The big financial mistake modern couples are making

Are you going in to debt for an Insta worthy wedding? Photo / Getty Images

When Jenna Miliszewski and her husband were planning their wedding in Byron Bay, they had estimated the total bill would be about $35,000 ($38,500 NZD).

But as anyone who has planned a wedding knows, the expenses blew out to around $50,000 ($55,000 NZD).

Luckily, the couple managed to pay for the whole event out of their savings and avoided putting any bills on a credit card or taking out a personal loan.

"We are savers … I'm a huge saver. I refused to go into debt to pay for the wedding," Ms Miliszewski, 34, from the Gold Coast, told news.com.au

"Now we know that the only debt we have is our mortgage. It's nice to come out of it with one less thing to worry about. At the end of the day it's only one day and you don't want to be having to pay that back for years and years," she said.

But Ms Miliszewski and her husband aren't the norm.

Choosi's 2018 Cost of Love report found many Australian couples are feeling the financial stress of paying for their wedding, with many going into a significant amount of debt to pay for it.

The pressure to have an "Instagram perfect" wedding drives up cost, according to 87 per cent of those surveyed, while 84 per cent said it puts unnecessary stress on couples and 82 per cent said it detracts from the joy of the occasion.

More than half believe wedding planning is one of the most stressful tasks in one's life and also detracts from the happiness of the occasion

The couples surveyed said they tried to save money through thorough planning and research, having a smaller wedding and using a non-traditional venue.

Figures vary on the average cost of an Australian wedding. Finder.com.au says it's $22,601 and ASIC's Money Smart website quotes $36,200.

Bridal website Wedded Wonderland says $51,245, Bride to Be magazine quotes $65,482, while MyWedding.com puts the cost at a whopping $90,128.

According to finder.com.au, 41 per cent of newlyweds go into debt to pay for their wedding and 26 per cent take longer than six months to pay the money back.

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Almost a third of all Australian households are classified as "over-indebted", based on the ratio of debt to either income or assets, ABS data from 2015-16 reveals.

Australian Consumer Action Law Centre financial counsel Shungu Patsika said many Aussies are living in line with their borrowing capacity, not their earning capacity.

"We have all these messages telling us we can buy things now but pay later. Unfortunately a lot of young couples wanting to get married will be conditioned to look at credit as a legitimate way for paying for expenses. It's just the norm," Mr Patsika said.

Mr Patsika said both advertisers and credit lenders don't make it easy for people to resist temptation.

"On one side, you've got all the advertising encouraging people to be extravagant and get what they want now, plus the banks are giving away credit very easily. Lenders taking advantage of people's willingness to borrow, particularly for major expenses," he said.

"Social media is another form of advertising but it's not just companies advertising to us, we're also advertising ourselves to other people."

The risk with taking out credit is if you're only able to make the minimum monthly repayments, the bill might never get paid off.

"It can go into several decades or years," Mr Patsika said. "People end up getting stuck in a debt trap because all of their disposable income is going into these minimum repayments and the likelihood of repaying it back is very small."

Mr Patsika's advice for newly engaged couples? Figure out a budget for your wedding and stick to it, no matter what other people on Instagram are doing.