Borrowing to pay for a wedding, college

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Q. My daughter is getting married and we want to pay for the wedding. If we do, it will interfere with us paying for college for our two youngest kids. We would have to borrow for one or the other. Which should we do? Borrow for the wedding or for college?
— Poor Dad

A. Congratulations on the many happy life events for your family — but they’re going to cost you.

The Knot’s Real Wedding Study from last year showed that the average U.S. wedding cost more than $35,000, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

This is beyond the budget that most families can afford to pay.

“As parents, you shouldn’t have the sole responsibility for the wedding costs,” D’Agostini said, quoting the same study, which found the bride’s parents paid only 44 percent of the costs, with the couple chipping in 42 percent and the groom’s parents providing 13 percent.

D’Agostini said it’s time to have a conversation with all the involved parties and share with them the amount that you can afford.

“With any major purchase, I would first consider what you have in savings to pay for this,” she said. “If you do not have savings, I would caution you against going into debt for the wedding. Rather, I would structure the wedding around what you can afford.”

She said you should start with a budget and prioritize those things that really matter to you. Choose a venue that you can afford, or host a wedding at home, she said. Limit the number of guests that you invite, and perhaps create a playlist that could be played rather than engaging a DJ or band. Other ways to save would be to have an afternoon lunch event instead of a sit-down dinner.

“A personal loan is a last resort, as this will be more costly, and with college, will compete with the monthly fees for college,” D’Agostini said.

Ah yes, those college costs.

The average cost for college for the 2016/2017 academic year was $33,480 for private colleges, over $30,000 for in-state tuition at Rutgers and close to $25,000 for out-of-state tuition for public colleges, according to The College Board.

“Again, I would first look to what you have already saved for college, including 529 Plans, UTMAs and your other savings,” she said. “Before your children apply, I would see what you can afford from savings and current income, and then settle on the amount that you would have to finance.”

Of course, you will fill out the FAFSA form, which is now available on Oct. 1 of each year, and you will see if you can get any loans, grants or scholarships from the schools.

She said you have a better chance of obtaining academic scholarships from schools that are at or below your children’s academic profile, so be sure to have them apply to them as well.

“Before taking out any loans, I would consider your age and ability to pay them back,” she said. “Be careful not to sacrifice your retirement for college expenses. It is best to get into a situation that you can afford from the outset, and that you will be able to repay.”

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.