100,000. That is the number of lay-offs in the Oil & Gas industry in the last 6 months as reported by the WSJ and more is expected to come throughout 2015. Companies are fighting to protect their business as the price of the oil has fallen by 50% since last November to 55$ today. While this is a nice gift for anyone going to the pump, it is a worrying sign for people like me working in the industry.
My company is cutting jobs, cutting budgets, cutting projects, freezing pay, limiting promotions and reducing many benefits.
Marrying in a rainy day
Despite all that uncertainty, we’re getting married next month (super excited!) and we aren’t concerned about our finances.
Some of my colleagues were also planning to get married this year. One had to sell company stock to fund the wedding and the other probably had to get into credit card debt to fund it, hoping for his bonus to pay back the debt. They were both part of the first wave and were let go in Q1. These are very difficult situations. Clearly not how the plan should have gone.
Expect the best, plan for the worst
But how can I blame them? According to a survey from TheKnot, last year the average cost of a wedding was 31k$ (excluding honeymoon) while the median household income was 53k$. A recent survey from Brides magazine even found that half of the couples said “paying for a wedding could hamper their plans for ‘buying a house or a car, starting a family, etc.'”
It looks like half of the marriages start with debt, basically relying on future potential earnings to cover that one special event.
There was no way we would be in that half. With or without this downturn.
How we managed
Early on we set a budget for the wedding and decided to put that money aside for that purpose. We knew we didn’t want to overspend, but we also didn’t have any idea what to expect.
For one, many of the costs are difficult to estimate because so much is based on quality and reputation (think photographers) and are difficult to appreciate until you get to look at the details. Second, there are so many things that you could add to make your ceremony, dinner, music, dress, … a little nicer that it turns into emotion-led decisions rather than financial ones.
When the downturn hit, it helped us re-focus on the financial side of things. We did what every company does: we negotiated costs down with every single one of our suppliers (reduction of 5-15% were common, 30%+ happened a few times) and we re-evaluated some of the expenses that were considered ‘nice to have’.
Today, we are right on budget and we feel like there are 4 elements that helped us manage the organization, stay on track financially and remain with a strong financial base :
- Know your finances strength : the analysis of our finances was done last year and since we had defined our Financial Strategy already, we knew what we could potentially afford to spend,
- Have a Budget and stick to it: since we have a goal to reach Financial Independence in 2022, we determined what budget we could use to remain aligned with this goal. According to the Brides magazine survey mentioned earlier, while 91% of the couples have a budget, 30% go over it. See what the average wedding budget is in your area (and the spend ratios) and be warned: it will be tough, but not impossible if you can track all your expenses.
- Use cash (not debt): the 2 points above would not have been enough to make us sleep properly at night in this downturn, but this one did. The entire wedding has been paid cash. Our reliance on future potential earnings is precisely 0$. And since we now have good control of our Savings Rate, our Emergency Fund will be left untouched and remains available for whatever could happen.
- Everything is negotiable : to paraphrase a post from FerventFinance that I recommend reading, if you do not ask for a reduction you are sure to get nothing. It turned out that asking for a price break was usually enough to get discounts. If you haven’t read it already, go over there to read his post on “Anything is negotiable“.
What projects are you working on today? Are you having difficulties financing them?
-Nick
Photo credits: Nate2b and Max Klingensmith
Oh… I did not know you worked on oil and gas. Though environment with the lay offs. congrats on your wedding!
Thanks Nina! The industry is not doing very good right now but hopefully it will stabilize later this year.
Such an exciting time! Congrats on being so reasonable about planning your wedding, when so many people get caught up in the emotion and let go of all reason. If it helps, in these final weeks of planning — we’ve been to a lot of weddings, and the best and most memorable ones are always the more casual ones in which people didn’t try too hard or obviously spend too much. So stay strong and just say no to those last-minute temptations. 🙂
Thanks for the advice, the last minute temptations will hopefully not be too many!
I’m a little late to the party, but congrats on the wedding! What I can see people struggling is the fact that they want to do what their parents/relatives/tradition wants even though it doesn’t align with what a couple wants. A great wedding is one you are happy with that fits into your financial goals as well (if the couple is footing the bill). Thanks for the shout out.
Hello FF – We have been lucky I think, as our families didn’t try to impose anything on us but instead were very involved and helpful in the organization and supported our decisions. It eventually turned out better than we expected.
Thanks for stopping by and leaving nice words!