What you should consider before getting engaged in this economy
Inflation has been taking the world by storm. As a result, our buying power has significantly decreased as the cost of goods has risen. Due to these rising costs, many may delay life altering choices or milestones in order to avoid some of the impacts of inflation.
When it comes to pursuing marriage, there are a variety of things one should consider beforehand to help make a marriage an asset in this turbulent economy.
Potential Tax Advantage of Marriage
At one time, getting married was a significant tax disadvantage, but laws have been altered to help offset this potential disadvantage. If you are a single person and make over $539,900, you are taxed at 37%. In comparison, if you are married, to be taxed at that same percentage, your combined household total would have to be $647,850.
Due to this, there is a significant tax advantage for some couples when they get married, especially if one spouse is a high income earner. The tax bracket that a high earner is in is more likely to go down, and the amount of taxes they are expected to pay decreases.
Marriage Helps to Consolidate Costs
When getting married, think about all of the different expenses you have. Depending on if you are already cohabiting or not, many of these costs can be reduced or sometimes eliminated. Oftentimes, there are two individual housing/rent payments. When you reduce this down to one payment, you can reduce one of your most significant living costs.
Additionally, if both of the people in the relationship are homeowners, they will often choose to move into one home. If you were to sell one home as a single individual, $250,000 made from that sale would be completely tax free.
In contrast, when you are married, that number doubles to $500,000 of tax-free money! With this information in hand, and possible equity in your home, consider postponing the sale of your home until after you’re married.
How To Make Money Work In Your Marriage
One of the most common reasons for divorce is money issues. In order to help avoid this pitfall, it is important to develop good monetary practices and proper communication regarding money from the beginning stages of your marriage.
Although many individuals prefer to keep separate accounts, the disadvantage is deciding how to properly allocate expenses and payments. This can cause some things to slip through the cracks. Also, some people become hyperfocused on perhaps one partner spending too much money, and another resenting that individual for improper money practices.
When everyone is on the same page, and a budget is formulated and agreed upon, some of these hiccups or frustrations can be limited. Additionally, when creating a budget, it is important to set aside a time to discuss and review it on a consistent basis. When this is done, there is accountability to each other, and a decreased likelihood of overextending your resources.
How to Save Money on Your Big Day
A way to help prepare for and practice proper budgeting in your marriage is to properly budget for the big wedding day. There are four things you should consider to help you save money on your wedding.
One, plan on getting married in the off-season, when wedding venues are less expensive. Two, consider lab created diamond rings. Not only are they less expensive and conflict free, but they are just as beautiful and have less flaws. Third, when planning your flowers and food, think of what is in season. When you do this, you are not only cutting down on your costs, but also cutting down on your emissions, making your wedding more environmentally friendly. Last, try to borrow or rent whenever possible for your dresses, suits, decor, and other high-ticket items.
Final Thoughts
Although the economy is scary right now, don’t let it dictate your life. It’s still important to make decisions, move forward, and embrace new experiences and challenges. Marriage is one of those decisions that is a new adventure, and when you begin to realize all the advantages marriage has to offer, you can move forward with confidence.