Tuesday, January 7, 2014

Dream $110k wedding ends in debt

If you've read MyPaper , you would have realised the following story: Dream $110k wedding ends in debt.

People say wedding is a once in a lifetime event so its a lot of young couples dream to have a grand wedding. Or is it more about face, pride and ego where the more money you spend on your wedding, the greater pride you have?

No doubt our society has changed where we always want to have better material posessions than others. Better clothes, better phones, better houses, better cars and better weddings. Often, all these materialism seeking ends up in trouble for individuals as well as couples.

This particular couple spent $110k on their wedding. The result? The couple is still in debt since their wedding in October 2012. They lost sleep for many months as debtors keep hounding them to repay their debts. They live month to month just to meet ends meet. The wife suffered from depression six months after their wedding and quit her job. Is this all worth it?

This is a classic example of overleveraging on debt. Let me show you what debt they took just to have this grand wedding.

1) Borrowed $45,000 from a financial institution with a repayment period of 2 years

2) Borrowed $4000 from a licensed moneylender.

3) Borrowed $11,000 from a relative

4) Charged $30,000 to their individual credit cards

5) Emptied savings of $20,000

This couple accumulated a debt of $90,000. I do not know how much salary they get per month. It was only stated that the both the couple were insurance agents. They must have thought they could repay the debt easily by working harder and making more sales. It looks like the sales didn't come in the end.

This is a timely reminder for us that we should not over leverage on debt. Don't be too confident that your income will always be there. Even with a stable job, there will always be the possibility of retrenchment.

This couple greatly regretted their choice they made to borrow just to have a grand wedding. They have had more fights and quarrels after they got married more than the 6 years that they were dating.

Buying a house? Buying a car? Planning for a wedding? It is always wise not to overstretch yourself on debt. Always have extra savings in the form of an emergency fund so that when crisis strikes, you'll be able to live through it.

Read the full story here: http://news.asiaone.com/news/diva/dream-110k-wedding-ends-debt

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  1. So much for being in the "financial advisory" industry for this couple...

    It goes to show insurance is sales. Period.

    And being in a meritocratic industry where the high performers are ranked, photographed, and benchmarked all the time, its hard not to be caught up with the "symbols" of success...

    Some will practice "fake it till you make it" just to fit in.

    It also shows these 2 couple did not make it into the Million-Dollar-Round-Table club. A 100K debt can easily be repaid by a MDR within 2 years.

    1. Hi SMOL,

      I didn't realise until you said it. They were suppose to be the financial planning experts whom everyone look for advise. Its true that insurance is more of sales than financial advisory.

      I have seen many university graduates joining the financial advisory industry. Most are drawn by the potential of earning big incomes but many fail to realise the main purpose of this industry.

  2. Thanks for sharing. This is a great timely reminder to people of our generation. I am not that old by the way hahaha, i am in my late 20s.

    While i agree that wedding is normally once in a life time event, extremely important to both parties and their families, my guideline is never resort to borrowing money to fund a wedding.

    1. Hi Solace,

      We're both still young :)

      Borrowing for a wedding doesn't make sense at all. If can't afford a grand wedding then just have a simple one. If can't even afford a simple one then don't get married.

  3. Looking back, my wife & I hardly open up the wedding photo album we had spent thousand of dollars for it. Keep it simple, you will be much happier in your marriage.

    1. Hi Anonymous,

      Nice.. keep it simple indeed. Thanks for sharing your experience with us here. :)

  4. Singapore youngsters nowadays don't know the importance of financial prudence. To add insult to injury, the couple work in the financial advisory sector somemore. This is the reason I never trust financial advsiors. They cannot even keep their personal finance in shape!

    I have written an article on finanical advisors in Singapore. Check out my blog, SG Wealth Builder (www.sgwealthbuilder.com).


    1. Youngsters in a way have never been through recessions in their life. They don't understand what it means to have no money. Although I'm a youngster too :p

      Financial advisors are just sales people. There are good ones out there too but its very rare and most of them don't survive anyway selling good stuff.

      Will definitely check out your post. Thanks