From a pure financial perspective, there is generally not much difference between a couple who are living happily together and a couple who are married. Therefore, for the most part, I will concentrate on why a healthy romantic relationship benefits financial stability. However, where applicable, I will also cover specific elements that may be influenced by whether a couple are married.
Planning for a future together:
When you are with someone that you love, there is usually a natural desire to ensure that you can cater for that person’s long-term wellbeing. Part of this wellbeing will be emotional and involves demonstrating to them that you love and support them. However, there is also inevitably a financial element to wellbeing. You want to ensure that they have a house over their head and that both of you have enough money to be able to enjoy a good standard of life.
Additionally, you may start to think about kids and this will likely be especially true if you have taken the step of getting married. The chances are then that you will also be thinking about how you can ensure that both the love of your life and your kids are catered for and will be even if you were to die.
It is this increased sense of responsibility that contributes most to a changed perspective towards finance and those who have got married will appreciate this especially as they will have gone through the expense that a wedding entails! This is in contrast with when we are single when there can be a tendency to simply drift along, never thinking about the future or about investing towards that future.
Another element to consider is that couples can benefit from having two incomes. Often, costs don’t double when you go from being single to being part of a couple, so your overall disposable income rises. Additionally, you can work your finances to maximise tax efficiency. For example, in the UK, each individual can put 3,600 into a tax-free ISA savings account each year. Let’s say that I always put this full amount into my ISA each year but my wife doesn’t. It may be prudent, then, for me to fund my wife’s ISA up to its yearly limit, thus ensuring that 7,200 of our yearly savings are tax-free.
The benefit of this combined resources element is most pronounced where one individual earns significantly more than the other. One of vthem may be liable to a higher band of tax but may be able to limit the amount of tax that they are liable for by registering accounts or shares in the lower earner’s name. This can be particularly important later in life, when inheritance tax starts to come into play.
Marrying into money:
One way that marriage can enhance your financial stability, of course, is if you marry into money. This may seem very mercenary but hopefully it will only be a small proportion of men or women who marry purely for monetary reasons. Nevertheless, if the person that you have fallen in love with just happens to be well off, or the potential heir to a fortune, then all the better. Money is important to the way that we live our lives but it’s worth remembering that it can also cause problems.
In the unfortunate cases where a marriage ends in divorce, the legal system has evolved so that the wife is entitled to a proportion of her husband’s wealth, or vice versa. We’ve probably all read the reported figures involved in celebrity divorce cases, such as Madonna and Guy Ritchie. Whilst most divorce cases won’t involve such large sums of money, they can still be significant sums for the parties involved.
The paying out of such monies came about from a desire to protect wives who had been dumped (sometimes after many years) by their husband and who then faced financial destitution. In a way, therefore, you could say that this contributes to financial stability, although I suppose the higher earner may feel that the reverse is true. It’s also worth noting that common law wives and husbands are also afforded protection these days where their long-term relationship breaks down.
There are some cultures where a dowry is still paid, from the bride’s family to the groom or to the groom’s family. This can be an important step towards financial stability for the couple. From a western perspective, I suppose such arrangements can appear odd but it is really not that much different from the custom that we have of the bride’s family contributing towards the cost of the wedding.
The typical cost of a wedding in the UK is said to be 11,00 (which equates to around $16,000). Many marriages, therefore, actually start out as a significant drain on the couple’s finances. However, the fact that a couple are devoted to each other and have agreed to confirm the depth of this devotion through the marriage ritual, usually means that they are more likely to plan for their future financial wellbeing. Hopefully, money will be the last thing on their mind on the happy day but, thereafter, they can combine their resources to ensure that their financial management is efficient. Additionally (and especially in some cultures), the coming together of two families may pave the way for a greater degree of financial stability.