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There comes a season in our lives where it seems almost everyone is getting married. This makes it harder to believe research suggesting that marriage has lost its “market share” over the past half century. Even more so the increasing evidence suggesting that many of us millennials are saying no to marriage.Whilst the popularity of being single may be great for some of us, there’s a down side to this. For the most part being single means the odds are against us when it comes to accumulating a fortune of wealth.
As a single, it was shocking to discover that being married could leave me up to four times richer than remaining single. To further add salt to my wounds the National Bureau of Economic Research found that the median 65-to-69-year-old married household had almost 10 times as much in savings as the typical single-person household: $111,600 compared with $12,500. But why is this the case? We get it, two salaries are better than one. But logically another person in the picture also means more consumption right? So wouldn’t the addition level itself out at some point, especially when the little mini-me’s start coming along? Well, according to the stats, not really. The following are 4 main reasons why getting married could be good for you financially. Considering that I’m single, do excuse my tone if it ever gets bitter during any point along this article.
Number 1: Cost savings (Basically the heightened ability to be cheap bastards)
According to Forbes, the power in cost savings in marriage is that it helps the pocketbook where it counts. And that’s with the bigger expenses such as rent or mortgage payments and medical aid and car repayments. Couples can only build wealth if the extra savings are invested and not spent on lavishly improving lifestyle conditions. Basically a couple making a joint income of $100,000 a year who invests 25% of their income due to reduced expenses in marriage (and earns 6% on their investment) would have over $2 million in 30 years.
Number 2: Increased access to low cost credit (more debt, yay!)
Married people have the benefit of strategically managing their debt. This is because a credit score is linked to the individual and is not determined jointly. So for instance if one partner has a good credit score, a home loan on that partner can be taken out. Meanwhile a loan on something like a vehicle can be taken out on the spouse with the weaker credit score. The one partner’s additional credit score strength can speak volumes. According to Forbes, the difference between a credit score of 640 and 740 can save you about $140 a month over 30 years on a $300,000 loan. That amount can subsequently be turned into just over $137,000 for retirement in 30 years at a 6% interest rate.
Number 3: Financial support and stability (in case one of you becomes broke, the other can buy bread)
Thomas Stanley in his book The Millionaire Next Door mentions marriage as a one of the characteristics of the rich. Giving advice to newlywed professionals in his book, Stanley says that they could consider living on one income and saving/investing the balance. This makes emergencies less devastating financially. If one partner loses their job, the temporal hardship whilst they look for a new job is much less of a blow than a 100% loss of income. Even though the couple’s inflow into their savings may cease or decrease for that period, they will be able to continue living on one income. Also, they won’t have to dip into their savings to put bread on the table.
Number 4: Ability to generate more income (you apparently hustle more when you are married)
So apart from sharing costs, married people are able to divide responsibilities beneficially among themselves. For instance one spouse can work from home to handle the household duties (both men and women alike-think Anders Holm being a house-husband in the movie The Intern), thus allowing the other spouse to work for more hours in a day. This would cost you hiring help if you were a single parent- which isn’t always a cheap and reliable option. A study by The Washington Post revealed that married people work about 400 hours more per year than their single peers. Look at that guys, not only are we single, we are lazy too! A Harvard study found that married people are much less likely than their single peers to quit their current jobs unless they had another job lined up. Because single people like to live on the edge right? There’s also a social transformation to marriage that leads to savings. Married people are likely to spend less time out (spending) with friends and more time at home with their families.
This does not mean that it’s absolutely impossible for unmarried people to make the rich-list. Just look at Oprah! However, if the grass on the other side is said to be greener, there’s no harm in finding out why.