The average American wedding costs almost $28,000. Taking into consideration that the median household makes less than that, it’s alarming just how much one day can cost you.
Now, I won’t lie - I’m having a large wedding for 250 guests and it will cost more than the annual salary at my first job. Since I started wedding planning, several of my friends have asked me how we’re managing to pay for such an expensive event. My answer is the Korean kye.
When I first started working full-time, my parents knew that I wouldn’t be able to save much money on my own - I need discipline! So when a friend of theirs started a new kye they asked me to join.
The Korean kye, which means contract or bond, is a credit rotating system built on trust and honesty. It dates back hundreds of years when it was first used to pay official grain loans and military taxes. Since then, the kye has been transformed to finance small businesses, weddings, and funerals. These days, the kye is not only a financial function but a social one as well, where members meet every month to socialize, choose the winner, and celebrate. Kye’s can give a lending hand to new immigrants with no or little credit history (in fact, there are several papers out there which discuss how kye’s were one of the driving factors in helping the first Korean immigrants start their lives in the states). Plus, the monthly meetings are great places to socialize, network, and have good food and drinks.
A typical kye has fifteen members who contribute $500 every month. The winner of the jackpot (in this case, $500 x 15 = $7,500) may be determined by lottery or a group vote. The kye will continue until every member has won once, at which time the group can choose to disband or start a new kye.
So what happens if someone wins the first one and runs off with the money? This very rarely happens, for two reasons: 1.) you only join kye’s with people who you trust, and 2.) if you do, you will be a social outcast for the rest of your life. Koreans talk and gossip, and we all have families all over the world. Or we know someone who knows someone - unless you run away to a remote place with no contact with your previous life, you will get caught and there will be consequences.
I’ve heard of million-dollar kye’s in LA where people try to run off with the money and get caught. I’ve also heard of $50 kye’s in Korea among high school girls who pool the money for plastic surgery.
Now I know what you’re all thinking: how’s this different from depositing money into a savings account? Well, depending on how the kye is set up, you can actually earn interest if you decide to be one of the latter winners. For example, the kye that I’ve joined has a 10% interest rate. After you win, you must start putting in an extra 10% in addition to your monthly payments. So, in a sense, the first person to win is actually taking out a loan at 10% rate without any credit checks or leaving any blemishes on their credit history. The last person who wins makes 10% on their investment. What about those in the middle, who will come out about even? Even if you don’t profit at the end, you still join to help out your friends who may need quick cash to start a business, buy a car, etc.
I will be winning my kye towards the end of the cycle, which means that I will have made some money - enough to pay for my wedding and some change left over to start our new life together.
How are you paying for your wedding?
i totally want to get in on one, and i’ve tossed the idea around with a couple of my friends.
most of the people i know participate in a $1000 a month kye - a friend put down a down payment on her condo when it was her turn to take the pot ($20,000!).
whoa! i’ve never heard of this before! so everyone basically just puts in money in a pot for each other and takes turns using it? that’s really nice and a sign of strong bonds of friendship!
I never heard of this before. So how do you know you will win? Does the person with the most need/urgency get priority?
Wow, my Grandmother used to do that, I didn’t know young people do it too! I remember hearing stories of people running off with the huge sums of money. I would think those people maybe got in with not trustworthy people in order to earn a higher interest?
We paid for our wedding ourselves with savings.
Haha I’m such a bad saver all on my own that I joined another one last year for our condo! So one is for our wedding and another for the down payment on our new condo. It was tough at first, seeing all that money go, but I’m so happy to say that I can have my dream wedding without being a burden to my parents.
After seeing how it works, now Mr Peony talks about starting one with his friends….
so the real benefit of this is if someone needs a big wad of cash for a downpayment, wedding, etc and they “win” either first or somewhat early in the process?
i’m curious to know where the money is kept and who has access to it.
thanks for sharing!
interesting concept! never heard of it. what happens if two people want/need the money at the same time (ie. weddings in the same month)? who gets it?
so do you have to be an immigrant to join one? I don’t really get it.
I have heard of this from a Korean friend who saved for her wedding this way. I wish my family did this though… not sure if I trust some of them with my money.
As for how I did it- I started saving money about 7 months before we were engaged, and continued saving there after (it’s all about INGdirect). Our wedding budget is 12k with our honeymoon being about 6k… not the 28k average.
good question, amy (#7)! who gets to be the banker w/ access to the $$$?
Hi Amy - every kye is different, as all the rules are set by its members at the beginning. The two that I’m in have similar rules, which is that if more than one person wants to win in a particular month, all the members vote to decide who is in need of that money more. Every month, the members (in this case, my mom takes my share of the money for me) get together at a restaurant or a member’s house to celebrate and that’s where the money is exchanged. Oh, and the winner for that month usually pays for everyone’s dinner.
I went in on one with shady people and the person just before it was my turn took off with the money! So I was left with nothing. It was only about $800.00 ( thankfully it was a small version) But I missed that money. 
I learned my lesson but it sounds great if you are in it with the right people.
We have been saving for a long time to pay for it ourselves. Our culture isn’t into the whole “sponsor” gifts and my mom has just handed us a nice amount that is letting us breathe a little easier but all in all, it’s mainly just us.
i’ve never heard of this. my mom’s been holding out! i’ll have to ask her. haha. other than that, i’ve been saving for a little over a year now with ing direct. i’d like to have the bulk of the money with both our parents chipping in what they can.
how long do they usually last? each pot i mean. do you put in for a year? or less or more? or does it always depend?
Noel - You don’t have to be an immigrant to join one, nor do you have to be Korean! You just need a group of friends whom you trust.
What a neat idea!!
My fiance and I are putting in about $20k, and my parents are putting in another $20k. His parents offered us $5k, plus bought all our wedding china. I am lucky that I won’t have to go into credit card debt like I see happening to some close friends.
maybe i am having one of my ditzy moments, or maybe I am just plain out confused. how can you “win” and “run off with the money” at the same time???? If you win dont you just keep the money?
i know west indians do the same thing (must be something about immigrants). they call it a sou-sou. it’s usually done with people in your family, people you know personally, and people who are likely to be in your life for a very long time to ensure that the money will still be there for everyone’s turn
normally in a chinese wedding, the guy pays for everything. thats what my husband did. the kye sounds interesting though.
Mrs. Bird of Paradise - it all depends on your group. I know my parents have been in $500/month kye’s that lasted 1 year, and they have also been in $5,000/month ones that lasted 3 years!
Once you get a group together who is interested, everyone decides the monthly contribution. Usually one person wins every month until everyone has won once, and the kye ends. But you can also have a set number of slots, so that one person may have 3 slots (and contribute 3 times the monthly contribution) and end up winning 3 times!
I love the concept!
FILs = 55%
Bride = 45%
That’s the split!
Hi Polly - the dishonest people who run off with the money are the ones who stop paying once they win the pot. So even after you win, you have to keep paying every month (unless you’re the last person to win).
we’re paying for everything ourselves. my mom has gifted us to go toward our honeymoon-mediterranean cruise. but everything else has been us. we’ve been saving in http://www.emigrantdirect.com (similar to ingdirect.com but has .5% higher interest)
http://finance.yahoo.com/expert/article/moneyhappy/39681
I recently read this article about how the $28,000 average figure comes from Conde Nast, publisher of 3 wedding magazines and a website…
This is how my situation breaks down. We’re paying for most of the wedding ourselves.
Bride’s parents = 10%
Groom’s parents = 20%
Bride & Groom = 70%
My parents do something exactly like it but we’re from Central America. It’s the exact same concept. We do a lottery for the winner though.
I’m stashing away $1k a month 
you can also do multiple buy ins. so like, lets say the kye was for 30 people to put in 1,000 per month for 36 months, if i wanted to join this kye, i can theoretically buy 2 or 3 or however many i can afford and “win” the money multiple times. My parents are in the middle of a kye and they have three buy ins. they got one to be paid out closer to the beginning (3rd or 4th) another in the middle of the kye term and one more towards the end. the buy in for the end payout does give you the most money, but if you are strapped for cash the beginning buy ins are a lifesaver.
way back in the day, when my parents didn’t have money to start their business, they did a contractual kye for 4 years and managed to get paid first. they used that money to start the business and paid it back for the next four years.
“…they have also been in $5,000/month ones that lasted 3 years!”
if you have 5k/month…then why do you need to be in the kye?
we’re paying for the whole wedding ourselves and we just put money aside into a bank account…especially with interest rates at 5%…it’s more beneficial to put money in the bank
I heard about this from my Korean friend. A very smart way to save money.
My husband and I just got married. We both paid for the entire wedding. We used up our savings for the wedding; therefore we have no extra money for the honeymoon.
a kye makes saving a defined commitment both financially and socially. for people like me who are horrible at saving, it’s quite effective.
My dad set aside a ‘wedding fund’ for me before he passed away. We’re going to use about half of that (so my mom can save the other half as a wedding fund for my much younger sister) and contribute some of our own money as well as money from my FIL’s. We both have automatic withdrawals set up from our checking accounts each month that go into investment accounts - that’s my way of forcing myself to save. I can certainly see the benefits of a kye though - especially the social connections/support.
Interesting. It’s crazy that something like this is out there, and I’ve never heard of it. The only way I know how to save is with high interest savings accounts/CDs/bonds/etc. I think I like my way better, but that’s cause I’m used to it. Thanks for sharing.
And to answer your questions, my parents are paying for most of the wedding. We have the money to pay for it, if something were to come up, but it would seriously depleat our savings. My parents are in the favorable financial position, where paying for the wedding won’t be a burden.
I see what you mean now. Thanks! I just kept trying to figure out how keeping the money you won was dishonest!! 
its been one of those days!
I’ve seen something similar to this on CNN… a kye type arrangement is popular in certain african tribes, where member put in a pre-determined amount and members, in rotating terms, take home the pool… they likened to “winning the lottery for that month” - all is well until one member, a church elder, ran off with the money
if you are “winning” the kye toward the end of the cycle, arent you better off putting money aside in a federal insured CD?
Kyes are invented before there were banks. I am shocked that people still partake in it in modern times.
Interesting idea… Working in finance, I prefer to manage money myself, but I can see how the social aspect might help some peolpe.
I paid for our wedding entirely on my own. I scraped together $25k+ in a little over a year by setting up a portion of each paycheck to be automatically deposited into a savings acct. It’s like you never even see that part of your paycheck. Genius.
Interesting idea - especially if it translates into learning money management skills to save for future big purchases.
As it’s worked out, we’re paying 85% of our wedding weekend costs, and our families are contributing about 15%. We’ve saved every penny for this wedding - there will be absolutely no wedding debt (it’s been our mantra since we started planning
I’m with the doubters; I would never do this. We saved our own money over time (one plus to having a long engagement), and my family contributed a modest amount plus handled the flowers and cake.
I have heard of this type of pool before but with a Hispanic family instead and the money going towards a house. Incidentally, the fellow who belonged to the family got swindled by his own Mother when his turn came up…ouch. Also, some Nigerians do this too but for a home as well (my Father and his friends used to do this).
My SO and I are paying for our nuptials all on our own. My Mother offered but we figured that (1) taking her money would give her power to make decisions and (2) being adults we wanted to show that we could do this all on our own minus the debt. We can’t wait see how many points we rack-up on our AMEX card.
i would also never do this. it happens too often that people run away with the money, that friendships get broken b/c of shadiness over the money and details, and quite honestly - don’t mix money with friends & family if you don’t have to.
in theory, it made sense for people that were in the baby boomer/immigrant generation that came to the states. they had a difficult time opening up normal, legal financial accounts, and stuck to what was done in the old country. it worked for them.
not knocking people that do it now - i do know ppl that do, but i just don’t think that we need to do it with all the financial instruments out there at our disposal.
I think this is a really interesting concept - thanks for blogging about it! I would do it with those I trust, but had never heard of it before!
i personally know many people who have participated, and have never known anyone to be swindled.
That is really interesting. I’ve never heard of it before. My parents are paying for about half of my $10,000 wedding, while my fiance and I are paying for the other half. His parents are paying for the rehearsal dinner only. I do not make much money despite my four-year degree - so in addition to saving all I can from my regular paychecks, my federal, state, and renters rebate checks, along with a $1750 loan (I would have had this money on my own when I quit my job but I had to wait to quit it, so I took out the loan and will pay it off in full when I quit the job this October). In order to go on our honeymoon, my fiance had to take out $1500 in additional school loans to pay for the airfare. We were given lodging at a timeshare in Hawaii as a wedding gift, so we had to figure out a way to go despite the expensive airfare. Basically, we’re just getting money wherever we can.
I would agree with Linda (#43) and the other doubters. There’s so many other options with more security that can actually help your credit.
Guess if you don’t mind mixing friends/family and money and you trust all involved it is cool.
I wouldn’t want the whole community knowing what I paid for my wedding and hearing how they contributed.
this post has been so interesting!
i think it might be important to note that a big aspect of why this works is cultural. if someone ran off with the money, s/he would not only bring shame upon her/himself, but also upon his/her entire family. because maintaining/saving face is such an important part of asian society/culture, i think it serves as a huge deterrant to anyone who might consider swindling others. the shame one brings upon oneself would be bad, but to bring shame upon one’s entire family is often unforgivable.
This is exactly how we’re starting to pay for our wedding. Our “kye” is $3000/a month, but you can split it into thirds or fourths. my FI and i are doing one that is $500 a month each and when it’s our turn…we get 10K each! this is a bigger responsibility than trying to stick 500 a month into a savings account that i can dip into whenever i want. we’re more responsible and it’s great to know we can get this lump sum of money a year into the kye than to try to wait the whole 20 months to have it saved up. i think it’s a great concept! i plan to start another one when this one ends for our new house! wahoo!!
FYI…the kye that i’ve been a part of has been going on as long as i remember. I trust them more than soem of my local banks that can’t get the account numbers right!
great post Miss Peony!!
What. The. Hell. at that last comment.
crazy, my parents have never mentioned anything like this to me before! But my parents raised me with selective korean influences, so it may never have come up.
that being said, my parents are offering some, and I’m paying for the rest. Mr. GB put up the down payment on our home, so I’m paying for the wedding.
I can understand the doubts that anyone would have about this system because Mr Peony had them himself when I first told him about it. I guess it doesn’t seem strange to me at all because I grew up with it and it’s worked so well with my family. My parents have had several businesses over the years, and they have paid for all the upstart costs with kye money. They paid for the down payment on their house with kye money, as well as a condo they rent out. They even paid for the plane tickets for our move to the US with kye money (they were the last to win that cycle)!
Even if they don’t NEED the money, they participate to help their friends out who may need it and as a social tool.
For me, sometimes you need the cash sooner rather than later and this is a good alternative to taking out a loan or going into credit card debt.
In addition, everyone who is a member of my kye’s knows me as a member and consider me a responsible and loyal person to stick to something for so long and commit to it until the end. I have gotten many freelance assignments from them, as well as hook-ups for my wedding! (ie, one of the ladies owns a bridal accessories store and has offered to make me a custom veil for free)
hah, i called my mom after reading this - I had to ask! She says she’s done it before, as has my grandmother, and that her friend is doing it right now. Crazy!
Great post, Miss Peony. I’ve heard of this before with numerous immigrant groups and always thought it was interesting. I had no idea you scored so much moula though!
My FI and I are paying half and his parents the other. They insist on hosting the rehearsal dinner as well.
My parents paid for two relatively lavish Main Line weddings years ago for my sister (still happily married) and me. Since my father’s passing five years back, my mother’s lifestyle has drastically changed and I wouldn’t accept the money from her now. My FI and I were prepared to pay 100% but his parents insist on helping (he’s an only child). We are blessed with their generosity.
Wow, really interesting!! I can see how this can be a really effective saving tool — If I were in one, I would probably try to be the last one to win always since that would give me a 10% ROI vs my 5% INGdirect account.
The downside to this system, it seems, would be that it would only work in a really tight social/cultural circles. Unfortunately, I’ve been burned a few times mixing friends & family with money — maybe I just need to make new friends……or new family?
Oh, and no one mentioned the best part —> No tax on “interest” earned!!!
I’ve totally heard about this. In Haiti, they do the same thing. It’s called a meh. That’s how my older sister used to save money. As a matter of fact, that’s how a lot of people save money for large ticket items. Not a bad way to save!
I saw the West Indian “sou sou” concept. On Judge Judy. Seriously, it was a case of someone who swindled two women out of their money.
If you can do it with people you really trust and who have come through in the past, then more power to ya! If I had people I could trust in that way, it would be a good concept for me since I’m awful at saving.
As for the rest of your question, we paid for about 80-85% of the wedding and Mr. P’s parents loaned us money for the rest (we don’t want to take their money as they’re older, so we’re paying them back).
I’ve never heard of the kye before either and I’m 100% Korean! I wonder why my mom never told me, hmm. Very cool - i will call her today and ask about it! But I can’t participate in a kye because I can’t pay $500 a month - I basically live paycheck to paycheck even with two jobs.
Wow, very interesting. Thanks for sharing that!
We’re paying for the wedding ourselves. How? I had some funds saved from some RE investing and the rest we’re just saving as we go. My FI’s boss has been great and is giving him his yearly bonus as he earns it rather than waiting until the end of the year. So, every few months he gets $3-5,000. That’s helped a ton!
Turns out this wedding is costing us a fortune (well above the national average) and I think I’ve been pretty cautious with expenses. I’m not sure how some of you NY Bees had such modest budgets, even accounting for all the DIY!
My family is very active with doing “kye” In fact, one of my aunts arranges it within her friends and my family. About 15 years ago, their pool was 30-40 people strong and one of their “friends” ran off with about $80,000. (Their pools are quite big as each monthly is about $2000). Anyways, she ran off to Hawaii with it. Fast forward about 7 years. My cousin meets a guy and gets engaged. Guess who his mother is? Yep! Its the thief in the flesh! When she finds out, she does anything and everything in her power to not show her face. For instance, my cousin’s wedding was in Hawaii (MIL’s wishes), and she still resides in Hawaii. My family is over it but if it were up to me, I’d confront her! Let’s just say, you can’t hide when you are Korean because no matter where you go, you’ll end up as someone’s in-law, friend, or family member!
I’m filipino and we do the same thing…This has helped us with saving even before getting engaged!! Love this idea!
Mrs. Peony, New York
Age and Occupation: 27, Marketing Coordinator
Fiance's Age and Occupation: 30, QA Engineer
Engagement Date: June 28, 2007
Wedding Date: April 18, 2008
Venue: The Fountainhead
Blogging Since: August 7, 2007
About Me: Both Mr. Peony and I are huge computer nerds, and our conversations usually consist of the latest gadgets, programming languages, and video games. At the same time, I can also be very girly with an obsession with handbags, makeup, and high heels. And art! I've studied studio art extensively, almost majored in art history, and freelance as a web and graphics designer. Mr. Peony and I are having a ball of a time planning a wedding for 250(!) guests, doing our best to infuse our personalities (geeky chic) with the wishes of our very traditional Asian parents.
whao–I have never heard of a Kye before! That is pretty cool!