The Single Greatest Financial Investment - Your Marriage

Filed in archive Marriage and Finance on February 6, 2006

It is always refreshing and enlightening to me when I hear the reports concerning the effects of remaining married has upon your finances. While these facts have been known to me for years, many people still don't quite know the significance of the financial rewards, in addition to the personal ones.

I was reminded of this in a post on Free Money Finance today. The writer comments on a report by Laura Rowley of Yahoo Finance on a report by Ohio State University.

"Economist Jay Zagorsky of OSU's Center for Human resource Research, tracked the financial and marital status of more than 9,000 people from 1985 to 2000. Married people amassed an astonishing 93 percent more than single or divorced people over the 15-year period."

"Wealth was defined as a participant's total assets, such as bank accounts, stocks, bonds, and real estate, minus outstanding debt, such as a mortgage. The data came from the National Longitudinal Survey of Youth, a study funded by the U.S. Bureau of Labor Statistics that has repeatedly surveyed the same individuals over time."

The reports conclusions were that those who married and stayed married had a tremendous advantage over those who were single.

It says, "...people who married and stayed married showed a sharp wealth expansion after they wed, growing to an average of about $43,000 by the 10th year. For single people, assets grew from less than $2,000 at the start of the survey to about $11,000 by the 15th year. "

Those who divorced saw their wealth shrink by 77 percent -- a larger decline than would occur by simply splitting a couple's assets in half.

"You lose economies of scale in divorce -- you need two places to live, two cars," Zagorsky explains. "Divorce is quite expensive, paying for lawyers and court fees. Divorce is also time-consuming. It may take time away from work, which also reduces many people's incomes." In addition, divorce weakens the incentive to work harder in the future, particularly if a percentage of income is garnished to pay alimony.

Again, this is not the first time these general observations have been made. To see a study done over a long period of time with a large group of people confirm these conclusions is a call to learn more on how to make finances a positive in your marriage and life rather than a cause for ending your relationship.

Next post we'll talk about practicals on how to make things work.