Chris Foster-Ramsay: A modern love dilemma - tie the knot or buy the block?

Wedding season is now in full swing, but in a cost-of-living crisis, more and more couples are asking themselves: “Is it really worth it?”

Having a party with 100 of your nearest and dearest to celebrate your love is a fabulous idea, but it’s also ridiculously expensive.

And because of that, many couples are opting to defer their nuptials and are making the decision instead to build long-term wealth together through homeownership.

With wedding costs and property prices continuing to soar every year, many couples are finding they have to choose one or the other because they just can’t afford both.

So, what are the pros and cons of each option, and which path might be more beneficial in the long run?

Wedding versus house

According to the Australian Securities and Investments Commission’s Money Smart website, the average cost of a wedding has climbed to between $36,000 and $51,000. This substantial sum could alternatively serve as a sizeable downpayment on a property.

With the average home price in Australia now hovering around $973,300, a 10 per cent deposit would require about $97,330.

These figures paint a stark picture of couples’ financial choices today.

I do, I do, I do …

Weddings hold a special place in our culture, representing a significant milestone and a chance to celebrate the coming together of two families and sets of friends.

For many, it’s a once-in-a-lifetime event that creates lasting memories. The wedding industry argues a well-planned celebration’s experience and emotional value justify the expense.

But does it?

Wedding pros:

• Creates lifelong memories and experiences.
• Opportunity to gather loved ones for a joyous occasion.
• Can strengthen family bonds and friendships.
• Potential for generous gifts that may offset some costs.

Wedding cons:

• High cost for a single-day event.
• Potential for financial stress and debt.
• May delay other financial goals, including homeownership.

Home sweet home

On the other hand, investing in a home offers tangible long-term benefits and wealth creation. Real estate has historically been a solid investment, providing both a place to live and the potential for capital appreciation.

Homeownership pros:

• Build equity over time.
• Potential for property value appreciation.
• Stability and security of owning your own home.
• Possible tax benefits.

Homeownership cons:

• Significant upfront costs (deposit, fees, etc).
• Ongoing expenses (mortgage, maintenance, taxes).
• Less flexibility compared with renting.
• Market fluctuations can affect property value.

The $50,000 question

Let’s consider a hypothetical scenario in which a couple has $50,000 saved. This amount could fund a wedding or serve as a partial deposit on a home.

In the current market, $50,000 would cover about half of the average 10 per cent deposit required to buy a home.

Investing this sum in a property could be a wise financial decision. It puts the couple on the path to homeownership, potentially saving them money in the long run through building equity rather than paying rent.

Additionally, with various government schemes available for first-homebuyers, such as the First Home Guarantee Scheme, couples may be able to enter the property market with as little as a 5 per cent deposit.

But we also need to consider the couple’s current living situation and their plans.

If they’re content renting and see themselves moving in the near future, tying up funds in a property might not be the best choice. In this case, a wedding could be a more appropriate use of their savings, especially if they can keep costs under control.

The middle ground

Fortunately, this doesn’t have to be an either/or decision.

Many couples are finding creative ways to have a memorable wedding and work towards homeownership.

Some simple ways to do this are:

• Opt for a smaller, more intimate wedding to reduce costs.
• Delay the wedding to save for both goals simultaneously.
• Consider alternative wedding venues or off-peak dates to save money.
• Explore government assistance programs for first-homebuyers.
• Prioritise saving for a home deposit while planning a longer engagement.

While there’s no one-size-fits-all answer to this question, from a purely financial perspective investing in a home often makes more sense in the long term. A house is an asset that can appreciate over time, whereas a wedding, while emotionally valuable, is a one-time expense.

Personal values and circumstances should guide this decision. Some couples may find the joy and memories of their dream wedding outweigh the financial benefits of immediate homeownership.

Others may feel securing their financial future through property investment is more aligned with their goals.

Ultimately, the key is to make an informed decision based on your unique situation, values and long-term objectives.

Open communication between partners about financial goals and priorities is crucial. Whether you choose to say “I do” or “home sweet home” first, ensure your decision aligns with your shared vision for the future.

With careful planning and budgeting, it’s possible to achieve both goals over time.

The most important thing is to start your life together on a strong financial footing, whether that means owning a home, cherishing wedding memories, or finding the balance somewhere between the two.

Chris Foster-Ramsay is the founder of Foster Ramsay Finance