Financing a wedding dress: A cautionary tale from my FIL

One of the best things about visiting the relatives is all the sweet sweet gossip about people I don’t really know.

Here’s a cautionary tale about money, weddings, relatives, and 12 months same as cash.  My FIL shared it on the long car ride back to the airport.

Cast of characters:
John:  DH’s relative
Marsha:  John’s fiance (now wife and former childhood sweetheart)
George and Martha:  Marsha’s parents
FIL:  DH’s dad

John and Marsha graduated college (with debt loads) and decided to get married.  Martha was delighted because she had always dreamed of having a fairytale ceremony for her daughter, even though, as a checkout person at a big box store, Martha expected John to pay for that dream (this is an entirely other story, but Marsha says that if she ever divorces John she will never get married again because the first wedding was so stressful).

The one thing that George and Martha said they would pay for was Marsha’s fairy-tale wedding dress.  We don’t know the exact numbers, but it was a great deal more expensive than my $200 prom dress.  John and Marsha bought it under 12 months same as cash with a 24% interest rate after that.  Not reading the fine print, they didn’t realize the rate was retroactive if the dress was not paid off in that time frame.  But, they figured the interest rate wouldn’t matter because George and Martha were going to pay the bill in full as soon as it was due.

FIL suggested that John and Marsha pay the monthly installments on the bill directly to the company, even without the interest, so that it would be all paid off within a year.  Then they could just take George and Martha’s money for the dress and put it in a savings account at the 12 month mark.  (I piped up here and said, they could even just pay it into a directed savings account so they would have that lump sum at the 12 month mark, FIL agreed that would have been fine too).

Well, you can probably guess what happened.  George and Martha didn’t have the full amount for the dress at the 12 month mark.  John and Marsha didn’t either, because it hadn’t occurred to them that Marsha’s parents wouldn’t have the money on time.  The 24% interest rate kicked in and they were on the hook for a lot more money than they had planned (and it took a while for John to figure out why they were being charged retroactively).

George and Martha eventually did send the check for the original amount, but John and Marsha could have bought an entirely new prom dress and more with the amount of interest they had to foot themselves.

Now maybe George and Martha wouldn’t have actually paid for the dress if John and Marsha had paid the bill first, so maybe that behavior was optimal and the extra money was just the cost of commitment to the relatives.  But it’s still a good idea to have a large enough emergency fund to cover for when other folks, especially relatives, don’t get their payments in on time.

Additionally,  always read the fine print and be very careful with anything that is “X days same as cash.”  Companies lose less money than one would think on those deals.

And that’s a cautionary tale from my FIL.

My FIL also wishes us all to know (courtesy of an entirely different relative) that if you don’t show up to work, it is difficult to keep a minimum wage job.

Do you have any fun bits of wisdom you’ve picked up through family?  Any good gossip?  Ever had a problem with folks not following through on a monetary promise?  Someone else force their wedding preferences on you?


14 Responses to “Financing a wedding dress: A cautionary tale from my FIL”

  1. Everyday Tips Says:

    My family is so darn small that we all fit at one dinner table! (My own family that is.) I am actually the ‘communicator’ of the family, so I hold all the knowledge. A bitter divorce happened in my husband’s family so we don’t really see many people in his family either,and they would never gossip. Everything is a big secret – boring!

    This is exactly what happens when you plan for someone else to pay your bills! Even if it works out for you in the end, depending on others causes so much stress!

    • nicoleandmaggie Says:

      DH’s family almost all lives in the same small rural town, so they all know quite a lot about each other. My family is scattered across the country so we only hear things in bits and pieces. Only major bits like new babies, divorces (especially if the outsider ran off with someone else), deaths, marriages, will contestation, etc. make it to me.

  2. imawindycitygal Says:

    Hooo boy! Family and money, eh? I rarely talk about money with my family and don’t pay close attention to the stories I hear about other family members that involve money. Money is just way too highly charged of a subject in my family.

    My parents divorced and have each remarried. Dad and I stopped talking about money back when he got remarried; I was just entering college and had asked for some help paying for it. (Which only seemed fair to me because he took money out of my own college savings account that he has never paid back.) He wouldn’t give me any money, but offered to try to get me a job so I could work on my undergrad part time. No thank you. He has (adult) step kids that are underemployed and there have been indications that he and the wife help them out. I’m fine with that, but I don’t want to hear much about it.

    Mom married a guy that is very kind but comes from a poor, lower working class family. He runs his own business and his idea of securing financing is to get cash advances on the credit cards. I don’t even want to know how much they owe because I’m sure it would upset me too much.

    Sister works in a very good job (as in a six-figure income earning position). She is divorced, has two children at home (one in her early 20s and the other nearly finished with high school) and has a house. I’m pretty sure her mortgage is at a decent rate and she is not underwater because she bought long before the real estate bubble and has refinanced recently. However, in the past year she’s said some things that reveal her ignorance of other personal finance issues that have really shocked me. Such as:
    * She loves getting a very large (as in 10-15k) tax refund every year because she knows she’s not disciplined enough to save the money herself;
    * In the 14 years she has been working (at the same company where I work) she hasn’t participated in the 401(k) program at all. That means she hasn’t saved for her own retirement in any way, and has lost out on 14 years of company match to date.

    She said that maybe someday we should get together and talk out her finances. Wow. I suppose that’s a good sign, at least.

  3. nicoleandmaggie Says:

    Wow, indeed! Well, knowledge is power I guess. And maybe things aren’t so bleak; maybe she put the $10k tax refund each year into some sort of savings…

  4. eemusings Says:

    Oh, totally. Ex flatmate still owes me nearly a grand, but I’m never going to see it again.

    I greatly dislike when BF lends money to his family. It’s usually only ever about $20 at a time and not very often, but while one person is good about repaying, the other is not.

  5. bogart Says:

    Let’s see. This one’s from me: getting a roommate? Check their references. That one cost me about $800 in lost rent and was a major hassle, but I did learn what’s involved in eviction. And here are two from (different) members of my extended family: don’t co-sign a co-workers car loan (duh) and do make sure you know what’s involved in officially revoking a power of attorney; I forget the details on the latter in my state but think it may involve having the revocation served, or maybe it’s enough to send it certified mail (I’ll admit certified mail mystifies me — I get that I can document that I sent a letter and it was delivered and received, but how can I prove what it contained? But I digress.), but it is definitely not enough just to file a revocation with the register of deeds.

  6. Lindy Mint Says:

    I had a roommate who once asked me to co-sign on a loan so she could buy a dog from a pet store. I said yes. And then I said no after a stroke of fortunate clarity since she was just a summer roommate who I really didn’t know and I had an inkling she would flake out. She was mad at me, but in the end I was sooo glad I didn’t cosign that loan. She did turn out to be pretty flaky in the end.

    • nicoleandmaggie Says:

      good grief

      So remember our relative with the huge family and the inability to save any money? His mom is getting one of his sons a huge dog for Christmas (has, in fact, already purchased the $300 puppy). Looking up on Google, this breed of dog costs minimum $10/week in food alone. Said relative already can’t pay all his bills on time each month most months, and coming up with $15 over the course of a year is impossible for him.

  7. nicoleandmaggie Says:

    The only roommate I ever lent money to was the one I had known for 3 – 4 years at that point. And I always got paid back on time.

  8. First Gen American Says:

    It sucks when you’re divorced and you’re still paying off your fairytale wedding. I know 2 couples like that.

  9. Dollar Matters: Carnival of Personal Finance #288 Says:

    […] Grumpy rumblings of the untenured offers a warning in Financing a wedding dress: A cautionary tale from FIL. […]

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