Getting Married: A Losing Financial Proposition?
I hate to say it, but one reason I am hesitant to get married at this point in my life is because of the financial implications. I think about the financial implications of everything I do, so it follows that I would be no different when it comes to the decision of marriage--which is one of the biggest financial decisions you'll ever make.Unless you have so much money that you don't need to think about the financial implications of your decisions (which probably isn't the case if you're reading this article), you should consider these potential financial disadvantages of marriage before you get hitched.
1. How much will the act of getting married cost us? The cost of joining in holy matrimony can be as low as the fee for a marriage license or as high as the sky. If you have well-to-do parents who are paying for your wedding, cost may not be an issue for you. If you want to have a wedding and are planning to pay for the wedding yourself, however, it may be difficult to do so for under $5,000. In my opinion, there are many better things a young, newlywed couple could do with even $5,000 than throw a large party, let alone $10,000 or $25,000. Even if the funds for your wedding are coming from parents, consider what they could do for you with that money instead of throwing a wedding--like provide a down payment for a house, or start a college fund for your future children (if that's in your plans). The flip side is that the only other occasion in your life when you're likely to get everyone you like and love together under one roof is at your funeral, so it might be worth spending a few bucks for this occasion. No, you can't put a price on memories--but you don't have to put a price you can't afford on them, either.
2. How will getting married affect our income tax liability?Depending on your combined incomes and the details of your individual tax situations, getting married can either reduce your combined tax bill or increase it. There is no blanket marriage penalty or marriage reward when it comes to income taxes. If money is tight and getting married means you're going to owe another $1,000 a year in income tax, maybe you're better off postponing the official husband and wife thing and saving that $1,000 a year until your incomes rise enough or your expenses decrease enough that it becomes less significant to you.
3. If one partner is self-employed and the other is an employee, how will getting married affect the self-employed partner's medical benefits? The income tax code infuriatingly takes away the ability to claim health insurance premiums as a tax writeoff for the self employed once you are married if you are eligible to participate in a spouse's program. This means that either your health insurance premiums effectively increase by your marginal tax rate, or you have to go with your spouse's group policy (a change which comes with enough implications for a separate article).
4. Do I trust my potential future spouse with my money? If you don't, well, you probably shouldn't be getting married until the situation improves or you find a more reliable partner. Getting married will increase your spouse's access to your money on all levels. A spouse who is dishonest, a spendthrift, has a gambling problem, is irresponsible, or who refuses to become informed about basic money management is going to affect your financial situation whether he knows your PIN or not.
There are, of course, more aspects of the decision to get married than the financial ones, as any long-term couple who doesn't have the right to marry will attest, but I think that many people, blinded by love and convention, do not consider the financial aspects of marriage at all until after the fact. At the very least, people should be aware that there are financial implications to the decision and make a consious choice of whether to factor finances into their decision to get married, even if they ultimately decide that factors like religious beliefs or emotion are more important.
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