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Money and marriage: Are they compatible or incompatible? Is marriage a ticket to wealth building or wealth destruction? A 2005 Ohio State University study suggests it improves your net worth. But there’s one major caveat that you don’t want to miss. Because it’s a real deal-breaker. Some people have named it the biggest financial mistake of their lives.

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Discover why marriage is not just good romance, but it’s also a smart money move.

Money and marriage: Are they incompatible, as some people think? Or a match made in heaven? Many people believe that marriage might make them healthier – but not necessarily wealthier. Some go so far as to say that getting married is a financially stupid thing to do. People often claim that married folks pay more in taxes than their single counterparts. But that’s not universally true.

In fact, marriage offers many financial advantages. So money and marriage may be more compatible than you think. A 2005 study at Ohio State University (OSU) found that once married, people saw a sharp increase in their wealth. After 10 years being married, couples reported an average net worth of $43,000. Those who stayed single didn’t fare so well. Their net worth in those 10 years was just $11,000.

There’s one big caveat, which we’ll get to, in a moment. First, let’s discover the financial benefits of being married.

7 Financial “Windfalls” of Being Married

1. Money and Marriage: Health insurance is often cheaper.

Adding a spouse to a policy often costs less than having two separate policies. Insurance premiums, co-insurance, and other costs can vary wildly from employer to employer. So you’ll want to figure out the best combination of two or more health insurance policies and scrape in the savings. You can also potentially get additional coverages via the second policy.

2. Money and Marriage: Better loans go to married folks.

If both partners work, the bank considers two incomes when making loans or mortgage decisions. That gives you access to larger loans, makes it easier to qualify, and often at better interest rates. This is especially true if you have excellent credit, because the best rates go to those that the lender considers the best credit risk.

3. Money and Marriage: Improved credit score (maybe).

The partner with the lower credit score will see an initial boost in their borrowing power. Naturally, the opposite is true for the partner with the better credit score as you enter marriage. That score may take a temporary hit. But overall, you can do better from a credit standpoint, given the increased earning power and credit use provided in marriage. Of course, it’d be wise to marry someone with a similar credit score to yours, because their credit score is a reflection on their use and understanding of money and debt. Think twice about marrying into someone else’s debt and uncontrolled spending. 

4. Money and Marriage: Auto insurance costs will (probably) go down.

Marriage is generally considered a slam-dunk for lowering your car insurance rates – especially for guys under 25. That’s because insurance companies consider married people a statistically lower driving risk compared to their single counterparts. 

Married couples have been found to be safer drivers, with fewer moving violations, car wrecks, and claims. A study by the National Institute of Health found that single drivers were twice as likely to have a wreck involving bodily harm as married drivers – even when taking age, gender, alcohol intake, driving exposure, area of residence and occupational status into account.

The decrease in premiums for married folks depends on where you live, but in general ranges from 5 to 15% lower. Insurance companies consider it part of their proprietary formulations. So it’s hard to know exactly how much you’ll actually save. On top of those savings, as a married person you also get multi-car discounts, and the chance to bundle your auto insurance coverage with your homeowner’s or renter’s insurance for greater savings.

Four states disallow auto insurers from rating based on marital status – Hawaii, Massachusetts, Michigan, and Montana. In all other states, once you tie the knot, one of your first phone calls should be to your insurance agent to ask for a married person’s discount. With one exception…

What if you marry someone with a lousy driving record? In this case, you should not merge policies. Even if you keep your own policy, your rate might increase, now that you have a high-risk driver in your household. If their driving record is truly awful, list them as an excluded driver to save your current rate.

But be aware… They won’t legally be allowed to drive your vehicle, and they won’t be covered if they do drive it, and have a wreck. Which could put your personal and family finances in jeopardy.

5. Money and Marriage: Greater financial security for both parties.

Are you hitched or flying solo – and does it matter to your financial security?

According to a survey done by TD Ameritrade, it does. While some 45% of adult Americans are now single, financial security favors the married. Single folks may have more friends but the married have better finances.

From TD Ameritrade’s survey came these insights:

  • 43% of married folks rate themselves as very financially secure compared to just 29% of singles.
  • Married people out-earn singles by an average of $8,800 per year ($61,700 vs. $52,900).
  • Home ownership is much more prevalent among married couples – 90% vs. 58%.
  • Those who are married regard themselves as very knowledgeable about the stock market compared to single people, by a margin of 26% to 16%.
  • Singles also falter when it comes to saving money… 30% of them are not saving any money, compared to just 17% of married non-savers.
  • For those living paycheck to paycheck, the split isn’t as large. 37% of married people vs 40% of working singles live paycheck-to-paycheck.
  • If you’re on your own and lose your job, you may lack access to other sources of income. A spouse losing a job is definitely financially challenging. But two people can live on one income better than one person can live on none.
  • Two people can live in one place for less money than they could each live in separate places.
  • There may be tax benefits to being married.
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Two heads just may be better than one. Single folks may have more friends, but the married have better finances.

6. Money and Marriage: You can enjoy a better lifestyle.

With all the savings you realize, you’re free to spend money on other things. For the frugal-minded, there’s greater opportunity to save and invest money. Consider the following, if you both work:

1. Your share of the utility bills is now half of what it was when you were single. Your overall cable, Internet, trash, heating, cooling, and electricity bills are essentially the same regardless of whether one or two people live in the home. Ditto for home maintenance.

2. The same goes for landscaping, lawn care, home cleaning costs. If you pay someone to get the snow off your driveway, you still only have one driveway, but now you have two people paying for it.

3. Two people in a hotel room costs the same as one. Ditto for rental cars. Or your own car, for that matter (think road trips).

4. You might be able to share one personal vehicle and save a lot of money.

5. With those savings, you could sock away more for retirement. Or you could buy a bigger house or better cars, spend more on vacations and other amenities. Having more disposable income means having more possibilities available to you at any moment in time.

6. While not financial in the strictest sense, married folks also share the load of household chores. It doesn’t take that much longer to do laundry, clean, or cook for two than it does for one. So maybe you wouldn’t need to hire someone from the outside to help you with those chores. 

7. Money and Marriage: You’ll enjoy better health.

As reported by Harvard Medical School, a major survey of 127,545 American adults showed that married men are healthier than single men. And your health impacts your wealth.

Married men also live longer than single men. A Japanese study reported that single men were three times more likely to die from cardiovascular disease than married men. The Framingham Offspring Study reported that married men had a stunning 46% lower cardiovascular risk than single men.

Sparse data also suggests that marriage is positive for other health outcomes – such as a lower risk of depression, greater satisfaction during retirement, and better cognitive function.

Marriage appears not to play a role in cancer development. But it does improve likelihood of survival once diagnosed. Naturally there’s debate over why – and whether marriage is the sole or even major cause.

Some have argued that healthy men are more likely to marry than unhealthy men. But research actually shows the reverse… that unhealthy men tend to marry earlier and stay married.

Numerous studies over the past 150 years suggest that marriage is good for health. What’s the “why” behind those numbers? No one knows for sure. But in any event, it’s an important consideration, since your health impacts your wealth. 

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150 years of studies confirm it. Married men eat healthier and live healthier lifestyles than their single counterparts.

Perhaps it’s behavioral factors. Single men don’t eat as well as married men. They’re less likely to exercise and more likely to engage in risky behaviors such as smoking, excessive drinking, and risky hobbies. Married men also tend to get better medical care, and benefit from a higher standard of living.

Money and Marriage: Beware This MAJOR Caveat

Without a doubt, the greatest risk in getting married is getting divorced. Being married is usually better for your wallet than staying single. But divorcing cancels that benefit – plus a whole lot more.

The OSU study mentioned above shows that people who marry and later divorce were worse off financially than any other group. Following divorce, the average man had $8,500 in assets, while the average divorced woman had just $3,400. The study also pointed out that divorced people have 77% less wealth than singles of the same age group.

You might assume the attorneys were the big beneficiary in a divorce. That could be true. But many couple’s fortunes start changing up to four years before they actually end the marriage… possibly because they separate and maintain two households before they divorce. Or possibly because marital stress hurts their ability to work, earn, save, and invest money.

The financial impact of a divorce lasts for years, too. While the newly divorced see their wealth start to creep up during the first year, it’s a slow rise. Even 10 years after the divorce the median wealth of divorcees is below $10,000 – less than the $11,000 average for those who never married. Ten years later!

I personally know a number of people who’ve gone through divorces. They all were high earners. Every one of them admitted that their divorce was their single biggest “financial mistake.”

The Bottom Line

So yes, tying the knot can have significant financial upside. You can realize savings in multiple areas. And those can then be applied to more investments, a nicer retirement, or a lifestyle upgrade.

But choose that partner wisely. Have honest and frank discussions about money and your spending/saving habits and lifestyle expectations before you get married. I believe you should know their credit score and debt levels before you even agree to an engagement. As well, set a small financial goal together and see if they’re faithful to what they agree on.

Start out on the right foot by paying cash for your wedding. (Studies actually show that less expensive weddings are linked to greater marital happiness.) Money fights are a leading cause of divorce (if not the leading cause). Which is one of the reasons we’re so passionate about helping you navigate the tricky waters of money and marriage, personal finance, and debt repayment.

Bottom line? The best thing you can do for your finances is to tie the knot. And then never, ever untie it.

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How to Become a Millionaire

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