If you’re planning to marry soon, surely, there will be countless things on your mind. Regardless of whether you’re a woman or a man, marriage brings about countless changes in our lifestyles. Regardless of whether you’re marrying for the first time or have tied the knot earlier, marriage means a lot of changes in life.
One of the major changes that you could expect with a spouse is the way money is handled. As a matter of fact, money management and financial issues are extremely important in any marriage, regardless of whether you or the spouse are earning. This means you need to talk about money and agree on every issue related to money in your household.
Money and Marriage
A survey by financial major TD Ameritrade shows some rather disturbing statistics. About 40 per cent of persons from Gen-X or those born between the mid-1960s and early 1980s divorced due to money-related issues. Among Boomers or those born between 1946 and 1964, the divorce rate due to money-related issues was 29 per cent.
According to Wilkinson & Finkbeiner, a law firm, 67 per cent of all marriages in the US end with divorce over a 40-year period. The report also adds that one divorce occurs every 42 seconds in the US. In most cases- about 75 per cent- it is the wife that files for a divorce.
By any standards, these are rather shameful figures that put the US at No-6 of the countries with the highest divorce rates. While domestic violence and infidelity are causes for divorce, a large portion of these cases also occurs due to money-related issues between a married couple.
Therefore, it’s important to avoid any issues related to money in your marriage because divorce can play havoc with your finances in various ways.
Reasons for Money Problems in Marriage
You might wonder why money problems arise in any marriage. Actually, there’re several reasons why money becomes a bone of contention between spouses. Here, I will list some of these issues that are common and could lead to an unhappy married life that ends in divorce or separation.
- Refusal to share money
- Denial of equal financial rights to the spouse
- Hiding income and savings from the spouse
- Overspending on self and neglecting spouse
- Dominating the spouse that has no income or less money
- Neglect of household
- Irresponsible spending
- Wastage of money on addictions
- Seeking control over the money of the spouse
- Disagreements over household expenses
If you’ve been married earlier, some of these reasons would definitely sound like something from the past. Remember, such issues could also plague your next marriage or even the first one if you’ve not tied the knot earlier.
One of the main reasons that money also becomes a problem in the life of a married couple is because of the financial benefits of tying the knot. Yes, every marriage on this planet does bring about some financial perks or financial benefits to both spouses. Unfortunately, some couples tend to misuse these benefits leading to disagreements, quarrels and even domestic violence.
Therefore, it’s important to know what’re these financial benefits of marriage. That could help avoid any disagreements in future and protect your marriage against separation and divorce.
Top Financial Benefits of Marriage
These financial perks that I am writing come after every marriage, regardless of whether you’re marrying for the first time or were married earlier. Knowing these financial perks of marriage could help build a stronger relationship with your spouse, and both can benefit mutually.
A married couple can pay lower taxes due to tax penalties and tax bonuses. However, to get these benefits, they would have to file their tax returns jointly instead of singly. If you study the examples given by the Tax Policy Center, it would be easier for you to understand how marriage penalties and marriage bonuses in taxation work.
In simple terms, your tax liability is higher when you file tax returns singly. But when you file as a married couple, you will pay lesser tax.
Furthermore, your tax liability also goes down when you have kids. The overall standard deduction of a married couple is also higher, which means, you pay taxes on a smaller amount instead of your entire income for a taxation year. There’re several debates over taxation for a married couple and a family.
However, you can be assured that the Internal Revenue Service (IRS) has a very liberal taxation system that considers your income and liabilities a bit softly when you’re married.
2. Bigger Loans and Mortgages
Usually, one of the spouses would own a home before marrying. However, if you need to buy a new house for living or even a retirement home, it’s possible to get a higher mortgage when you apply jointly with your spouse.
The mortgage company will combine your incomes and tax liabilities to find the total you could borrow. This could prove very useful if you’re planning on buying a bigger or better home but don’t have enough cash and can’t qualify for a higher mortgage alone.
Additionally, you can get higher loan amounts as vehicle finance or even a personal loan when you combine the two incomes. Unfortunately, this benefit won’t be available if your spouse doesn’t have any active income.
However, in most cases, it’s seen that a married couple doesn’t really require a large loan amount since they have a larger household income. As a matter of fact, banks and other lenders are more than willing to loan money to a married couple if they qualify with their credit scores.
Also read: Tips to Save Money On Buying a Home
3. Greater Savings Potential
Before the Covid-19 pandemic caught us unprepared in early 2020, an American household would save an average of 30 per cent of its income. Sadly, job losses and the economic downturn during the pandemic caused several families to live off their savings, thus depleting the money they had stashed away for retirement or other purposes.
Yet, couples and families where both spouses had an income could better survive the pandemic and bear the brunt of the economic recession since they had larger savings.
Once married, you could combine your savings with that of your spouse and have a larger amount of money kept away. Having savings jointly also benefits you in other ways: it gives that deep sense of financial security and financial independence. In other terms, it means that your household doesn’t need to borrow money from anyone.
Your household can overcome all financial problems easily because of large savings. It means timely payment of mortgages and other dues such as credit card bills and instalments on other purchases.
4. Superb Investments Portfolio
If you and your spouse agree, both can create a superb investment portfolio with the best stocks, cryptocurrencies, currencies, commodities, Mutual Funds, Exchange Traded Funds, bonds and other securities for the future. Now many
are available online where you can invest easily. The value of these investments often rises. The stock market naturally falls sometimes but also rises to pay rich returns on your investments.
Investing jointly means, you will have a large number of stocks and other such assets for the household. As their value rises, the net worth of your household also grows exponentially.
In stark contrast, a spouse investing singly wouldn’t be able to buy as many stocks or ETFs or other assets that would make a significant difference for the future. You can almost double your investments or even triple it when you combine your savings with that of your spouse. As most financial advisors will tell you that it’s better to invest jointly with your spouse to get superb returns from such assets.
Millions of couples across the USA and countless others around the world combine their money to make the best from their investments and get superb returns over a span of time.
5. Joint Business Ventures
Nowadays, having a single source of income for any household isn’t really enough. Though you and the spouse could have steady jobs with a good income, it’s always better to have more streams of income. Hence, as a married couple, you could consider opening a home-based business that depends solely on the skills you have and those of your spouse.
There’re at least 20+ ideas for superb home-based businesses that you could use to open such a venture. Here, it is worth knowing that freelancing is also a business. A freelancer is known as an independent contractor that provides work to a customer.
Should you or the spouse decides to become a freelancer, the other partner can take on supporting duties such as household work. That leaves the spouse who’s freelancing to focus on the work and earn more for the family. When you work with your spouse on such a business, there’s no need to spend money on payroll.
And, either of you could manage the business while the other is away for any reason. Furthermore, if one of the spouses is unemployed for any reason, they will feel a sense of purpose by opening their own business or managing a family venture. It means their skills are also useful, and their efforts are appreciated for the business management on a daily basis.
Other Financial Benefits of Marriage
Other than these top five financial perks or money related benefits of marriage, there’re a few more. I will list them in order for you to know.
- Lesser expenses on gadgets: As a single person, you might require a TV set. And even as a couple, you would require a single TV set, or, for that matter, a washing machine, dishwasher or other gadgets. Marriage can help you save a lot of money, including food and entertainment.
- Cheaper Insurance Plans: Getting Insurance and health plans are often cheaper for a couple and a household compared to singles and taking them singly. You can save a huge amount of money on joint plans.
- Better Money Management: Single persons usually tend to overspend or have no budget. However, as a couple or household, you learn to budget your money and spend it wisely on the family's needs and wants.
- Joint Decision Making: As a married couple, you can take joint decisions in money related matters. That way, you can both think of what’s best for your family and households and get more from the money in terms of investments and returns. Joint decision making can also help prevent financial disasters.
- Comfortable Retirement: Usually, a married couple invests jointly for their retirement. That means, you can subscribe to more annuities and retirement plans that would ensure you don’t run out of cash in those golden years when there’s no active income.
These five benefits, combined with the top five perks, will definitely prove useful only if you plan with your wife or husband. To make finances work in a marriage is the ultimate responsibility of both spouses.
A Word of Caution
While it is true that you can enjoy each of these benefits of marriage and make the best of money, it’s also important to understand that these matters need to be discussed completely with your spouse, either before the marriage or soon after.
The more financial transparency between a couple, the greater their chances of having a successful marriage and getting the highest benefits from these perks of getting married.
In some countries, people marry only for financial benefits. This usually occurs due to the unfortunate and outdated system of dowry or bridal gifts, leading to greed among grooms. Such marriages are best avoided, regardless of the community you belong.
As the old adage goes, money can be your best friend or worst enemy. This doesn’t mean that having money makes life happy or that not having money means a sad life. Money by itself is lifeless. We, humans, give it importance. If you handle money properly and use it for the benefit of your spouse and household jointly, it can actually become your friend and even a blessing. But having money and playing truant can cause your marriage to weaken, flounder and fail.