I am in desperate need of your help! My husband's sister got engaged in November and decided she wanted to get married this coming September. I was asked to be a bridesmaid in front of the entire family — so basically I was too embarrassed to say no. Because of my student loans, my husband and I have been in a very tricky financial situation. I wanted to decline because I didn't think I could afford it. The wedding is seven months away (but she has not booked anything yet — not even a venue), is there any way out of this???
The good news is that you probably don't really need a way out, you actually seem to be looking for a way to stay in (without the costs). So let's go about getting that for you.
First of all, you guys are family so there's no need to be shy. You need to come clean with your sister-in-law. Tell her you're so honored she wants you in her wedding but you are very concerned about the costs. She may already know that you and your husband have been cutting back, or maybe not. Either way, student loans are nothing to be ashamed of and it's admirable that you're getting yourself back on a healthy financial track. It's really hard to estimate costs when she hasn't made any decisions about the wedding yet so you need to see how flexible she is going to be when it comes to bridesmaid-y things like dresses, parties and mani/pedis.
Based on your note, it doesn't seem like her wedding is going to be a huge to-do (if she doesn't have a venue at seven months out, she seems pretty low maintenance) so I'm sure that she'll be more than willing to work with you. I've been to plenty of fantastic weddings where the bridesmaids each wore their own dress (that they already had) and the reception was in someone's backyard. There are all sorts of ways to celebrate love without celebrating into debt. If you do suspect that she is going to want the whole nine, you need to be very clear NOW that your participation is dependent on her flexibility about your spending, otherwise you have to bow out. Make sure to emphasize how much you want to celebrate with her, if only you could make it work out financially.