done.

When I set a goal to bank $100,000 in my RRSP by age 33, I determined that this would grow to about $500,000 by age 65 — almost my entire half of our $1,040,000 required. Of course, that plan works only for financial independence at age 65. I can’t bank $100K in my RRSP at 33 then at age 34, throw my hands up at work and announce “I’m done!”. (Note: even if I go ahead and withdraw $25,000 from my RRSP under the first-time homebuyers plan, this  doesn’t necessarily change this calculation because I also hold money in TFSA’s and unregistered accounts. All-in, I will have over $100,000 cash savings leftover at 33 even if I throw a lot of money at a house, so the math still stands).

So then it becomes a matter of how can we speed up our journey? Can we become financially independent long before we retire?

Saving $1,000,000 isn’t easy, especially with me slowing the money-train down as an MBA student (I’m such a downer), but it’s not impossible to achieve before 65. At this point I’m not laying out any firm details because I don’t like to make predictions about my future income or family life when I don’t know all the circumstances. I DO however have a general strategy to follow:

Max out your Tax-Free Savings Account

The current contribution limit for TFSA is $31,000. This will increase to $36,500 in 2015. My TFSA is split between a savings account, GICs, and a stock brokerage account. My goal is to max out my TFSA within three years, by the end of 2017. The the contribution limit is expected to be ~$47,500 at that time. Because I started using the TFSA early, I’ve had the opportunity to earn tax-free interest and dividends in these accounts.

Max out your RRSPs

I’m so far from maxing out my RRSPs, even putting such a goal down feels like a foolish endeavour. In Canada, you’re allowed to contribute 18% of your gross income to Registered Retirement Savings Plan accounts to a maximum of $24,270. The most I’ve ever saved for retirement is about 13% of my income, and for most of my working lifetime it was 0%. I have SO MUCH CATCHING UP TO DO. I’m hoping I can get to maxing out my RRSPs in my mid to late 30’s, because it just won’t be possible before then without a huge cash windfall.

Save in unregistered accounts

My fiancé and I share one joint savings account, and I also have an unregistered savings account I use as a “buffer” — when I get paid, I leave only what I need to spend in my chequing account for the next 2 weeks, and transfer the rest to this savings account, where it stays to pay for upcoming large expense or unexpected costs. As a student with high expenses and low income, these accounts haven’t had much opportunity to build up to anything substantial, particularly because if I have any extra money lying around I’m going to put it in my TFSA. I recently opened an unregistered trading account with my online brokerage, but I have yet to use it. I’m taking a financial derivatives class in my MBA program where I’m learning how to trade options, but so far I’ve been so focused on learning the course material for our weekly in-class quizzes I haven’t had the opportunity to execute anything I’ve learned. Maybe next semester!

 What’s your number for financial independence? When will you reach it?

Saturday Personal Finance GIFs: I’m Engaged edition

As many of you know, I got engaged last month:



I’m almost 29, and will sneak in my wedding right before my 30th birthday. Bet you didn’t think I’d make it.



I want a small, very small, wedding — but I have a really big family. I’m having a hard time telling them.



My fiancé and I were actually so averse to disappointing our families, we considered throwing a 150-person party just so everyone else has a good time and there would be no hurt feelings (only our hurt wallets).




I also realized quickly that while every other girl may have been fantasizing about her wedding since age 7, my approach to wedding planning is unenthusiastic:



I don’t care about trying on wedding dresses:



Choosing wedding venues is such a pain in the ass I’m willing to take the easy road:



And when anyone asks me if we’ve chosen our colors/photographer/cake yet I wish they’d ask about anything else:



My unwillingness to plan a wedding is matched only by the deep love I feel for my partner, which is often so overwhelming I cannot eloquently put it into words:



And no matter what kind of wedding we decide to buy, I’m so excited to be married to him.


Canadian Personal Finance Celebrity Series: Lesley-Anne Scorgie

Lesley-Anne Scorgie is a Canadian best-selling author, speaker, and entrepreneur. She’s published 3 books — Rich By Thirty, Rich By Forty, and her latest one that released this past May, Well-Heeled. You can also get a weekly dose of her financial advice from Metro newspaper.

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1. Most Millennials can’t afford to support themselves until their 30’s. What’s the biggest thing holding them back from independence? 

I believe that three things are holding millennials back:

First is student debt associated with the rising costs of education.

Second is lower salaries coupled with rising costs of living. This relates to so many graduates not securing the jobs and associated salaries that were once available pre financial crises.

Third is lack of financial literacy. We don’t train young people in school, and often times not at home, about how to manage their finances. Thus, so many millennials lack the skills to effectively pay off debt while balancing their long term savings needs and eventual retirement. For so many millennials, the word “retirement” isn’t important to them and that again relates back to limited financial literacy. For young women, smart retirement planning early on is even more important because so many earn less than their male counterparts for doing the same jobs (sadly this is still true in 2014), yet they spend comparable amounts and usually at the expense of their retirement savings. This is what pushes so many women into the position where they are underprepared for, and often times impoverished, in retirement.

2. The biggest complaint from new grads is crippling student loan debt. What’s the secret to paying it off before grey hairs come in? 

Three secrets. First, set a goal to pay it off in a specific timeframe. So, if you owe $30,000 and set a goal of being debt free in 3 years, the principle repayment is $10,000 per year. Then, you must review your budget – a critical element in order to achieve one’s financial goals – and find ways to accommodate those payments. Usually this requires cutting out unnecessary expenses and being resourceful like having a roommate or getting a second job.

The second secret is to pay a little extra whenever possible. Yes – even $10 extra a week can make a massive difference in the length of time to pay off the loan and it saves money on interest.

The third secret is to face reality and know that the investment you’ve made in your education is the most lucrative you’ll ever make. So, feel good about the fact that your income earning potential in the long run is far greater than the cost of your student debt.

3. 20-somethings tell me the stock market is scary — what investing tip would you give them to overcome their fears? 

Do your research. I took a stock tip from my hairdresser once when I was 18 and lost pretty much all of my money on the investment. The fiasco was entirely my fault because I didn’t research the company. These days information on any investment is available with one quick Google search. Don’t make an investment in something you know little about. Research pays.

4. There’s lots of articles about what millennials are doing wrong with their money, but is there anything they are doing right with their money that we’re not giving them enough credit for?

Yes – millennials have a pretty good grasp on frugality and are all over deals, sales and group buying. Thankfully it’s become en vogue to save money on purchases. The millennials have also figured out the importance of enjoying the fruits of their labour. Rewarding yourself, within reason, is what makes having money worth it. The trick is to strike a balance between making healthy financial choices and finding ways to enjoy your life.

Like what you’re reading? Check out my other Canadian Personal Finance Celebrity post by Gail Vaz OxladeRob Carrick, and Preet Banerjee