Money Obedience

Even though the average cost of a wedding in the United States fell $6,000 in the last year, thanks to the recession, the average US couple still spends $21,814 on its wedding (according to CNN Money). The latest report on median individual income is $26,625! (People living in the suburbs of major cities make slightly more, and those with a four-year college degree or higher making on average just below double the median amount, according to the Current Population Survey). Given those numbers, it’s clear that a couple intending to marry has to either save a great deal beforehand or agree to pay down a large debt afterward just to have an average wedding ceremony. Granted, you could argue that some of the wedding expenses are recouped by the couple via gifts. Nonetheless we are still talking about some serious money here – a whole year’s income for most people, and half for those who have invested a great deal already in their education (and might have the student loans to show for it!).

The upside: the “big day” normally leads straight up to the honeymoon, when the couple spends lots of quality time together as married folk for the first time in their lives. That is the way it ought to be. Start out happily and then we all hope to enjoy the rest of our lives together.

Alas, divorces are the reality for many. About 20% of all marriages end within 5 years of the “big day” and 33% are over by the 10th anniversary. (The data you hear quoted as “50% of all marriages end in divorce” means that in all lifetimes of all married people taken together, half of those couples’ marriages will likely end in divorce. Presumably, the other half ends in the death of a spouse.) Remarriages have a worse prognosis. While the marriage itself might have been worth a try, the wedding day expense might hardly seem worth the investment – especially if it ends before the ceremony’s all paid for!

(Before you jump to the conclusion that living together might be better – these relationships are even more unstable: 49% of these are over by year 5, 62% by year 10. You’d save yourself the wedding expense by shacking up, but you don’t necessarily save the relationship. But I digress… let’s stick to discussing the married folk for the moment.)

Married couples start out spending lots of money on the wedding and then spending lots of quality time together on the honeymoon. But what happens afterwards? How much time do we spend on each other once we are settled in our marriages? How much do we “invest” in our marriages?

I haven’t even discussed the negative financial impact a divorce has on each partner of a failed marriage. (Please go to the post “Better Finances for Married Couples” for more on this topic.) To avoid financial ruin as a result of a crisis in the love department, it makes sense to keep investing time and money in the relationship to preserve a relatively higher net worth. Never mind the personal and emotional aspect of having a good marriage… the financial part of the marriage should be motivation enough to keep investing in the relationship!

The smart thing to do, then, if you’re going to marry or live in a marriage-like relationship, is to approach your joint financial future the same way you would other big investments, like retirement. Every month you put money into the retirement account (right?), so you move closer to accumulating a good chunk of money over a very long time. You should do the same with your marriage. Invest a little bit regularly to get tremendous pay-offs later. How about a weekly date night? How about surprising your spouses with their favorite things every now and then, just for the heck of it? (My spouse loves a clean house – you can see the stress just melt off him when it’s spotless. Me? I go for the gooey stuff: hot baths, foot rubs, or just let me fall asleep with my head on your lap while we’re watching TV.)

Invest a little in your partnership over time, and watch your investment grow into a long-term love that pays big financial and emotional dividends. You get to that point by, as vilkri-he says “by pulling on the same end of the rope” instead of pulling against each other. Imagine spending a comfortable retirement with your life partner at the end of all that! What could be better?

These great aunts are enjoying a comfortable retirement as the world economy is falling apart. They deserve it. They had their share of hardship in their early lives. Most of us have experienced very little of such hardships in our lives. Is it our turn to experience hardship?

Regular readers of this blog may know that I have the privilege to have some elderly relatives who enjoy sharing with me their outlook on life. I love talking to these relatives who happen to be in their 80s and 90s. (The drawback to knowing I have the genes for longevity genes is that I have to save a bunch of money for retirement. Chances are that I will also live for a very long time!)

A couple days ago I talked to two Great Aunts of mine who live very close to each other in Europe. They are both wonderful people who have kept up with the times. They are also fortunate enough that they do not need to worry about their financial well-being for at least another 90 years.

Naturally, as we were chatting, our conversation turned to the current economic crisis. My Great Aunts related the current crisis to their own lives. They witnessed some serious hardship, since their childhoods were lived right as World War I ended. Soon afterward, they experienced the bonanza of the 1920, which in turn ended with the Great Depression. As if that was not enough, World War II followed which lead to tremendous destructions all over Europe. It took until the 1950s for their lives to become what we think now as “normal.” By that time my Great Aunts had seen it all – except for the really good times. And they were well into their adult lives then.

What Americans call “The Baby Boom Generation,” and all following generations, have not as a whole experienced the hardship that the generations before us have. Most of us alive in the U.S. and now working are the lucky ones who have enjoyed a more or less peaceful existence in material abundance. But for many of us, that abundance has come to an end, with the turmoil in local and global economies. (Let’s hope even as the economies suffer, a relatively peaceful global existence will be maintained.) As a whole, we will have to tighten our belts for the foreseeable future. But we will hopefully come out of the current crisis with renewed vigor so that we can once again enjoy our (material) lives – even if we must act in ways that are more measured and more responsible than in the recent past.

What did my Great Aunts have to say about my part in all that? They are, of course, very personal with me: they wished me well. They know I need their good wishes because I am young enough that I will have to adjust my expectations a bit, and maybe even for the rest of my life. They know very well that it is a lot harder to face difficult times if you have only experienced easy times. They told me that life now was not so difficult for them because by now they could go from difficult times to easy times and back without a lot of trouble. I hope my Aunt’s wishes for me are realized, and I wish the same ease of transition for you.