Tuesday, February 8, 2011

Savings and costs for couples

Today I came across an article on Bankrate.com that supports my argument in last Wednesday's post that couples with shared income can save money more easily than singles. This article, "Marrying for Richer Rather than Poorer," notes that in a 15-year study of married and single people, singles were able to save about $11,000 of wealth over the 15 years, while "people who got married, and stayed married, accumulated about $43,000 in 10 years of marriage." The article then goes on to point out some of the reasons why married people may find it easier to save. For instance, while it isn't strictly true that "two can live as cheaply as one," it certainly is cheaper to maintain one household than two. You can save on food by buying in larger quantities, and you're less likely to pay someone else to do outside jobs (such as housecleaning) when there are two of you to share the burden.

Tax breaks and other financial perks are a significant issue as well. While some people make a big deal about the "marriage penalty," the fact is that this penalty only applies to couples whose two incomes are roughly equal; if one partner makes more than the other, then filing as a married couple will most likely mean paying less in taxes. Moreover, there are certain tax breaks that are available only to married couples. And
in addition to paying less in taxes, married couples can also inherit each other's retirement assets and collect on each other's Social Security. (In fact, given the various ways the government discriminates in favor of married couples, it's hard to swallow the argument that it isn't discrimination to prevent same-sex couples from marrying—but that's a whole article in itself.)

Now, lest you single folks start fretting about how much you could be saving by tying the knot, I should point out that another Bankrate article points out the costs of couplehood. A romantic dinner for two at Delmonico's, for example, costs about $300. A dozen red roses runs anywhere from $35 to $90 (including delivery), and an engagement ring can run into the thousands. And while this article doesn't go into the costs of an actual wedding, the popular wedding site TheKnot.com puts the average cost at an eye-popping $27,800. (Needless to say, frugal individuals can avoid a lot of these costs, or cut them considerably. It is quite possible to eat out for $30 rather than $300, and I can safely say that you can have a perfectly nice, if not lavish, wedding for $2780 rather than $27,800.)

In some ways, it seems like the way to have the best of both worlds—at least in financial terms—is to share a household, but not with a romantic partner. By living with a friend or a sibling, you can share household expenses and chores without being expected to bring flowers on Valentine's Day. True, you don't get the tax perks, but then, you also don't have to explain away the lipstick on your collar (unless your roommate is the one who does the laundry).
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