Summer is wedding season: a time of joy and celebration, but also a time when people spend huge amounts of money in a way that makes them go insane with stress and worry. Fortunately, a few basic principles of economics can help you get not just a cheaper wedding but as more cost-effective one at all different price points.
1) Set a budget
This is the hardest piece of advice to follow, but also the most important. One reason weddings get expensive is that people end up paying high prices for the components of the wedding. But another reason is that there is simply no natural ceiling to what a wedding might be or how expensive it could become. No amount of bargain hunting could possibly change the fact that Kim Kardashian's Versailles wedding was expensive. To keep costs contained you need to decide — in advance — how much you are willing to spend and then commit to staying within that ceiling.
Because the point of the budget is to cap total expenditures, it's important to make this number a true maximum. Your budget shouldn't be a guess about how much you will probably spend — a number that you are as likely to exceed as to undershoot. It's a maximum amount that you absolutely cannot and will not go over.
2) Avoid costly signaling with a fun & romantic plan
Economist Diane Coyle observes that in many cases "having a fun day is not the point of spending the money" on a wedding. Instead an expensive wedding is about what's known as signaling: you're spending the money to make a point. Rolex watches aren't expensive because they are so much better at telling time than Timex watches. They're expensive, in part, because part of the point of owning one is to show off that you own an expensive watch. With a wedding, brides and grooms often increase spending as a way of demonstrating their commitment to each other, and to their relationship: they want to make each other happy so they don't want to say no to anything.
Demonstrations of commitment are great, but since the signal only means something if it's genuinely costly to the signaler, the tendency is for signaling motives to push couples into overspending relative to their financial resources. In other words, if you're not spending more than would be prudent you're not really making the point. That's a great dynamic for wedding vendors, but it's a poor use of your hard-earned money.
So once you have a budget, consider making a fun and romantic plan for what to do with any money you save by coming in under budget. Make it a bonus that lets you do something extravagant on your honeymoon that would otherwise be impossible. Treat yourselves to some fancy dinners out. Add it to a new car fund. Of course in an ideal world you might do something boring like use the money to bolster your retirement savings. But a boring alternative to wedding spending will leave you prey to the signaling trap. A great plan should ensure that whether you spend the cash on the wedding or not, you'll be spending on yourselves as a loving couple. That way you can consider the value propositions offered by various vendors in a cold and rational way without feeling like you're evaluating your relationship in a cold and rational way.
3) Don't buy a wedding dress
Caitlin Kenney did a brilliant investigation several years ago for NPR and found that there's about $2,500 worth of fabric in a super-high-end wedding dress that sells for $8,000. Markups are everywhere in life but wedding dresses are particularly egregious. As Kenney writes, "a lot of that extra cost comes down to the word 'wedding.'"
Because of all the signaling involved in weddings, dress-makers deploy a pricing tactic known as price discrimination. If you're selling a dress to a woman who's looking to buy a dress, you know you're probably looking at a price-sensitive shopper. Even if the woman has the funds and inclination to spend a lot on clothing, she'll prefer a great deal to a bad one. A woman looking to buy a wedding dress is likely much less price-sensitive. There's signaling involved. And limited time. And the feeling that this day is special.
The way out of this is simple — skip the wedding dress. Just buy a dress that you like at a price that seems reasonable. Even if you, personally, really are less price-sensitive when it comes to the dress you'll get married in, the designer and retailer don't know that. The dresses you're looking at aren't "wedding dresses" so they're priced to be competitive.
4) Don't buy a "wedding" anything
What goes for dresses goes for everything else. Anytime a product is segmented into "wedding" and "not a wedding" categories, price discrimination is almost certainly at work and almost certainly not in your favor. Cake is cheaper than wedding cake. Event planning is cheaper than wedding planning. Renting some space is cheaper than renting a wedding venue.
People sometimes misunderstand this advice and believe that avoiding the wedding price premium requires you to actually trick the vendor into not realizing that you're planning a wedding. But that isn't really how price discrimination works. Airlines typically charge less for round trip flights that extend over a weekend because they believe leisure travelers are more price-sensitive than business travelers. To take advantage of this fact you don't need to actually persuade anyone that you're not a business traveler, you just need to buy a ticket that extends the trip across a weekend.
Pricing strategy just isn't made at the individual customer level. Across the board, products that are intended to be sold as "wedding" products are targeted at customers who are believed to be ripe for the gouging whereas normal products are priced more competitively. To whatever extent you can avoid "wedding" products, you'll get a better deal.
5) Remember the mediocrity principle
The biologist PZ Myers nominated this as the scientific principle that would improve everyone's cognitive toolkit, and it's very useful for wedding economics. "The mediocrity principle simply states that you aren't special," he writes, "the universe does not revolve around you, this planet isn't privileged in any unique way, your country is not the perfect product of divine destiny, your existence isn't the product of directed, intentional fate, and that tuna sandwich you had for lunch was not plotting to give you indigestion."
In other words, while your wedding is a really big deal for you (and for your parents, and maybe a few very dear friends and family members), to most of your guests it is, sadly, just another wedding. Which isn't to say they don't love you and aren't thrilled for you and won't have a great time. They will! Just like you have at the various weddings you've attended. But for them it will be just like that and nothing you do is going to change that.
Read in the wrong spirit, that can be depressing. But in terms of the bottom line, it should be liberating. Vendors will try to prey on your sense of specialness to convince you that every little detail matters and relentlessly upsell you. Don't buy it. Barring a giant obvious fiasco (food poisoning, roof collapse), everyone's going to have fun regardless and no amount of sweating the small stuff is going to make the day as special for everyone else as it is for you. The cheaper dishes or centerpieces or more restricted booze selection or slightly less-tasty food or whatever isn't going to ruin anyone's good time and they probably won't even remember. And what makes it special for you, presumably, is that you're making a lifelong commitment to a person you love, not that the centerpieces are particularly ornate.
6) Repeat business is your friend
Even if your wedding is really really great, odds are you're not going to want to stage a second one that's just like it. This is a problem in economic terms. An idealized perfect market features perfect information between buyers and sellers so nobody gets ripped off. No real world market is like that, but we can get the same approximate effect through repeated interactions and branding. The knowledge that the customer might come back to the same store is a powerful incentive to provide good service.
Thus, while of course your wedding should be special you probably don't want to make it too special if you're looking for a good deal.
Ideally you want to work with people you'll plausibly buy stuff from again in the future. People whose business interest is in making you feel happy about the transaction so you come back again, rather than people whose business interest is in bleeding you dry in the short-term.
7) Consider an integrated vendor
If instead of a wedding you were just planning on hanging out with some friends, it's unlikely that you would be looking separately at locations, decorations, and catering. You'd head out to a restaurant or a bar where location, refreshment, decor, and even music are all sold together in a single bundle.
This is how things come together because it's a way of usefully exploiting the division of labor. The bundles are created by full-time professionals — owners and managers of bars and restaurants — who have nothing better to do all day than focus on optimizing the various price/quality tradeoffs available. They are much better at this than you are.
One reason people tend to deviate from this program for their wedding is for the sake of ultra-customization. You may have a favorite restaurant, but it's unlikely that it's your favorite down to every single detail. By putting things together à la carte, you get to make everything as special as possible. And fair enough! But remember the mediocrity principle — your extra effort isn't going to impress anybody. To your guests, it's just another wedding. And unless all the staff you're working with are people you're plausibly going to provide repeat business to, the odds of you personally coming away as a fully satisfied customer are low anyway.
So ideally, you want to use an integrated provider who knows they might receive business from you (and your guests) in the future.
8) Rent out a restaurant you like
The upshot of all of these principles, really, is that you should find a restaurant that you like and that does events and look into renting it out. Restaurants are great integrated service providers — a location, food, beverages, staff, and decor all in one nice package. And the great thing about restaurants is that people eat in them all the time.
Of course the restaurant wants to pluck your wallet for as much cash as possible. But they'd also like you to come back for dinner. And they'd like your friends to come back for dinner. Compared to most weddings, it's a much more natural, normal business arrangement in which the incentives are aligned correctly. Money is made by providing good service at a reasonable cost. And the great thing about restaurants is that they exist at all kinds of different price points. Set your budget. Find a place you like that fits it. Take the savings with you on honeymoon. Live happily ever after.