The Cost Of Living – Married Vs. Single

The Cost Of Living:

Married Vs. Being Single

by Tom Van Riper

Marriage has a way of making people grow up and think about the future.  Nights out with friends and crawling stores for clothes are replaced by eating in together and saving for a house.  But while that priority shift eventually creates more stable finances, in the short term, it puts a squeeze on your wallet.

On a month-to-month basis, marriage just doesn’t pay.  At least not far beyond the honeymoon phase, after which the happy couple invariably decides to leverage its new status into better living quarters, nicer cars, and more “mature” spending priorities like insurance and church donations.  

Getting hitched does have financial benefits at first.  We looked at the monthly expenses of three New York City households; a single person earning $90,000 a year, a childless couple earning $170,000 a year, and a family of five whose annual income is just over $500,000.   A peek at their actual household expenditures shows, not surprisingly, that a married couple pays substantially less proportionally toward basic living costs than a single person.

For example, only 9.3% of the couple’s $14,200 monthly gross income goes for rent, compared with 23% of the single person’s $7,500 monthly pay.  The couple also pays less for food (5.6% vs. 8.3%), cable television (1% vs. 1.8%), and the telephone bill (1.2% vs. 2.8%).  And auto insurers place married people in a lower-risk class, saving them money on car insurance.   The married couple also gets some relief on both Federal and Social Security taxes, thanks to the slightly lower tax rates associated with joint filing.  They pay out a combined 2.9% of their salaries, compared with the 35% the single person pays.

“The Republicans have mostly eliminated the marriage penalty, and a higher-earning spouse can effectively shield his or her income from higher taxes,” says Chris Edwards, tax policy director at the Cato Institute.  A few other costs also tend to dwindle once a person has succeeded in snagging a spouse.   “Singles tend to spend a lot on gyms, fitness, and clothes,” says Chestnut Financial’s Valerie Adelman, who counsels individuals and families on financial planning.    But once a couple settles into married life, new expenses aren’t far behind.

Married couples tend to start saving for retirement early on, while singles generally wait until their 40s.  So, while wedding bells usually lead to a smoother path to retirement, they produce a more expensive month-to-month life-and they meaning less free cash in your pocket.

Newly married couples also tend to purchase a house or condo within a couple of years.  This allows them to accrue equity—a positive thing—but also forces them to incur big expenses, like household maintenance, homeowners and life insurance, and furniture.  While there are plenty of renting couples and home-owning singles, married people account for 77% of all homeowners, according to the Center for Politics.

Despite the expenses, single people actually do well when they buy a house.  Even though affording a down payment is tough for most singles, they stand to benefit more than married people from the tax code.  With a standard deduction of $4,750 annually, a single person sees the benefits of itemized deductions like mortgage interest and property taxes before a married couple filing jointly, for whom the standard deduction is $7,950.