RA: What about using home equity?
Henderson: Sure. Another good way to come up with
some money is dipping into a home equity. If they don’t
already have the money available in a savings account this
could be a good option. But clients have to be careful
because with rising interest rates, that option could
potentially be less appealing here soon. It’s mainly about
planning early and making sure those sources are available.
RA: Say someone did take a loan out from their 401(k)
account, what would be the consequences to that?
Henderson: If they have a 401(k), most have a loan
provision to borrow up to a certain percentage of the ac-
count balance or $50,000. They have to pay that loan back.
If they don’t pay it back and leave work for whatever reason or are under the age of 59 and a half, it could become
potentially taxable. There could also be less growth because
the money is out of the account for a certain period of
time, which ultimately results in less money for your
RA: With weddings, why do you think it’s easier to wreck a
Henderson: Emotion can play a larger role in a
wedding than it does, for example, in a college education.
That’s more of a financial decision where you say “well
geez, we’re going to contribute a little bit to your college
and you’re going to have to take out loans for the rest.”
When it comes to a wedding that seems to be more of an
emotional decision-making process from the conversations
I’ve had with numerous people. We don’t always make
good decisions, whatever it is, when emotions are involved.
RA: What are some of the biggest financial pitfalls people run
into if they aren’t pre-planning?
Henderson: The sandwich generation is a common
pitfall, specifically when taking in adult children. We had
a friend whose child came home and didn’t want to work.
Luckily, she is working now but that could have become
a huge problem. Adult children can financially drain any
Another pitfall would be in leaving your money out of
the market. If you don’t start saving until you’re 40, you’ve
given up 15 to 20 years when that money is not growing
Once that pattern of not saving is in place, people begin
making emotional decisions with their money: They pull
their investments out of the markets at the first hint of an
economic downturn. That’s an emotional decision that can
cost you a happy retirement. RA
Wedding Costs Across the U.S.
Average cost by region: