When is it proper to enjoy your hard earned, or maybe not so hard earned wealth, and when should a person hold back off on ostentatious displays? I am not referring to the obvious value in living modestly. Instead, I am referring to a legitimate celebration such as wedding. On the one hand, why not make a giant seudas mitzvah and invite as many family and friends to share this blessed moment? On the other hand, perhaps this will overshadow the enjoyment and pride of those who have equal love for their children but cannot afford such a grand affair?
Our Gemara here on amud aleph mentions the idea that according to Rav Yosef, no one was allowed to bring their own wood to burn leftover sacrificial meats, so as not to embarrass the poor who could not afford to bring their own wood.
We find this idea in other areas of Halakha as well. Such as during the “Shidduch Festival of Yom Kippur and 15th of Av” as described in Taanis (26b), all the maidens would wear borrowed clothes so as not to embarrass those who could not afford. There also were certain mourning customs that developed out of a need to protect those who were buried in poverty (see Rambam, Laws of Mourning 4:1).
While this seems to be a sensitivity with many applications, there is one Gemara where the opposite is maintained. In Kesubos (54b), we are told that one can increase the gift in the marriage contract to any amount and the Sages were not concerned that it would embarrass the brides who were less wealthy.
I have not found any commentaries who suggested an answer to this apparent contradiction. I would like to suggest that in the other situations, either there was embarrassment caused with no practical gain, or the embarrassment produced a concrete loss. Meaning, in the case of the burial rites, the mourners in the poor family would suffer humiliation and ultimately what concrete benefit accrues to a dead person that he requires a first class send-off? In regard to the Shidduch Festival, why should the poor girls be outclassed by the richer ones, just because they cannot afford an appropriate “dress for the prom”? In regard to the Kesuba though, it offers a basic form of “social security” and financial support against divorce or widowhood. This is too much of a benefit for the rabbis to artificially hold back from the bride, even if perhaps the less wealthy brides will feel a bit outclassed.
Now, the question is how do we apply this principle to weddings celebrations? Perhaps it is similar to the money in the marriage contract in that it offers a degree of financial security in that a larger, more robust wedding will encourage commensurate wedding gifts. On the other hand, it is not as a concrete benefit as a marriage contract and the embarrassment to the less wealthy brides may be stronger.
My advice to you, is spend a nice amount on the wedding if G-d blessed you with the ability to afford it and it makes sense. Don’t go into debt but if you have the money, it is better to spend money on mitzvos and happy celebrations if you can. But like everything in life, a little moderation is a good idea, so don’t go overboard.
Translations Courtesy of Sefaria, except when, sometimes, I disagree with the translation 
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