Response: According to etiquette, the grooms parents pay only for the rehearsal dinner. All other activities, including the engagement party, are optional. Your fiancee may have gotten the idea that it is expected for them to pay for the DJ because it was done at a friends wedding. From an etiquette perspective, you and your bride are responsible for all of the costs of the wedding. If parents volunteer to help, that is great, but they dont have to.
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