The Relationship Between Money and Marriage

I love scotch; she hates it.

There are many things my wife and I don't agree on, but money isn't one of them. We are intentional spenders, buying only what mutually aligns with our needs or values. For instance, disinterested in paying for the trappings of an ostentatious wedding, we tied the knot at New York's City Hall; our reception was watching our first son play at a public playground in the East Village on a warm fall afternoon.

We've been happily together for 16 years, which makes me wonder: Does love make the financial side of marriage work, or is it the other way around?

The most important decision you'll ever make

Warren Buffett's financial wealth is only rivaled by his wealth of wisdom. Rarely does a day pass without someone in the finance industry quoting the Oracle of Omaha on social media. Heck, Warren Buffett's influence is so great, people have essentially made careers out of quoting him.

Yet, with all of his knowledge on investing and business, he says the most important decision a person can make has nothing to do with investing and business. At the 2009 Berkshire Hathaway annual meeting, he said:

“Marry the right person. I’m serious about that. It will make more difference in your life. It will change your aspirations, all kinds of things.”

You don't make it to Buffett's level of stature with a track record of being wrong often, and researchers seem to agree with him on this point. Studies show that marrying the right person can significantly improve our health, career success and wealth.

Marriage will change you in many ways. By definition, marriage -- joining two into one -- is disruptive. Often, for the better. It is about pursuing new things while sacrificing others. A major contributor to that disruption though is money.

Although we've long moved on from the ancient practice of marrying for the sake of status, money is an irrevocable part of marriage, at times, for better, and at times, for worse. Here is what research has uncovered about the relationship between money and marriage.

The relationship between money and marriage

Married people are wealthier than single people.

A 2005 study tracking people in their 20s, 30s and 40s found that married people experienced a 77% increase in wealth over single people. In fact, married individuals in the study saw their wealth rise 16% for each year of marriage. This makes sense considering married couples can combine incomes and share expenses.

However, it may not tell the whole story. You can't expect to tie the knot and just start watching the money roll right in. More affluent people are more likelier to get married in the first place. A report by the American Enterprise Institute details the wide gap in marriage rates by income. About a quarter of “poor” adults aged 18 to 55 are currently married, compared to 56% of middle- and upper-class adults.

Wealthier couples are happier.

A study published in the Journal of Happiness Studies suggests that married individuals are generally happier than the unmarried.

What about happiness among married couples?

Turns out, money is one of the biggest contributors to marital happiness. That's what University of Maryland sociology professor Philip Cohen found after analyzing data from the General Social Survey, a long-running study of Americans’ views and behaviors.

The survey shows a class divide when it comes to marital happiness. Of upper-class married couples, 70% said they are "very happy" while only 53% of lower-income couples could say the same.

Although interesting, this is far from remarkable considering richer couples don't have to stress over paying bills and have the economic means to splurge on things known to boost happiness, such as take vacations and attend entertainment events.

How married couples spend money matters.

It has become personal finance gospel that spending money on experiences makes us happier than spending money on material things. The same is true of married couples. As this Marketwatch article exploring happiness among married couples states: "Partners spending money on a shared experiences like vacations or going out to dinner, are more likely to be very satisfied with life than those splurging more on less exciting things like groceries, insurance and cell phones."

Money issues ruin relationships.

For many couples, the vow to stay together "for richer, for poorer" is a fairy tale. Money is the leading cause of stress in relationships, says one SunTrust survey.

According to the Institute for Divorce Financial Analysis, money issues are responsible for 22% of all divorces, making it the third leading cause. Unfortunately, divorce isn't even the worst of it. Financial stress has also been linked to domestic violence.

Some people would even rather have their partner sneak around with another person than sneak around with a hidden credit card. In a survey from CreditCards.com, about 31% of people said keeping credit cards and other accounts from a partner is worse than physical infidelity.

Getting married can make you more successful.

To Buffett's point, research suggests that marrying the right spouse can positively impact your odds of personal and occupational success.

A Carnegie Mellon University study of 163 married couples indicates that people with supportive spouses were more likely to pursue greater opportunities in life, and from that, experience more personal growth.

In another study, from Washington University in St. Louis, researchers show people with a conscientious spouse saw their salaries rise by $4,000 per year and were more likely to get a promotion.

While this research is a testament to the potential advantages of marriage, for us married folks, it should also serve as a call to action to be a more supportive partner. Just take a minute to think of the difference you can make in the life of the person you love.

Divorce is very costly.

Now that we know what can happen when you choose the right one, what about when you choose the wrong one? Well, on top of the emotional trauma, you could experience an equal level of financial stress.

In the same 2005 study referenced above, divorcees saw their wealth decline by an average of 77%! And, according to a survey by Bankrate, the average cost of a divorce in the U.S. was about $15,000 per person.

With those costs, "death do us part" may be a better deal.

Kidding aside, two people who are extremely unhappy in a marriage have little to gain by staying together. The high consequences of a failed marriage though can help explain why so many people today wait to marry or choose not to marry at all.

What's love -- or money -- got to do with it?

She loves working on the house; I hate it.

I don't know if we have a perfect marriage. But I do know that we have a marriage that is good enough to keep trying to perfect it. I think that's the secret to a happy marriage. Yet, considering the strong relationship between money and marriage, perhaps the secret to a happy marriage is money.

Let's consult some people with more experience.

John and Charlotte Henderson, at one time the world's oldest living couple, said the secret to a happy marriage of more than 80 years was to "live life in moderation." Ralph and Dorothy Kohler, meanwhile, said the secret to reaching 86 years of marriage was by doing everything -- including compromise -- together.

Maybe marrying the right person, as Buffett suggests, is really just a matter of luck. It could be the same kind of luck Buffett attributed to his own success by saying he and Charlie Munger won the "ovarian lottery."

After all, trying to find "the one" may be highly unrealistic, if not impossible. As Lauren Groff writes in Fates and Furies:

“Paradox of marriage: you can never know someone entirely; you do know someone entirely.”

A perfect marriage could mean accepting your partner's perceived imperfections while recognizing your own. Taking a clinical approach in finding a mate -- that is, judging each suitor based on a set of predefined qualifications -- will likely set yourself up for failure.

In his book, The All-or-Nothing Marriage, psychologist Eli Finkel says that modern marriage, with the high expectation that it should provide everything from physiological fulfillment to love to financial security to self-actualization, runs the risk of "suffocation." Most people cannot be all things, all the time, to someone else.

Couples who can meet all those expectations for each other indeed have very happy marriages. But it takes work.

One technique Finkel suggests is to frame the actions of your spouse in a more positive light. For example, instead thinking your spouse is always late (like my spouse!), assume that it isn't on purpose and consider the unexpected events that prevented him or her from arriving on time. Another option is to adopt a growth mindset. That is, view compatibility as something that is nurtured rather than is a fixed entity. This helps couples navigate and grow from marital conflicts.

Finkel also takes a page from Investing 101 by recommending married individuals to diversify their social networks, much like diversifying your portfolio. Look to other people and outlets to meet your needs rather than place sole responsibility on your spouse. In other words, don't put all your eggs in one basket.

Choosing someone based on their ability to maximize certain qualities like financial security or status will not guarantee a happy marriage. In that sense, money, though big, is just one of many things that can influence the quality of a marriage.

Money is an extension of what you love and value. It's a means to an end. If you focus only on money, you won't receive lasting gratification from anything. Not your career or your reputation -- and certainly not your marriage.

After all, a bank account won't be there to hold your hand on your death bed.