The honeymoon is officially over. The hubby and I have settled into our new married life together and our financial union is still a little confusing to say the least. We have a joint checking account now and we are paying our bills through that account, but it really feels like our expenses have gone up because I never used to see how much the hubby spent. It makes me wonder if marriage would make our costs go up or go down. I asked a few married coworkers this question and all of them said that after they got married they are spending a lot more than before. However, all of these coworkers are men and one of them has a wife that’s still going to school so he has to support her. So I decided to make a comparison of our current expenditures with our former expenditures here and see what would happen.
Here are the areas where we’re saving money:
1. Utilities — The hubby used to pay for all of the utilities at his apartment even though he had a roommate. I shared the utility bills with my roommates but it still came out to be $50 to $70 a month. Currently, our cable tv, water, and garbage are included in the rent so that’s also a big plus. Before we got married the hubby was paying for water and garbage also. I estimate that the utitlies savings would add up to approximately $1500 to $2000 a year just because we now live together.
2. Eating Out — We haven’t been eating out as often, but cooking isn’t as cheap as I thought. The only spare time we have to cook is on the weekends so the hubby tries to make a lot of food that lasts for a few days. Our food bills aren’t significantly lowered because we also hosted a couple dinners during the weekends. Hopefully we will save more in the future by eating out less. I estimate that we should be able to save $1000 to $2000 a year on food.
3. Gas – We’re no longer driving back and forth between our apartments. The hubby is also now ten miles closer to work so he’s saving much more on gas everyday. I am about four miles farther from work but it works out that our total mileage driven is still reduced. Our gas bill for the past month has been very small and I hope it stays that way. Our estimated savings for gas is about $400 to $600 a year.
4. Car Insurance — I wrote about car insurance a couple months ago when the insurance company raised the hubby’s rates. Now that we’re married the new insurance company gave the hubby a discounted six months rate that is about $360 lower! I’m pretty happy about that and our next insurance rate reduction will be the 25 year old discount. That’s coming up soon for the hubby and we should be able to shave some more dollars off.
So far, it sounds like marriage is great and we’re saving thousands of dollars, but here are the areas where we’re spending more:
1. Taxes — The marriage penalty is going to hit us this year and I’m not quite sure how much more we would be paying. If we weren’t married we would both be in the 25% marginal tax bracket since we both contribute a fairly good amount of our salaries to our 401ks. However marriage pushes us to the next bracket. The extra taxes we pay will probably wipe out all the savings we receive from living together. I’m not quite sure what the point of the marriage penalty is besides keeping families living on one income. From my point of view it seems to be such an anti-marriage and anti-women tax policy. However, one thing that could mitigate our taxes is our charitable contributions. It is possible that we may still remain in the 25% tax bracket, but it’s pretty unlikely.
2. Rent — Originally we both had roommates that shared the rent. Now we are roommates with each other so our rent seems like such a large number. In actuality it’s only $160 more a month than our combined rents previously. This basically negates the utilities savings.
We don’t have kids yet, but many people have already told me that children will increase our expenditures by quite a bit. So, my current analysis of our expenses is still sort of inconclusive because we are saving quite a bit, and yet it seems like we’re spending more. So to my single readers, do you think that you’ll save more money after you get married? And to my married readers, do you spend more or less now that you’re married? Where are the savings from and where is the extra money going? I haven’t really asked a woman this question yet because most of my coworkers and friends are men and pretty much all of them think that women are expensive. So, feel free to give me your input!
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15 comments ↓
When I was single I was always envious of couple who could share the bills/rent etc. Now that I’m married I realize that financially I was far better off when I was single.
Regardless, I really enjoy being a husband and a dad so I wouldn’t have it any other way.
Mike
a good analysis. with kids, difinantly, it will be much more expenses.
Well, I’m a stay-at-home-mom, so my situation is different than yours, but in SOME ways, costs have gone down, but in other ways, they’ve gone up.
For example…we’re only paying one version of bills, like you said, but also like you said, rent tends to be higher (because we have a daughter). Also, having a child DOES make it more expensive – conservative estimates say that if you only provide the basics (with public school) that you’ll spend near $1 million by the time the baby reaches 18, and THEN many parents pay for college as well. Of course, it doesn’t SEEM like that (except for diaper prices *sigh*) but it adds up in the long run.
Another thing I’ve noticed that is different is that when you share with your spouse (someone you actively TRY to get on with), decisions are made mutually, whereas when I had a roommate (female), we often disagreed on certain bills (I thought cable internet was necessary, but she wanted dial-up AND the ability to complain when I was researching on the internet and she wanted to use the telephone).
All-in-all, though, I’d say that aside from rent (where we live, EVERYTHING is high-rent), we don’t spend much more combined than what each of us spent separately when dating.
The marriage penalty tax was removed a couple years ago. The new tax tables reflect that change, thank goodness!
hi Loretta,
Actually the marriage penalty wasn’t removed. It was slightly adjusted so that it isn’t as bad as before.
For example, if two people had incomes of $77,000 a year then they’re both in the 25% marginal tax bracket. However, a married couple would be in the 28% marginal tax bracket if their combined income is $128,500. $77,000 * 2 = $154,000 so there is still a marriage penalty.
Hi Jesse,
Thanks for the analysis! I do agree that with roommates sometimes shared expenses are sort of odd. For example, myself and another roommate were not at home very much, but the third roommate was always home and she liked to turn up the heat to 90 degrees. So a lot of the electricity/gas bill is attributed to the third roommate but we still paid the same share of the bill. One of my ex-roommates is a flight attendant so she was home about 5 days out of the month and so she really paid for a lot of expenses that she didn’t use. It’s different to share with a husband because he is a permanent roommate and part of the family.
Actually, I just ran the numbers according to the 2006 IRS tax tables:
single at $77,000 pays $15,899, or 20.6% in taxes
married at $154,000 pays $32,524 ($24,040 + 28% over 128,700) which is 21.1% in taxes
At lower incomes, married pay less than single in some cases. I took $30,000 for single: pays $4126 in taxes, whereas married $60,000 pays $8249…$3 less than $4126 x 2.
It obviously makes a difference where on the income level you are with the tax tables. However, the “marriage penalty tax” is non-existant at the median household income levels (yes, it used to be there a few years ago). It is still around, to an extent, at higher incomes, though, even at the incomes you quote it is only less than .5%.
Thanks for your informative blog and for letting me comment. It is through a free-flow of ideas that we all can meet our financial goal.
Hey Loretta! Thank you for your calculations. Actually, as far as I know the current marriage penalty adjustment will only last until 2011. If the government does not permanently repeal the marriage penalty then it will come back full force. See this link:
http://marriage.about.com/od/finances/a/marriagepenalty.htm
Additionally, this year the AMT exemption for married couples has reverted back to the $45,000 so a lot more married couples may be hit with the AMT. So I’m not sure if I will have to pay it with the hubby or not.
I didn’t even know there was this so called “marriage penalty”…what would I do without your blog, Xin?!
Paying only 1 rent was the biggest savings. Combining accounts and sharing everything was the hardest thing to get use to when married.
My husband is VERY expensive to feed — he still eats like a teenage boy at almost 40 — it doesn’t help that he likes very expensive beer and wine. I hardly spent anything on food and alcohol when I was single.
We have kids now, and kids are not that expensive in theory, but even though we are not big on the “buying a bunch of crap” mentality, we do want to live in a safe neighborhood, in a good school district and in a decent house they can feel good about growing up in. And, oh my, that alone is spendy!
Hi Kyle!
Our rent ended up increasing because the landlord for my old condo was my roommate’s friend for 35 years and he never increased rent for a very long time. He increased my rent by $25 in 2 years, and all the other landlords in the county were increasing rents 10 to 20% a year. So when we found a place together it ended up being a little more expensive, but it’s still not so bad.
Hi Staci,
Yeah, boys do eat and drink a lot. The “safe neighborhood” & “good school district” are things I am worried about when we have kids. Right now we don’t really care because we are not going to school anymore so we can just live wherever we want. However, I am very acutely aware that neighborhoods with good schools in the Bay Area carry a crazy premium.
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