Should I spend savings on honeymoon or save for a future goal?


I'm getting married later this year, and I was curious how much money should we be spending on the honeymoon. I have some money in savings accounts that I am expecting to use but the real question is how much of that should I use? We're planning to get an apartment once we get married so I don't have to worry about a down payment on a house for a few years.

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Congratulations on your upcoming marriage.  What a wonderful time and I wish you all the best of luck and happiness.  Also, let me say congratulations on even asking the question about how a present financial decision can impact your future.  Many people just go on the honeymoon, rack up debt and worry about it later.  You have chosen the wise approach. 


The answer to your question depends.  It depends on how much you have saved and what your other goals are.  It sounds like you want to buy a house in a few years so I would recommend not paying for a honeymoon for the next 30 years or even longer.  Let me explain why I say that.


I'm going to compare the cost of two vacations.  I'm going to assume a one-week beach honeymoon leaving from San Antonio (where I live).  The first is to beautiful South Padre Island Texas (within driving distance) and the other is to the Bahamas (must fly there).


South Padre Island Honeymoon cost:  $2,500

Bahama Honeymoon cost: $5,000


Now, these are just estimates but let's see what that $2,500 difference means to you if you take the following courses of action:  1) Use for down payment on home and 2) Save it for your retirement


1.  If my mortgage is a today's rate of 4.56%, that $2,500 would cost you $9,500 over the life of your loan.


Now, let's change course and say that you put that $2,500 into a Roth IRA for your retirement which we will assume to be 40 years away. 


2.  If you earn an average of 6% interest over that time frame, that $2,500 turns into $25,000. 


As you can see, the question to ask is how more important is that extra nice vacation over a nice one.  I agree that the Bahamas is much nicer than South Padre Island.  However, to me, it is not $25,000 more valuable or even $9,500 more valuable as that is the difference it could make in my home payments or my retirement. 


But remember that only you can make that decision since the determination of "value" is different for every person.  Just realize how that money can impact your other goals and make a decision that you can sleep with at night.


Have a great marriage and fun honeymoon!!