Marriage – Financial Win, Lose or Draw?

As recent as a couple of centuries ago, marriage was considered a simple economic transaction. Dowry was paid and the bride from then on belonged to the groom, who took care of her. Nowadays marriage in our society is a loving consensual union between two people; however, economic implications of tying the knot still rustle around in the background.

Here are the financial pros and cons of which any potential spouse must be aware:

Finance For Couples Pro #1: Joint salaries means higher earnings at the same time that shared expenses go down.

Assuming that both you and your partner are earning, marrying each other should improve your chances of wealth-building. Consequently, a married-couple household can accumulate wealth more quickly than a single-person household.

A higher combined income can also help you and your partner qualify more easily for a mortgage, car loan or business loan.

Finance For Couples Con #1: Your dream wedding can be expensive.

Of course, a fancy wedding ceremony is not essential. Nonetheless, many Singaporeans opt to save up and spend big for their dream wedding. A civil wedding with the appropriate license from the Registry of Marriage (ROM) can save you and your groom a lot of money.

The combined costs of your coveted wedding gown, tux, engagement rings, wedding bands, flowers, wedding ceremony, photo shoot, reception, banquet and honeymoon can really set you back financially. The SG Young Investment blog estimates the cost of a typical wedding and honeymoon in Singapore to be around SGD 43,000 to SGD 56,000, while the Dollars and Sense website puts the cost at somewhere between SGD 44,000 to SGD 90,000!

Related: Planning for Your Wedding Budget in Singapore

Finance For Couples Pro #2: Marriage may encourage financial consciousness.

If you are the only one involved and affected by your financial decisions, it is much easier to slack off and ignore your finances. However, when there are two of you, you and your partner may each feel a bit more pressure to be financially conscious. An irresponsible financial move will adversely affect not only you, but also the person you love most.

As such, marriage can effectively encourage financial accountability. In the best of all possible worlds, you would want to take care of your spouse – and that includes his financial well-being.

Finance For Couples Con #2: Marriage may promote financial stress.

While marrying can encourage financial accountability, even a good partnership can elicit financial stress. This may be especially true if one of you is a saver and the other is a spender. If you do not set realistic spending boundaries from the very start of your marriage, differences in financial behaviour can lead to discord, disagreements and even divorce. As such, financial planning is crucial to maintaining harmony in your marriage.

Finance For Couples Pro #3: You become eligible for a variety of federal benefits.

In Singapore, married couples may be entitled to quite a number of benefits through the Marriage and Parenthood Package. According to the National Population and Talent Division, the government prioritises the encouragement of marriage and parenthood through a broad range of measures from housing schemes to baby bonus packets and childcare options.

The Housing and Development Board (HDB), for example, has increased the supply of Built-to-Order or BTO flats in the country. Married couples can be first in line for these HDB BTOs and Sale of Balance flats They can rent HDB flats at discounted rates while waiting for their own properties to be ready for occupancy. There are also various CPF housing grants available, such as the Family Grant and Additional CPF Housing Grant, that married couples can apply for so as to more easily afford public housing.

If you are married, you are also allowed to claim several relief positions to reduce your taxes. You can claim a spouse relief of up to SGD 2,000 provided that your partner’s annual income did not exceed SGD 4,000 in the previous year. You can also claim a handicapped spouse relief of up to SGD 5,500.

Finance For Couples Pro #4: You can take advantage of spousal company benefits.

A lot of employers in Singapore will allow your husband to participate in health coverage through your existing plan. This can be especially useful if your employer-sponsored health insurance is better than his, or if your husband is freelancing or unemployed. There are also other benefits like health management and employee discounts that your partner may access through your company.

Read: 5 Money Mistakes You Should Avoid in Your Marriage

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).