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How to Pay for Your Party: Personal Loan for Celebrations

| Money Rates Columnist.
min read

lavish-buffetHow Much Does it Cost to Throw a Party?

Our lives are filled with parties, from impromptu small gatherings after work to huge bashes at destination resorts. While some don't see the need for over-the-top events, others wouldn't miss them. After all, big-ticket celebrations are part of many of the cultures that make up the American landscape. But the big question is how to pay for party costs?

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Costly (or Not) Celebrations

Not everyone wants or can afford an event worthy of a mention in People magazine. This guide is designed to help average folks pull off memorable events without going broke.

  • Graduation Party
  • Family Reunion
  • Anniversary Party
  • Quinceanera
  • Bar/Bat Mitzvah
  • Best Way to Pay for Parties

By planning and financing intelligently, you can host a party to remember without committing yourself to ten years of payments.

Graduation Parties

After years of hard work and sacrifice, it's hardly surprising that students want a big party to mark their achievements. Whether it's a high school diploma, bachelor's or master's degree or a doctorate, you're looking at a key milestone in life that most want to celebrate.

And parents are generally as keen to participate in those celebrations as the graduate is. After all, they usually deserve at least a bit of the credit. Because many will have contributed cash, encouragement, a work ethic and a peaceful learning environment. And, without those, a career in fast food might well be beckoning their beloved offspring.

Perhaps it's just as well so many proud parents are keen to share and show off their child's success. Because they're likely to pay for the party.

Graduation Party Budget

And those events can be far from inexpensive. One survey, from GraduationParty.com, found the average cost coming in at $985. But, of course, that's just an average. And the survey suggested parents could expect to pay $6,483 if they opted for something special at the local country club.

But averages work both ways. And it's not hard to slash costs, providing you're prepared to put in some work yourself. If that appeals to you, search the web for ideas and inspiration that could make your backyard (or public park) party every bit as cherished a memory as one thrown in the swankiest of venues.

Look out for reputable websites -- such as HGTV's and Good Housekeeping's -- that are full of recipes and DIY craft ideas. How about graduation rings you can eat? Or a garland you make yourself featuring colorful versions of the tassels found on mortarboards?

Such ideas take time. But they can be fun. And they can save you huge amounts of money.

But there's an even better way to reduce the time and cost of a graduation party. And that's to share the burden with other parents whose kids are also graduating. That can be difficult if your kid's been away for four years and has lost touch with old friends. But it can make for a fantastic party where possible. Just make sure labor and costs are distributed fairly. And that, if you're the host, you don't end up having to clear up after by yourself.

Paying for a Graduation Party

But the do-it-yourself approach won't work for everyone. Some of us are disastrous cooks and bakers. And the closest some get to a craft is a craft beer. In that case, you've little choice but to buy in everything -- from party decorations to food. And GraduationParty.com's lowest sample budget for such an event was $525.

But $525 can be a scary sum, especially if you've just spent the last few years draining your savings to prop up your student child. Worse, the party's not the only expense you may be facing. And a minimum, you could have to rent a cap and gown. Then there are the optional extras that don't always feel all that optional. You know, things like graduation announcements, class rings, high school yearbooks, a senior portrait ... And some schools even charge graduation fees.

If all that's too much, the party's probably where you can make the most savings. Focus on the stuff that's important and ditch the frills. You can see that in action with the music you provide. A band's more costly than a deejay. And one of your child's pals who's a wannabe deejay is probably free -- as is your kid's smartphone playlist.

Still, no amount of smart buying is likely to get your costs below the low hundreds. And plenty of Americans find even that amount an insurmountable obstacle. So you may end up having to borrow, no matter how much you wish you didn't have to. That may be where graduation party loans come in. They let you spread the cost over several months or even longer -- however long you need (within reason) to keep each payment easily affordable. And they're simple to budget because you make equal payments.

Planning and Paying for a Family Reunion

You don't get to choose your family. So it's just a question of luck what type yours is. Some are never happier than when they're gathering together in a back yard, enjoying pizza takeout, store-bought desserts and wine out of a box. Others come with sneering in-laws and snobbish aunts who demand only the best of everything.

You have to calibrate your family reunion to meet your relations' expectations -- or live with the raised eyebrows and stares down noses. And that can be an issue if cost is a big factor. If you're unlucky, only an event at a swanky hotel or country club will do the trick. Book early for the best rates.

Obviously, hosting the event at your own home will eliminate venue costs and likely many others, too. And, just like with graduation parties, the effort you put in -- and the imagination you use -- when planning and executing your bash can make up for a smaller budget. Even the snobbiest snob can appreciate inventive and well-made party decorations, and delicious, homemade food. And, if your wine-connoisseur brother-in-law won't touch anything less than the finest vintage Bordeaux, add "Bring a Bottle" to your invitation. You can always encourage him to hide his away so it won't be "wasted" on lesser mortals.

Whoever hosts the party is likely to shoulder most of the clearing up chores. One way around this (or if you don't have a back yard) is to book space in your local recreational parks. Guests are more likely to help out at the end of the event. The booking cost is likely to be small. But watch out for mandatory insurance, which some park authorities impose. That can add significantly to your bill.

Family Reunion: Start Early and Plan

Start out with the vision "thing." Imagine the family reunion you'd ideally like to host. Then fix (really fix) a budget. You can then begin the process of paring your dream to match your reality.

The earlier you book, the better the rates you're likely to be offered by venues, caterers, florists and other suppliers. So start a year or 18 months before the event date. That should help get you to get your event firmly on your guests' calendars, too.

However, remember the drawbacks to this. You'll likely have to put down deposits and pay some costs upfront. And your chances of getting other family members to pay their contributions (if any) upfront are slight. So be prepared to carry that financial burden for a long time.

And recognize that early bookings come with another risk. If someone else in the family picks your date for a wedding or (heaven forbid) a funeral, you're stuck with expenses and no guests.

Control Family Reunion Costs

Search the web, and you can find various "average" costs for family reunions. One put them in the range of $51 and $99 per head. But how useful is that when you can easily deliver one for a small fraction or ten-times the amount?

How much you're in for is going to depend on your role (host or organizer) and the type of event. If you're simply organizing an annual family reunion, your costs could be much the same as everyone else's. Your job is mostly admin and collecting guests' contributions. Because those families that hold annual reunions typically share the costs across those attending.

Indeed, some have developed a tariff structure: maybe, $95 for adults, $75 for seniors and students, and $60 for kids. Obviously, if you know someone is facing real financial hardship, you might charge him or her zero and spread the cost among the others.

But not all families or reunions are like that. Maybe you want to bring your relations together to celebrate something that means a lot only to you. That could be your daughter's engagement, your son's graduation, your own wedding anniversary. That's when the financial burden is likely to fall wholly or mostly on you. And it can be a heavy one.

What Does an Anniversary Party Cost?

You don't need us to tell you there's no such thing as an average anniversary party. And that means there's no typical anniversary party budget.

Some couples prefer to celebrate alone, or with just a few of their closest family and friends. For others, nothing less than a large, lavish, no-expense-spared party at a swanky venue will do.

Bigger Numbers = Bigger Parties

Very few couples publicly celebrate lesser anniversaries -- certainly, once they're past the newlywed stage. For most, the first major celebration is the silver anniversary, which marks 25 years. After that, you're looking at pearl (30 years), ruby (40 years), sapphire (45 years), golden (50 years) and diamond (60 years). Often, the longer the time together, the bigger the bash.

Of course, there's no law against celebrating your 11th or 33rd anniversary. And many do so as couples or just at an intimate dinner with select family and friends. But guests may assume your marriage is coming out of a very rocky patch if you feel the need to party just because you were wed some random number of years earlier.

What's Your Vision?

As with other celebratory events, it's not a bad idea to start off with a vision of your ideal anniversary bash. You then need to set a budget you can afford. And, once you have costings, trim your dreams to meet reality. Of course, you may need to expand your dreams to use up your budget. But then you'd be either a bit weird or very, very rich.

So what makes up your vision? You should imagine:

  1. Your ideal venue
  2. The size of your guest list
  3. The source of your catering (you or outside caterers) and its lavishness
  4. Whether you'll have a cash bar or an open one
  5. The sorts of decorations and flowers you want

Of course, your imagination imposes no budget. But your finances almost certainly will. However, it's only when you get a feel for the costs you face that you can begin to scale back your dream.

Anniversary Party: Who Pays?

Most guests will assume that you (or maybe your kids) are going to fund the whole event -- perhaps excluding a cash bar. But, of course, there's nothing to stop you from asking them to contribute to the costs. However, it may be perceived as distinctly unusual and socially awkward. If you plan to do so (in effect, you're selling tickets), be sure to make that clear from the start. It's really not on to have people commit and then bill them.

Be aware that some might have to refuse your invitation on wholly financial grounds. Don't take that personally or pressurize them to attend. A 2019 study found 44% of Americans in work have jobs with median annual wages of $18,000. So some of your guests may not be able to travel to your venue and perhaps stay overnight in a hotel, let alone help pay for your party.

Also in 2019, The New York Times ran a story ("Go Broke or Go Home") about how invitees to weddings are increasingly having to turn down invitations on financial grounds. Sometimes, even bridesmaids are having to decline. So, if they're not turning up to actual weddings, you really shouldn't feel bad about them skipping your anniversary party.

When You're Paying

If you're going to bite the bullet and pay for party costs across the board, you have to be realistic about the likely total bill. If you're paying for a swish venue and high-quality catering for a big crowd, you're almost certain to be looking at five figures.

Host the event in your back yard with catering done by your bring-a-plate guests and budget booze, you could be down to the low thousands or even less. But even that option hardly constitutes pocket change.

Marking an important anniversary is understandably a major priority for many couples. But it's not one that should bring an uncomfortable financial burden. So plan with your pocketbook in mind. And borrow only what's necessary. So you can enjoy your event without buyer's remorse and nagging guilt.

Quinceañera

It crept up on many of us, but quinceañera has become a big event in the lives of many families. How big? Well, Americans spend about $400 million a year on these celebrations.

So what's it all about? Quinceañera has its roots in Central America and is as strong there as ever. It marks a reaffirmation of their Catholic faith by girls as they reach the age of 15. In the US, roughly 400,000 Hispanic girls reach that birthday each year. And some basic math reveals what that means: every year, about 800,000 parents have to work out how to come up with an average of $1,000.

Elements of a Quinceañera

The celebration starts at a special mass at the family's Roman Catholic Church. The 15-year-old "quince girl" receives a special blessing from the priest after she's rededicated herself to God. Usually carrying her prayer book, she reaffirms her spiritual devotion and vows to protect her virginity.

This is a true rite of passage, full of symbolism, marking the transition from girlhood to womanhood. Before a statue of the Madonna or in front of the altar, the honoree receives flowers and makes a gift of a porcelain doll to a younger girl. She no longer needs childish things.

Fittingly, the quince girl wears an ornate, full-length gown fit for a princess. Complete with sequins, lace and satin, this alone can cost hundreds or even thousands. And she is attended by 14 girls (damas), one for each previous year of her life, and 15 boys (chambelans), smartly dressed in tuxedos, one for each girl.

La Fiesta

From the church, the principals and guests move on to a reception. And, for quince girls with richer parents, that can be exceptionally lavish and hugely expensive.

Expect this to focus on heritage and tradition. After all, the Quinceañera shares its purpose with other rites of passage, including those that see girls in the US and Europe launch into society at coming-out events and debutante balls.

These two traditions from different continents share a common characteristic: they establish the girl's standing in society. And, at least in old-fashioned circles, line them up for desirable marriages. No wonder so many parents invest heavily in them.

What Does a Quinceañera Cost?

If, for America, you divide the $400 million annual spend on quinceañera by the 400,000 quince girls each year, you reach an average cost of $1,000. But that average can be misleading. Because many middle-class families expect to pay anything between $5,000 and $20,000 on the day.

How can it be that much? Well, mipadrino.com reveals that a fiesta shares many of the costs of a wedding reception:

  • Venue hire
  • Caterers
  • Wine, bar and soft drinks
  • Gown purchase
  • Tuxedo hire or purchase
  • Flowers
  • Band or deejay and other entertainment
  • Gifts
  • Photographer and videographer fees and costs
  • Limousine hire plus other transport

As with most events, such costs can be made much lower if they're shared across multiple families. So many churches organize masses that bless more than one quince girl. And that provides opportunities for sharing fiesta costs, too.

Still, some families will always want to cement their social standing with an individual fiesta just for their child. And, for them, budgets can be sky-high.

Bar Mitzvah / Bat Mitzvah

Just like quinceañera, bar mitzvahs and bat mitzvahs are at heart religious ceremonies that mark someone passing from childhood to adulthood. But, of course, there are differences, not least that the religions are different: bar mitzvahs and bat mitzvahs are part of Judaism and therefore celebrated in Jewish communities, though they're often attended by non-Jewish friends.

Another difference is that those being honored tend to be younger: 13 years old for a boy (bar, meaning son) and 12 for a girl (bat, meaning daughter). However, in recent decades, there's been an increasing trend among Jewish adults who missed out on the ceremonies when they were young to use grown-up versions to affirm their cultural identity.

During the religious part of the celebration, a child typically receives an aliyah (recites a blessing) and chants the haftarah (prophetic reading). Many may also chant the weekly Torah portion or lead the prayer services. Of course, not all Jewish people belong to synagogues. And some are creating their own personal versions as rites of passage to adulthood. But one thing almost all bar mitzvahs and bat mitzvahs have in common is that they're followed by a seriously good party.

What Does a Bar Mitzvah or Bat Mitzvah Cost?

If you're a Jewish parent, be sure you're sitting down when you read this bit. Because one website reckons you could spend a minimum of $16,869 on a 30-person party. And north of $170,000 on one for 300+ guests.

Of course, fairly few families actually shell out those sorts of sums. But Jewish website amenvamen.com suggests, " ... it's not uncommon for parents these days to pay $50,000 (or even more) on their kid's Bar/Bat Mitzvah celebration." It goes on to suggest that some see these events as an opportunity to promote their prestige within their community. And it continues:

We live in an Instagram-fueled world now -- where a Bar/Bat Mitzvah has transformed from a traditional Jewish ceremony into a "let's see who throws the most lavish Bar/Bat Mitzvah party" competition. Keeping up with the Joneses (or in this case, the Cohens) comes at a cost.

Of course, providing you can afford it, there's absolutely nothing wrong with using these events as status symbols. Everyone yearns for those. But it can be a mistake to enter a race you can't win, especially if the entry fee is ruinously expensive.

How to Control Bar Mitzvah / Bat Mitzvah Costs

The easiest way to stay solvent is not to even think about that race. Rent space in your synagogue instead of paying for a plush venue. Choose the menu you can afford rather than the one that will impress. Make the cake yourself or buy it in from a local bakery instead of commissioning a custom-made one that reflects your theme. Work up a smartphone playlist with your child instead of hiring a band or deejay.

But, above all, fix your budget and then control it. Search online and you can find free downloadable worksheets especially tailored for bar and bat mitzvah budgeting. If you maintain one of those properly, you can track the cost commitments you're making and keep them manageable.

Should You EVER Borrow for a Party?

Some financial gurus reckon virtually all borrowing is bad. Maybe mortgages and student loans are acceptable because they're investments in your future. But a party? Seriously?

Of course, nobody wants to borrow for anything. If you have savings, use them, as long as you keep some back for emergencies.

But suppose you don't have the necessary financial resources. And suppose your party is really, really important to you. On what grounds does anyone else get to judge your priorities? After all, you're a grown-up and understand the consequences of what you're doing. Providing you can comfortably afford the payments on a personal loan or other sorts of borrowing, the choice must be yours alone.

Having said that, you owe it to yourself to be smart over the type of loan you take. You want to minimize the interest and other costs. In other words, you want to find the lowest "total cost of borrowing" available to you.

Funding the Fun

There are many ways to pay for a party. But financial experts are united in their belief that if you must borrow for short-term reasons, don't do it with long-term financing. So you can tap an existing home equity line to pay for a party, but don't take 15 years to pay off that withdrawal. Instead, calculate what it would take to clear that part of your balance in 12 months. Add this to your regular monthly payment to minimize the effect on your financial health.

For most people, short-term borrowing means a personal loan or a credit card. That's where we'll focus most of our advice.

Credit Cards: Smart for Spending, Dumb for Financing

Credit cards are a great way to pay for a party. But they're a lousy way to borrow for one.

By using your plastic to pay, you stand to receive miles, points or cashback rewards. And you get superior consumer protections. It's easier to get your money back from a credit card company than anyone else if your venue or caterer goes bust before your event.

But cards come with sky-high interest rates. And they pose a continuing threat to your credit score. That's down to something called your "credit utilization ratio." If you let your balance rise to more than 30% of your credit limit, your score's going to take a hit. And, after a while, that could get serious.

So, by all means, use your cards to make purchases. But zero your balances every month. Use your savings to do that. Or the proceeds of a personal loan.

Personal Loans for Prodigious Parties

You may not need a personal loan if you're hosting a backyard party that you're catering yourself. One of those might come in at a few hundred bucks. And most of us have credit cards that can handle that sort of strain without hitting credit utilization problems. Of course, you'll still want to pay down your balances within a few months so that you minimize the impact of those high interest rates.

But, if your expenses are creeping up toward $1,000 or more, a personal loan may be your best bet. Because their interest rates tend to be a fraction of those on plastic. You won't know precisely how much lower until you receive a loan quote. But you might well find your rate halved or better.

Yes, homeowners can get even lower rates with home equity loans or mortgage refinances. But those usually come with high closing costs. And, anyway, do you really want to be still paying for your one day of fun in 10, 20 or 30 years' time?

So what's so good about personal loans? Here are some advantages:

  1. Low rates - as already discussed
  2. Low or zero setup costs
  3. Affordable - Within limits, you choose how long the loan lasts and how thinly you spread the payments. So you can make your personal loan comfortably fit within your household budget
  4. Predictable - Opt for a fixed-rate loan, and you'll know when you sign precisely how much you have to pay each month and when you're going to finish paying it down. And, unless the economy changes, variable rate loans may offer even lower payments down the line
  5. Scalable - You can borrow big or small amounts
  6. Quick and easy - You can apply for a personal loan online in minutes. And, you might have the money in your account within 24 hours. It rarely takes a week or more

Convinced? Click the link below to be matched with personal loan lenders and to receive quotes. Oh, and one more thing: Enjoy your big event!

Compare personal loans for parties now

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