Financial planning is really about… helping your clients avoid costly mistakes

We were stunned, but perhaps heartened, to come across a page on the ASIC Moneysmart dedicated to the high cost of weddings. ASIC calculate that the average cost of a wedding in Australia is $36,000.


What’s more, ASIC also point out that up to 78% of people go in to debt to afford the big day.

This high cost can have serious impacts down the track. Remember, the average woman has a little over $40,000 in super, and retires with just $110,000 in super benefits (compared to men who have just under $200,000).

People go to some lengths to pay for this wedding. 12% put off buying a home; 7% put off having a baby. 10% sell a car. 6% put off having the wedding!

It is worth thinking about what other uses this money could be put to. The most obvious is probably the fact that this money equates to between 5 and 10% of the median purchase price in most major cities in Australia. It may be that Australia’s housing affordability ‘crisis’ is more of a wedding affordability problem.

More strategic solutions would include things like:

  • Having a $6,000 wedding (which would still be quite a party) and salary sacrificing a grossed up equivalent of $30,000 into super. Remember, the wedding is not tax deductible. That $36,000 is after-tax;
  • Using some of this money to buy income protection insurance for the young couple (probably saving enough to cover insurances for the rest of their lives);
  • Asking mum and dad to use the money that they would otherwise have contributed to the cost of the wedding (56% of parents pay at least some of the cost) to finance increased deductible super contributions. This gives mum and dad a tax break, which increases the amount that can be contributed, and their likely proximity to age 60 means that that money may well soon be available for withdrawal from the fund and used to pay an even larger amount of deposit on a property. The tax break supercharges the deposit.

A young person’s wedding is a sensitive topic. And it is true that in many cultures a wedding is not just a wedding. Advisers may need to tread warily when it comes to discussing weddings. But if clients can be helped to avoid excessive spending, this is the same as clients be assisted to make money through investment.

The Dover Group