My wife and I were married in a small wedding (around 40 people) last December, with a final budget of less than $4000. Almost everyone remarked that it was the most fun weddings they've ever been to. Neither my wife nor I wanted a huge extravagant wedding, and after the event, we were even happier with our choice to keep it small and simple.
To save money on a dress, buy a bride's maid dress and get it in white. That's what my wife did (actually, that's what my sister-in-law did; my wife borrowed her sister's dress) and it looked beautiful. Nobody even knew that it wasn't a horribly over-priced wedding dress. The biggest rip-off was when she took it to the drycleaners after; they wanted to charge her over $100 to have it cleaned (they only told her this after they'd cleaned it). She refused to pay that ridiculous sum and told them they could keep the dress for all she cared, since it only cost something like $125 to buy it new anyway. Eventually they let her have it for the same price they charge for cleaning a regular, non-wedding dress.
If you're not serving a meal and paying for drinks, you're going to save lots of money there. Food (and wine to go with dinner) was our single largest expense (it was something like $45 per person), and my father-in-law graciously picked up the bar tab (we had an open bar serving beer and wine after dinner).
I think we spent around $200 or so on flowers; bouquets for the bridal party, boutineers (sp?) for me and my best man. We decorated by spreading rose petals (which are super cheap) around the floor and over the tables...it looked great.
For music, we just made a playlist in advance and hooked my iPod up to some speakers. We were also lucky that my uncle is an excellent pianist and there was a piano at our venue, so he volunteered to play some live piano music as well.
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