Did you happen to catch the episode of "Dr. Phil" on weddings? One couple was having a major disagreement over the cost of their impending nuptials and came to Dr. Phil to help them find a solution.
He has $2,500 in savings; she has none. That's not so bad, I thought. At least they are talking in terms of cash.
And then the bride dropped the bomb.
Because she's in her mid-30s and she has waited so long to get married, she feels absolutely entitled to the lavish wedding of her dreams, complete with Ecuadorian roses to the tune of $7,000 — and I mean just for the roses. She said the wedding she has her heart set on will cost $48,000.
You should have seen the look on her fiance's face at the mere mention of that price tag. He was visibly mortified. She went on to say that she wouldn't dream of putting this expense on credit cards but a home equity loan (curiously also known as HEL) would be the way to go. They didn't say, but I got the feeling it was his home equity she is eyeing.
She said rather nonchalantly, "$48,000 isn't really that much to pay back. I don't think it would be that hard."
I couldn't help wonder: If coughing up $48,000 in big monthly payments after the fact wouldn't be a problem, why hasn't she been saving that kind of money all along? I ran some numbers on a $48,000 HEL at 7 percent on a 15-year schedule and discovered it would be about $285 a month ... for 15 years! Their kids will be getting ready for high school and she'll be turning 50 before they finish paying for their wedding.
Dr. Phil was great ... counseled them exactly right (like he needs my stamp of approval). I recall his reaction was something close to "Are you out of your mind?!" and he pointed out the typical wedding ceremony lasts for about 30 minutes.
He went on to advise that they should do whatever they must to keep the cost of the wedding within the limits of the cash they have. I believe he sided with the groom, who had a backyard barbecue wedding in mind. Actually, I thought the idea had real possibilities.
Have you ever had a home equity loan? Unlike our bride-to-be, who obviously never has, let me tell you they're not that easy to pay back. Oh, I know, lenders make it sound like your home equity is a stack of $100 bills sitting in a vault somewhere just waiting for you to come down and pick up.
Home equity is one of those things you should consider out of reach for now. For most people, home equity is the one appreciating asset they'll ever know during their lifetime. Nibbling away at it to pay off credit card debt, a vacation or a wedding is just foolish. The goal of homeownership should be to one day actually be a homeowner, not a forever mortgage owner.
I hope Dr. Phil does a follow-up show on our couple. I've got my fingers crossed that they heard him loud and clear. The best wedding gift they can give each other is a receipt that says "paid in full."
Marriage is tough enough without the complications of a heavy load of debt.
Mary invites questions, comments and tips at [email protected], or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate webpage at www.creators.com.