On the first Friday of every month, my husband, Jonathan and I have our money meeting. We assess the changes in our savings and investment accounts that occurred in the past 30 days and discuss plans for spending and saving during the next month in order to achieve our financial goals.
Before we said "I do," I was not money conscious. I always paid my bills on time, but I was very conservative when it came to saving money. Ten times out of 10, I’d opt for going shopping or out to dinner or the bar with friends over putting $50 aside for the future.
According to an article in Moneyish, I’m not alone. “More than one in three people (37%) say that they started paying more attention to finances once they got married,” writes Catey Hill. Furthermore, “30% said they started saving more money once they got married, and 10% say they started spending less money.”
One of the first financial explorations of your change in marital status is the wedding ceremony. If you and your partner have never had a conversation about money before getting engaged, having a conversation about how to pay for everything from the venue to the dress is unavoidable, but also important. A couple’s first exchange about financial habits and debts helps them understand how they can partner to develop a financially healthy future together and secure their economic well-being. This moral support is another benefit, with 30% of married people identifying it as “the single biggest financial benefit of getting married.”
Money consciousness is clearly one financial benefit for married couples, but it’s certainly not the only one. Here are five more financial benefits of marriage.
1. Financial Security
Dual-income couples have greater financial security. “Two incomes results in less financial stress,” says Richard Fernandez, who has been married to his wife, Sofia for 21 and a half years. “We have been blessed to have never been unemployed….Although we are far from wealthy, we have never been in a financial panic. We wait to do things when we can afford to do it. We waited 12 years to remodel our hideous kitchen, and that is just one example.”
Richard is a retired New York City Police Officer who served for 24 years before stepping down due to multiple sclerosis (MS). His medical expenses are very expensive; however, the diagnosis could have been more of a burden if he wasn’t married—and therefore he was able to benefit from his wife's health insurance. He shares, “My wife’s health insurance is more costly than the health plan offered by my former employer, but her insurance covers more. Yes, we pay more in up-front costs, but we save a lot more because I have very high medical expenses that her policy covers. As a result, we probably save about $12,000 plus a year.”
Richard and Sofia’s employers both offer a pension and tax-deferred savings plans, which help them save more for retirement. Plus, their shared incomes have allowed them to save more for their son’s college fund than what they would have been able to save from just one paycheck.
2. Financial Flexibility
Two-income couples also have more flexibility when it comes to spending. In the article I wrote about paying off my student loans in just six years, I revealed the harsh reality of homeownership. Jonathan and I paid more than $100,000 in renovations on our fixer upper of a first home (so far). There is no way we could have afforded to do that extent of work in just two years without both of our salaries.
Financial flexibility means something different to each couple. In addition to investing in our home, my husband and I enjoy going out to dinner once a week and also travel the country on marathon vacations. Spending time together through meals and vacations is important to us, so in our monthly finance meetings we strategize how we can pursue these luxuries.
On the subject of running, I know the Fernandez family through my local running club, the Rockland Road Runners. A core value of the organization is giving back, which is a shared by club members including Richard and Sofia. Richard shares, “We believe in making financial donations regardless of our economic circumstances. Being married helps us to make sure the bills are paid and we are still able to give.”
3. Tax Breaks
The tax code does play in favor of married people, but the degree of economic benefits varies for each couple.
One tax benefit that all married couples can take advantage of is the exemption from the gift tax. The IRS defines gift tax as tax on a “transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” The term “gift” is deceiving because what one may not consider a gift may qualify as taxable according to this law. Consumer Reports explains, “Sharing large expenses might trigger gift tax issues” for unmarried couples, like if you're living together, and one person pays the majority of the bills. When your marital status changes, these “gifts” are no longer taxable. As the article quotes, “The IRS views married couples as a single taxpayer.” In other words, you can’t get taxed for “gifting” something to yourself.
Lower earning married couples can reap additional tax benefits. Even if one person earns a significant amount more than the other, the lower salary could “serve as a tax shelter” by keeping the couple in a lower bracket, which can increase the likelihood of a tax return.
4. Social Security
For as long as it is around, social security benefits will benefit married couples. A couple that has been or was married for 10 years “can claim either their own benefits based on their earnings—or half of the former spouse’s benefits, whichever is higher, once they reach full retirement age,” writes CNBC. Furthermore, social security benefits include survivor benefits, which means a “widow or widower can receive full benefits at their full retirement age or at any age if they take care of your children who are younger than age 16 or disabled. People can claim reduced survivor benefits at age 60.”
5. Everyday Savings
Lastly, but certainly not least, the nature of a marriage involving two people presents everyday savings based on their individual habits. This relates back to the notion of money consciousness stated earlier, but it goes a little deeper.
For example, I use ebates religiously for online and in-store cash back incentives. I’ve also used the Ibotta app and have scoured sites like Groupon and Retail Me Not for discounts. A big savings I’ve discovered recently is subscribing to my local supermarket’s newsletter since I rarely pick up the printed circular. My husband has caught on to using ebates when shopping, but I am the coupon connoisseur in our relationship. So even if we save a dollar here and there, my coupon habit is for the greater good of our economic well-being.
It’s important to recognize that no one married couple’s lives are the same and that some financial situations are more complicated than others. If you have specific financial questions, contact a financial or tax professional who can advise on your unique partnership and spousal benefits.
Kristen Farrell is a professional communicator who previously worked in human resources. She shares career lessons and everyday experiences on her blog: kristen-farrell.com. When she’s not writing, you’ll find her running, crafting, or spending time with her husband, Jonathan and cat, Trotsky.