PERSONAL FINANCE

Tying the Financial Knot: Money & Marriage

When it comes to love and money, tying the financial knot involves adjustments and compromises. By understanding expectations, setting common goals, and mapping your journey as a couple, you can build a healthy financial foundation for the future, together.


The State of Modern Marriage

People are waiting longer than ever before to get married. The median age for women is 28 and 30 for men compared to 20 and 23 in the 1960s.1

Median Age Of Marriage In U.S. By Gender

2 2 2 4 2 6 2 8 3 0 2 2 2 4 2 6 2 8 3 0 1960’s Today
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In 2018, a record of 35% (39 million) of Americans ages 25 to 50 had never been married.2

Wedding Sizes and Costs Are Decreasing

people icons highlighted to show survey results

58% of couples surveyed are cutting their guest count by an average of 41%. 3

part of a dollar

46% of couples are cutting their budget by an average of 31%.4

Smaller weddings could likely translate into extra savings for other priorities and milestones, such as:

  • House

    the purchase of a new home

  • Teddy Bear

    starting a family

  • Graduation Cap

    paying off student loans

Young Adults Forecasted to Give Up on Marriage

Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage
Illustration of percentage people giving up on marriage

One fourth of today’s young adults are forecasted to give up on the institution of marriage altogether by the time they reach their mid-40s to mid-50s.5

2 of 3 Millenials Have Priorities Other Than Marriage

AGES 18–29 67 % 33 %
53 % 47 % AGES 30–49

2 out of 3 Millennials between the ages of 18 to 29 agree with the sentiment that society is just as well off if people have priorities other than marriage and children, as did 53% of those between the ages of 30 and 49.6

The Financial Perks for Newlyweds

  1. List Number 1
    1040 Tax Icon

    Filing Taxes Jointly:

    If one spouse is making significantly more than the other, you may qualify for a lower tax bracket when filing jointly as opposed to the higher-earner’s single bracket.

  2. List Number 2
    New Page Icon

    Health Insurance:

    When it comes to health insurance, it can be more economical to add an extra person to a policy than to pay for separate health insurance plans. This is particularly useful if one spouse is self-employed.

  3. List Number 3
    Gift Icon

    Gifting Money:

    As U.S. citizens, you can make tax-free gifts of any amount to your spouse rather than paying gift taxes in the event one of you is supporting the other financially.

  4. List Number 4
    Wine Glass Icon

    Retirement Savings:

    You can contribute to a spousal IRA. If one of you is not working, the working spouse can generally contribute to the non-working spouse’s IRA.

Financial Considerations for Married LGBTQ Couples

Outline of Two People

1.1 million married same-sex couples in the U.S.7

25%

Only 25% of the LGBTQ community feels confident they’ll be able to achieve financial independence later in life.8

The Obergefell vs. Hodges Supreme Court ruling that established marriage equality for same-sex couples offers the same financial benefits, rights and protections available to married couples, including:

  • First Aid Kit Icon

    Healthcare coverage options

  • Tax Filing Icon

    Joint income
    tax filing

  • Palm Trees on Island Icon

    IRA and other retirement plan

  • Open Hand Icon

    Social Security spousal benefits

  • Stethescope Icon

    Eligibility for workers

  • Teddy Bear Icon

    Greater adoption and family planning

  • Home Icon

    More effective estate planning and gifting strategies

To Join or Not to Join

Should you combine your bank accounts or keep finances separate? Here are the pros and cons of both scenarios:

The Pros and Cons of Joint Accounts

Plus Icon Pros

  • + Can simplify managing family budgets and paying for shared expenses like rent or groceries.
  • + Can help you establish a healthy financial dialogue and avoid money secrets by encouraging transparency.
  • + Spouses have immediate access to funds in the event of an emergency.

Minus Icon Cons

  • — Can cause tension if one spouse has significantly different spending habits or varying levels of income.
  • — Reduces privacy and discretionary spending.
  • — Spouses are tied to each other’s credit history and/or debt.

The Pros and Cons of Separate Accounts

Minus Icon Pros

  • + Can give couples a sense of financial independence and autonomy.
  • + May encourage more budgeting discipline with access to a smaller pool of funds.

Minus Icon Cons

  • — Tracking spending patterns, savings goals, and budget benchmarks can be more complicated when working across multiple bank accounts.
  • — The responsibility of paying joint expenses and bills falls on one spouse.
  • — Harder to cover larger joint expenses or float the cost of large purchases if one partner's income is timed differently.

If you choose to skip the "big day" altogether, ask your Financial Advisor about the financial benefits of a Domestic Partner Agreement or Cohabitation Agreement.

Bullseye Target Icon

WINNING PLAYS for Couples:

  • Chat Bubbles

    Communicate, communicate, communicate.

    Start by asking your partner about any debt, secondary income sources, expected inheritance, or properties you should know about. Communicating early and often will help you both become more comfortable with the topic and avoid unpleasant surprises in the future.

  • Calendar

    Schedule monthly or quarterly money dates.

    Timing is everything when it comes to discussing the money and it helps to plan ahead so no one is blindsided. Get in the habit of scheduling regular meetings to discuss your finances and address any concerns or questions that may come up throughout the year.

  • Head outline with dollar symbol

    Get to know your partner’s money personality.

    Everyone approaches his or her finances differently. Some people are savers, others are spenders, and some people prefer to avoid the topic altogether.

  • Upside down piggy bank

    Agree on an individual spending limit.

    To avoid the negative connotation of having to “ask for permission” to spend money from a joint account, agree that any purchases above a set limit must be discussed and agreed upon together.

  • Piggy Bank

    Establish common money goals.

    It’s important to be working toward common goals. Establish how much you are each going to contribute toward your goal every month and stick to it.

  • Sheets of Paper

    Get filing.

    Make sure to organize all financial documentation, including both individual and joint paperwork, in a central place.

Interested in learning more? Ask your Financial Advisor for our full Playbook chapter on Tying The Knot, or check out MS.com for more articles on the topic.

This infographic is inspired by Morgan Stanley’s series "The Playbook: Your Guide to Life and Money".

Sources

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