A Wedding From HEL

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 OK, I thought. At least they are talking in terms of cash.

Then the bride dropped the bomb: Because she’s in her mid-thirties and 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; a home equity loan (also known as HEL, curiously) would be the way to go. They didn’t say, but I got the feeling it was his home equity she is eyeing.

The bride-to-be said rather nonchalantly, “Forty-eight thousand isn’t really that much to pay back. I don’t think it would be that hard.”

I couldn’t help wondering: If coughing up $48,000 in big monthly payments after the fact wouldn’t be a problem, then why hasn’t she been saving that kind of money all along? I ran some numbers on a $48,000 HEL at 8.5% on a 15-year schedule and discovered it would be around $475 a month … for 15 years! And let me do the math on what that $48,000 will look like including interest: $475 times 180 equals $85,500. Their kids will be 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?!” pointing 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 backyard barbecue nuptials in mind. Actually that idea has real possibilities.

Have you ever been up to your eyeballs in HEL? Unlike our bride-to-be who obviously never has, it’s not that easy to repay a high-interest HEL in full. 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 to pick up your cash.

Home equity is one of those things you should consider out of reach for now. For most people, it 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 so foolish. The goal of homeownership should be to one day actually be a homeowner, not just a “mortgageowner.”

I sure hope Dr. Phil did a follow-up show on our couple. I’ve got my fingers crossed that they heard him loud and clear. The best gift they can give one another for their wedding is a receipt stamped “paid in full.”

Marriage is tough enough without complicating it even further with a heavy load of debt. Or, as my late friend Florence Littauer put it, after every wedding comes a marriage.