Marriage or mortgage: Making financial choices

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One of the biggest decisions that many young couples face is whether they should splash out on a wedding – or save for a home deposit. In fact, it’s such a conundrum, there’s even a TV show on Netflix devoted to it.

So, do you prioritise your wedding or the mortgage? Can you do both? What do you need to consider? The answers to these questions really depend on your personal goals as a couple and your current financial situation. Here are some pros and cons of each approach to help you decide what to do. And just a little reminder that this post just outlines ideas and suggestions, and we always urge you to get professional advice before making any major financial decisions.

Planning a wedding

Although just about every bride and groom wants to keep costs down when planning their wedding, it’s a scary fact that the average Aussie wedding sets couples back $36,000. According to our Cost of Love report, over 9 in 10 Australians think that’s too high.

You have to factor in things like paying for the venue, food and alcohol, ceremony, rings, photography, entertainment, clothing, flowers, cars, hair and make-up, wedding night accommodation – and that’s not even including honeymoon costs!

So, do you spend all your hard-earned savings on the big day? Here are the pros and cons to consider.

Pros 

  • It’s a hugely important milestone for many couples beginning married life together
  • You get to share your happy day with the people you love and create life-long memories
  • You may be able to choose a fancy venue, and potentially invite other people who would be left out if your wedding was on a tighter budget

Cons 

  • Planning a wedding can put a lot of emotional and financial stress on a couple
  • The cost can set you back and can often mean your other financial goals have to go on hold
  • Any debt may reduce your borrowing capacity.

Buying a house

When you’re planning a life together, it’s tempting to get a roof over your head that’s yours, before you embark on getting married or raising a family. And if you’re already living together, formalising that with a home you own together can be an exciting step.

And that’s reflected in the research, with studies showing that 51 percent of Australian couples purchase property before getting married.

However, there are different ways you can own property together and it’s important to think about this, especially if you’re contributing different amounts to the deposit. Here are the pros and cons to consider when buying a home first.

Pros

  • You can buy property together even if you’re de-facto – it makes no difference
  • You’re starting married life with an asset that may build in value
  • It can be good to get on the property ladder sooner rather than later

Cons 

  • If you’re not on the same page on what to buy, it can cause tension
  • Your property purchase can set you back financially and force you to delay wedding plans
  • There can be legal and financial risks if you don’t plan for it properly, this includes mortgage stress; agents’, legal and government fees you might not have initially been aware of, or even sale contract clauses that may not be in your favour

4 ways to get married AND save for a deposit

If you’re prepared to make sacrifices on the kind of wedding you want, you may be able to tie the knot and save for a deposit on a home at the same time. Here are our tips on doing just that.

  1. Look at your budget. This helps you figure out what you can afford.
  2. Create a savings plan. Set milestones for your goals, plan for how you’ll save for each one and where you might need to cut back.
  3. Agree on where you’ll compromise. In regard to the wedding, could you have fewer wedding guests to cut down on costs? Or use a non-traditional venue?

It’s a big decision, so plan ahead!

Choosing whether to get married first or buy property first can be a stressful decision for any couple – so you want to discuss your goals, be transparent about your finances and figure out what’s doable for your current situation.

It’s best to chat to a financial advisor about your situation, your joint income, and what might be the best solution for your circumstances and your life goals. You may want to consider protecting yourself with insurance such as life cover, and even consult a lawyer to find out the best way to go forward buying property as an unmarried couple.

Remember, everyone has different needs and goals, so when planning be sure to get as much information as you can. And, if you are looking to help protect yourself if something unexpected were to happen, Choosi you can compare a range of life insurance policies and home and contents insurance policies to help you find the best fit for your needs.

Disclaimer: Choosi does not compare the whole market.

Posted: 25 Oct 2021

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