Too often, people spend based on their feelings rather than what makes long-term financial sense.
Before the pandemic, I had a hard time convincing couples that losing thousands of dollars on a wedding they really couldn’t afford was financially irresponsible.
You can’t put a price on your happiness or a lifelong memory, they would say.
Others proudly pointed out that they had saved up for their big day. But such proclamations don’t impress me if you have five or six figure student loan debt pending when you return from a honeymoon in the Caribbean. A wedding shouldn’t destroy your emergency fund.
So with that in mind, I was intrigued by a new Netflix show that debuts Wednesday called “Marriage or Mortgage”.
The reality show involves a friendly competition between wedding planner Sarah Miller and real estate agent Nichole Holmes. In each episode, Nashville-based professionals help couples choose between their dream wedding and their dream home.
The show was filmed before the coronavirus closures and restrictions, but once things get back to normal, couples will again have to decide whether to fork out money for a wedding or use their savings as a down payment on a house, the hosts told me. in an interview.
As I sat down to preview the 10-part series, I was sure I would hate it, but I was fascinated as I waited to see what people would do. If I wasn’t afraid of breaking my TV, I would have thrown my shoe on the screen a few times while watching. Kudos to the producers and hosts, as you will be surprised which couples will opt for the wedding and which will choose for the home.
My husband and 25 year old daughter watched “Marriage or Mortgage” with me. About 15 minutes after episode 8 started, my daughter couldn’t take it anymore. She grabbed the remote to fast forward to the end to see if a couple, together eight years old and living in a two-bedroom apartment, would choose to spend $ 20,000 on a wedding, with $ 4,900 budgeted for a wedding dress. .
For the sake of full disclosure, I bought my wedding dress from a consignment store for under $ 200. There was no open bar. I told customers who complained that they could go home and drink their own alcohol.
It was so funny how frustrated my daughter got, having a hard time figuring out how a sales operations specialist and Uber driver would choose an expensive wedding celebration instead of taking the $ 20,000 and using it as a down payment on a four bedroom house with a spacious yard. for them and their two young sons. Saving so much money wouldn’t have been easy for them, my daughter said.
My husband left the room at the same time muttering, “Crazy concept. It’s obvious. I’m outside.”
Mortgage rates are near historic lows. On Thursday, the average interest rate on a 30-year fixed-rate mortgage was 3.02%, according to Freddie mac, the federally chartered mortgage investor.
The choice between a day’s party and homeownership to build wealth was obvious to us.
It was clearly not that easy for the low profile couples, who had saved up to $ 35,000.
“How do we choose the day we want and the future?” said Nicolas. He and his fiancee, Denise, are torn between having an Elvis Presley-themed wedding and taking the $ 25,000 they saved and buying a house.
A bride-to-be says, “My head and my heart are going in two different directions.”
Cue yells for me: “Pick your head, fool!”
Those of us who help people make wise financial choices are often bewildered when people let their feelings drive such an important financial decision.
Miller, the wedding planner, almost made me understand why couples were getting married.
“You get to know these couples and what is important to them,” she says. “I’m not in this business to trick people into making bad decisions and going bankrupt or into debt. People who come to me, we try to widen their budget as best as possible and we really help them and guide them in the direction so that they don’t go over their means.
I admit, I got involved in the series. I wanted to see how each couple came to the decision they made. In many ways, this show is all about behavioral economics, an area of study that examines the psychology behind the decision-making processes of individuals. People often make choices that are not in their best financial interests.
“Speaking of the most realistic, linear-thinking person that I am, I just see taking that amount of money and investing it in the property with the potential to grow which is a no-brainer, ”said Holmes. “But that’s why this show is so amazing and why I think so many people go looking for the mortgage, or the hopeless romantic in the world who says, ‘How could you give up your big day for a mortgage? It doesn’t sound like a lot of fun. ”
So where am I on “Marriage or Mortgage”?
I think it will delight romantics and disgust the pincers.