Why I’m NOT Saving for Three Weddings

It’s a Thursday night and I’m helping the two youngest of my three girls get ready for bed. They are mostly on auto-pilot at this point—these two are 10 and 7—so I’m able to mostly just supervise. Any my mind wanders. I’m thinking about how much easier it has been for us to have three kids all of the same sex. Three girls. That led to great economies of scale, both in terms of the necessary equipment (clothes, sky-blue bikes with flowers, etc.) and our own learning about parenting (different emotional skills necessary). But then I immediately recalled the numerous conversations that I’ve had over the years where it was clear that other people did not see our uni-sex kid-set as a blessing, but more of an unlucky curse. “Oh my goodness, three girls? Wow, how will you manage that?” (complete with sympathetic and friendly frown/smile and a pat on the shoulder). 

At first my somewhat ignorant reaction was something like “oh no, you don’t understand. I come from a family of all boys. Girls are much easier. They get in less trouble.” (I still think that is mostly true, by the way. But now that we have one that is right in the thick of middle-school drama, I see the price that you pay for avoiding the more psychologically simple problems that accompany boys). But eventually I came to understand the real meaning of some of the comments that conveyed sympathy for a multi-girl household: it was financial. Most people assume that girls are more expensive than boys—dramatically more expensive—because of the requirement that you spring for a big fancy-ass wedding for each. (Remember what Freedomville looks like: an upper-middle class suburban enclave of a big city where everyone proves their worth by doing the same things. Luxury cars every three years; private tutors so Sally can go to Harvard; and big fancy weddings to prove that you’re rich). It took me a while to understand this perspective because, well, it never crossed my mind that we would do such a thing. 

Financial Planning for Large Future Expenses

It was never an option for us to change our financial lives in order to plan for three big parties that we would throw at some point in the future, all to celebrate a union with some dude that I probably will not like very much. 

Now don’t get me wrong—I’m fervently in support of anticipating large future expenses and then taking incremental (daily even) financial steps to meet them. Especially so when the government offers me tax incentives to do so. We maxed out 401(k) contributions from the first day of work. We gave up consumption in order to regularly fund 529 accounts that I opened for each of our girls the day that I first got home with the hospital with their identification information (note: you can open them even earlier than this if you want . . . even before they are born!). 

So why is college expense different than wedding expense? The answer to this seems as obvious to me as the original title of the post (“Big Expensive Weddings Are Dumb”), but undoubtedly there are people that will be confounded by both of these ideas. Aren’t they both societal norms that we are obligated as members of the herd to follow without question? We all know at this point that college costs are exponentially overstated, driving families and individual students into massive debt, often for disproportionately small returns. If you decide that you’re free from the bondage of societal norms that mandate that the father of the bride foot the bill for all the booze that the groom’s mates want to consume at the wedding, then why not conclude that you’re also free from today’s pervasive norm that everyone must go to college (the more expensive, the better), and that the parents must work till they die to pay for it?

Good questions. Allow me to retort. First, while I think that both of these expenses are ridiculous in that they are dramatically inflated by comparison to the inherent value that you receive as the consumer, college costs are nevertheless still mandatory as something of an admission fee. While I have no doubt that a degree from Harvard is worth nowhere near the $185,000 (or more) price tag that it brings in terms of educational value, I cannot ignore that it opens doors to opportunities that would otherwise not be opened. And this concept is true down the chain of schools, with less prestigious degrees opening less prestigious doors, all the way down to the point where you have no degree and thus lots of closed doors. I know this to be true because I’ve been there—on the ground inside the white-shoe law firm reviewing the stacks of resumes that come in. Degrees from certain institutions open doors, period. You still have to prove your worth, no doubt, but you are given an opportunity (and probably even a little more room for error) based strictly on a certain pedigree. 

So while I don’t harbor any wish that any of my girls will grow up to inhabit an entrapment chamber on the 60th floor of a shiny high-rise building in midtown, I do want them to have the opportunity to decide what they want to do. And if one or more of them decided that they wanted to work as an attorney at a BSD law firm with a huge starting salary for a decade so they could reach FI as quickly as possible, I’m not sure that would be an irrational decision. As long as they knew what they were getting into at the start, and did so willingly. (But I will continue to assert that finding a productive passion is a superior and more sustainable route.)

Sidebar: Regarding those big stacks of resumes that come in to the white-shoe law firms. I once heard Peter Thiel—who spent some time at one of the big New York white-shoe law firms—say that everyone outside of these organizations is trying to get in, while everyone inside is trying to get out. I thought that was pretty accurate.

While I continue to stand by my prior assertion that the cult of college-prestige worship and the accompanying exorbitant, wealth-destroying costs are ripe for someone to call “BS!”, we have not yet reached the point where it is economically irrational to continue to play the stupid game. 

Not so for wedding expenses. I’m sure that this cultural norm has its origins in a perfectly rational historical context. You know, something like: the father of the bride pays for the wedding expenses along with conveyance of a dowry including two goats and an acre of farmland because the husband then assumes the burden of supporting her for the rest of his life. Fine. But that time is long gone. We’re raising our girls to be independent—financial and otherwise—and while I do expect (and we will encourage) that they have respect and admiration for the institution of marriage and all of the benefits that it conveys, they will not view it as something that is necessary to prove their worth or identity. They won’t leave here believing that finding a husband is their primary objective. Instead, if we’re successful in conveying our values to them in this regard, they will view it as a partnership based on equal respect and duty. And the first joint decision that this partnership will have to make together is how much to sacrifice for consumption at the event that memorializes and celebrates the creation of the partnership. To tell them that we’ll go out and drop tens of thousands of dollars on a party to start them off would send the wrong message—in addition to being financial malpractice. 

Sidebar: A recent study indicated that parents save more for the college education of their male children than their female children. This is inexcusable. And as I write this I wonder whether it could be attributed to the fact that parents are splitting their savings for their female children between college and wedding funds.

Humane, But Not Human

Joe, you may ask, are you cold and heartless? How will you respond when your daughters ask you how much you have put away for their eventual nuptial festivities? 

By the time any of my girls have the thought to ask this question, they will have long understood our views on money, and how we evaluate the use of capital by comparing its current utility and value in consumption to its future value (i.e., its ability to continue working for us for decades as a golden-egg laying goose). I suspect I won’t get this question, or if I do it will be rhetorical. Something like “hey dad [wry smile], how much have you saved for our wedding fund? Ha ha.”

This is common sense, and I have a hard time understanding how anyone could reach a different conclusion. Especially in light of the fact that I know from the data that we are better off financially than nearly all of our peers. So why will Under-Accumulating, Over-Consuming Neighbors Next Door eventually spend tens of thousands of dollars on a big party that effectively flushes huge chunks of Freedom down the toilet all at once, when they still are under-funded for future obligations like retirement (and maybe still paying for college in the form of debt held either by the parents or the bride)? 

The answer, of course, includes all of the things we talk about here regularly at Trapped In Work: herd mentality, peer pressure, Facebook inertia, etc. But let’s add another academic gloss to it with the idea of behavioral economics. I have long been a fan of the academic field of economics, mostly because it always seemed to me to be so logical. This is a pursuit that is founded upon the idea that people act in their best economic self interest—that is, they make decisions about economic (including financial) matters in a way that considers all relevant costs and benefits, and then chooses the option that results in the greatest net benefit. The field even created a fictional character to represent this absolute rationality: Homo Economicus. Or “Econ” for short. But something went awry. The field (or some outside the field) began to notice that real people didn’t actually behave like Econ. They weren’t perfectly rational. Their emotions got in the way of making decisions that resulted in the greatest net benefit. This realization resulted in the creation of an offshoot academic field: behavioral economics. This field looks to combine traditional economic theory with modern psychological principles, looking to shape outcomes based not on how our friend Econ will act, but based upon how real people are likely to act. 

My reading in the field of behavioral economics has led me to conclude, somewhat startlingly, that I am Econ. I had a Eureka! moment when I was presented with the (now obvious) reality that most people don’t behave rationally, at least not consistently. This is something that is still hard for my Econ brain to understand—it is irrational that people don’t always behave rationally—but I’m coming to terms with it. 

And the application here is this: people love a party. And they don’t want their kids to think that they don’t love them as much as the Joneses love their kids. So they do things that are economically irrational. They throw $50,000 parties to celebrate a marriage between naive, ignorant, and irrational 20-somethings. 

I once read something that Benjamin Graham’s daughter said about him. Graham is the legendary investor and author of the hugely influential book The Intelligent Investor. He also is credited with being Warren Buffet’s mentor. In describing her father’s uncanny ability to behave with respect to his investment activity with an apparent total absence of irrational emotion, his daughter characterized him as “humane, but not human.” My understanding is that this was intended as a great compliment. In applying my own emotion-free logic to our decision making, I’m also seeking to be humane, but not human. 

Quantitative Value

Roughly 19 years or so ago Mrs. JF and I were in the process of planning our own wedding. Her father apparently understood the long-term value of golden-egg-laying dollar bills, and when he saw the apparent cost of the wedding that was being planned, he offered us the option of taking the cash in lieu of the party. I was frugal then, and I urged Mrs. JF to consider taking the cash option. But alas, I had no real say in the matter and the party was on. It was probably five years or so after the party that Mrs. JF turned to me one day and confessed that she wished she had taken the cash. Ouch. 

I don’t have Quicken-style precise data on this, but my best guess is that our wedding cost her parents in the range of $35,000. This included roughly 200 attendees, a snotty country-club setup, lots of premium booze, full buffet spread (that we didn’t get to eat), multiple fancy cakes, and all the other trimmings. If that $35k had been invested at the time it was spent (18 years ago) into VTSAX (VTI was still a few months away from being created) and then grew at the annualized rate of 6.86% plus the dividend yield of 1.78% (for a total of 8.64% annualized), we would have $155,555 today. Or roughly the equivalent of four years of college education at a $40k-per-year institution. A serious ouch. 

One more painful spreadsheet-future-value-calc exercise: Just days ago Mrs. JF pulled some glasses out of that segment of our cabinetry that we NEVER visit. You know, the area where we keep the fine china and crystal that we don’t use. Ever. But we apparently put a lot of that crap on our wedding-gift registry. The liquid-containers that she pulled out were four champagne flutes from Tiffany’s given to us as a gift by a friend of her parents. Today they run $120 for a set of two, so I’m inferring this group of four retailed for $240 about 18 years ago. That’s $1,066 today. I may spend some time this week looking into the secondary market for never-used Tiffany’s champagne flutes. 

Conveying Lessons About Our Values

If you spend 25 years teaching your kids through your behaviors that status symbols matter; that consumption is what you do with your money; and that the route to contentment and fulfillment is buying stuff, then you shouldn’t be surprised if they hate you when you announce to your daughters at age 25 that you’re not paying for the $35k wedding throw-down. They will want it, and they will have reason to expect that you will pay for it. 

We have been working for many years now to not end up there. In fact, I am moderately optimistic that by the time our girls reach that point in their lives, they won’t want to burn money on such a low-value, low-return exercise themselves. We are teaching them to respect money. To appreciate what it can do; and to understand what it cannot do. It can be a goose that lays golden eggs for you in perpetuity. It cannot buy you contentment. But it can buy you Freedom. And Freedom can provide you with an opportunity to find contentment. We’re also teaching them, slowly but surely, incrementally every day, that if you believe that you need a $35k party on your wedding day in order to be content, well, you will likely never be content.