By Susan Tompor
Ashley Matusz and Joe Fisher, both 24, have talked over how they'd cut $800 off the flower bill for their wedding reception. They're opting for light pink peonies in modest centerpieces, instead of tall, opulent pedestals overflowing with exotic flowers.
They're saving another $1,000 or so by not buying any flowers for the church. Flowers from a wedding the day before will likely be left behind anyway at the Church of the Divine Child in Dearborn.
But the really big budgeting headaches will hit after their wedding on June 15. Ashley, who is working her way through Wayne State University's medical school, is expecting to bring up to $130,000 of student loans into the marriage once she finishes school.
Many young couples are dealing with delicate conversations about debt, such as student loans, credit cards or other debt - or financial experts say they should be having those discussions this wedding season. It's best to come clean before saying "I Do" when it comes to what some call the anti-dowry - or when you bring debt to the marriage.
"Ever since the beginning, I was like 'You know I'm going to have a lot of debt,'" said Ashley, who told Joe about her plans when they started dating a little more than two years ago. She has completed her first year of medical school.
"I see it as both of our debt, not just her's," said Joe Fisher, who works as a market research analyst for the Paul's TV retail chain in Warren.
About two-thirds of college grads in the Class of 2013 will graduate with some student loan debt. The average debt is about $28,000.
"It's a matter of understanding what the impact of those debts are," said Wayne B. Titus III, a member of the Michigan Association of CPAs financial literacy task force.
Titus, an owner of AMDG Financial in Plymouth, said full disclosure is needed when a couple marries. He even recommends planning "money dates in addition to movie dates" to keep the marriage on a financial track. Couples need to understand how much debt they owe and plan a schedule of how they're going to make payments.
Everyday life, of course, comes with its own set of bills. Ashley Matusz and Joe Fisher will pay rent of about $850 a month for a 625-square-foot apartment in midtown in Detroit. They may need to spend $5,000 on a Ford Focus that's coming off lease and trade in Joe's 2006 Saturn Vue, which has 158,000 miles. They're not considering buying a house yet because they don't know where they'd want to live when Ashley gets out of medical school.
"Sometimes, to be flexible, the best thing is not to buy a home," Titus said.
But what will all those student loans end up costing?
Ashley isn't certain how much her monthly payments will cost. She's borrowed $60,000 so far for the first two years of medical school and expects to borrow another $70,000. She knows the rate is 6.8%. Joe Fisher makes about $45,000 a year and they plan to live on his paycheck, not borrow more for living expenses through student loans as some graduate students do.
But consider $130,000 in student debt at 7%. In that example, a student debt borrower could end up paying about $1,500 a month for 10 years or $1,000 a month for 20 years, according to Mark Kantrowitz, a student loan expert and publisher of Edvisors.com.
Or there could be a monthly payment of $865 if the student loan debt is paid over 30 years.
For some couples, a heavy student debt load has meant postponing marriage. About 7% of adults who took out college loans said they delayed getting married or starting a family because of their need to pay back the debt, according to a 2011 Pew Research study.
Lauren Locker, a certified financial planner and chair of the National Association of Personal Financial Advisors, said anyone who is getting married needs to discuss how they're going to deal with debt.
The average wedding costs $28,400 - close to the average amount of student loan debt. If couples borrow for the wedding and one has the average amount of student loans, they could be $56,000 in debt before they share the first slice of wedding cake.
For many young couples, she said, expectations for how much money one can make or how well one can live are not in line with real life. She blames the beautiful lifestyles often shown in the media. Most of the country cannot afford to live like that without going too deep into debt.
"The biggest issue that happens, and honestly it doesn't make a difference if you're 22 or 42, people don't want to talk about money. It's distasteful," Locker said.
She recommends that couples don't merge all their money into one account. It's too convenient to put all the responsibility and bills on one person. Both need to work out the budget and how bills will be paid. If one person makes $30,000 and another makes $80,000 a year, you don't split the rent bill in half, she said.
Even more key, she said, couples have to ask: What's the plan? What's the goal and strategy for paying off debt?
"They have to make a plan. What are you going to sacrifice to get out of that debt?" said Locker, who founded Locker Financial Services in Little Falls, N.J.
"It doesn't go away."
Ways to start talking about money as a couple:
Trying to get out of debt? Run some numbers via a free non-profit web site to review plans for paying off debt. See www.powerpay.org.
Consumers can find articles on financial literacy and money management, as well as find a certified public accountant in Michigan at www.michcpa.org. Or seewww.findacpapfs.org.
Fee-only financial planners can be found at www.napfa.org.
The Consumer Financial Protection Bureau offers information online about taking outstudent loans and repaying them after graduation. The site can also help you figure out what kind of student loans you have already. Or see www.studentaid.gov.
Source: Free Press research