OBG: b&b38 Is it More Expensive to be Single or in a Relationship?

In this Oldie but Goodie Pam and Dyalekt weigh the pros and cons of being single vs being in a relationship on your finances.

Pamela: Today, we’re gonna talk about whether or not it’s more expensive to be single or to be in a relationship.

Pamela: It’s interesting, when I was researching this it was hard to find statistics on it, no one’s really done any studies. We did find statistics on single versus married but we also did some digging on single versus being in a relationship, single versus single with roommates, single living alone being in a relationship but not living together, and being in a relationship and living together.

Pamela:  Relationship or single. What is cheaper? Let’s find out. Well, I mean, we’re curious. You know, a lot of people say, oh being singles so expensive you don’t get to split the bills. You don’t get to split the rent like you don’t get to split the food and some people say being in a relationship is more expensive. So we did some research on it. Probably the distinction that is most significant is being single versus being married and that’s when the numbers get a little more concrete. 

Pamela: There’s some obvious pros and cons to being single versus living alone. One of the interesting statistics that I found, is for housing, single women spend 39.8% of their income on housing. Single men spend 30.3% of their income on housing and couples spend 23.9% of their annual income on housing.  The interesting thing though is that the difference between single men and single women is it might be because of the wage gap. It’s not like that single men are living in smaller places, its that they’re probably making more money.

Pamela: Single, living with the roommate people in general are more willing to compromise their living situation in terms of it doesn’t have to be perfect. It doesn’t have to be like not unclean, but just like not like brand new or unusual or whatever. People are willing to have like shabbier furniture, it feels way less permanent when you have a roommate.

Dyalekt: Really the more roommates you have the less you can even keep track of who ought to be clean and what right and you sort of just be like as long as I was I can fight them off. I lived in a place for more than a year than only had working a hot plate. I boiled so many things. I was single but no I did not save money with the hot plague because you know what I did a lot?

Pamela: You ate out, didn’t you? Yeah I can see that? 

Pamela: The other obvious things about single and living alone, you’re not splitting bills, you’re not splitting rent and in Dyalekt’s case you you you might be spending more going out. If you’re a woman living alone, you know and you’re going on dates, are you are you going Dutch, you know, there’s a lot of questions to go into this. Do you spend more money on personal care? Do single people cook less or do they cook more? 

Pamela: There are studies that have shown that single people do spend more money on entertainment, eating out, clothing and gym memberships. So single people do tend to spend more money in those categories and those are categories are where a lot of disposable income for anyone usually goes shopping, entertainment, eating out.

Pamela: We found a study, actually in Britain. I don’t know if it’s necessarily an indication of how we spend in America, but they did surveys and they found that 68% of singles think that being in a relationship would make them poorer and 45% of people in a relationship agree that being in a relationship has made them poorer. What they found was on average, a single person is spending less on gifts, they’re spending less on dates, they’re saving more money.

Dyalekt:  Right because there’s the relationship where the couple is very separate in their finances, but then there’s the ones where the finances are very tied together and it’s coming out of the same pot.

Pamela: What about single living with roommates? Now does that even the playing field in a lot of ways because you cut down on rent and splitting bills, especially if you’re not just living with one other person?

Pamela: That is the risk of living with roommates and the other part of it is too if you’re on the lease and they’re not, or if you are on the utility bill and they’re not  I’ve seen roommates situations, I’ve had clients who are still waiting for three or four months worth of utilities from roommates because it’s not something people like keeping track of. I mean that kind of stuff happens all the time, and so the thing with living with roommates, especially if you’re not friends with them, is that there is that risk. 

Pamela: I can see both sides for sure because it’s way easier to let a friend’s thing slide than some stranger, that just lives with you so I feel you that’s very possible. Now what about if you’re in a relationship and you’re not living together? Is this just like being single? Is it being single but now you have to go on dates regularly with this person and maybe buy them presents? I know we see this a lot in New York. A lot of couples, they’re spending time at each other’s houses all the time and each other’s places, that they eventually are just like, we should just live together this makes so much sense. 

Dyalekt: You know, well it deals a lot with demographics and location. In terms of your clients that you deal with do you find a lot of the ones who are in relationships, do they seem to be spending more?

Pamela: That’s a great question actually. I feel like people who are single actually spend more money. People who are single shop more for sure, I’ve seen just anecdotally from clients, from budgets, people who are single shop more. They tend to have gym memberships, it’s all of the all the stuff that I mentioned.

Dyalekt: You’re more likely to spend money on an indulgence, a hobby, a cultural passion any of these things anything along that spectrum when you’re by yourself. Part of it is because you need that on a companionship level its a way to be around stuff that makes you feel good.

Pamela: The next one we’re gonna go into is in a relationship living together. Okay if you’re in a relationship and living together is this the cheapest way to go before you get married? You can split bills, you can buy groceries together, you can cook together, you can have more nights in you split rent you split all kinds of things, so is it less expensive to live together? In that case a lot of people who have roommates and then end up living with their significant other, especially New York, end up upgrading so to speak. It feels more permanent when you move together with a significant other and so you upgrade your apartment. You maybe get a one-bedroom and you tend to buy new furniture when you’re moving in with somebody. Does that mean that it’s cheaper, together are your rents cheaper? I know that in our situation,  our rents would not be cheaper if we lived together. We all know this story in New York City, there’s a lot of couples who just end up sliding into living together because it makes so much financial sense.

Pamela: Moving in together is probably cheaper at the beginning. There’s that spike of the move and all of that stuff, but then you cut your expenses in half in a lot of ways. What this article found was that people who lived together didn’t really think about whether they wanted to spend the rest of their lives with this person, but they just kept rolling with it and it ended up being a situation where they got married because it felt like it was the next logical step and they realized after they got married that they weren’t actually in love with each other. And so that is how a lot of these cohabitation situations end when you go into it by sliding into it.

Pamela: So the breakup, whether or not you get married, the breakup is financially devastating. So if you have to get out of living relationship situation, it can be just as costly financially as emotionally, because unwinding from that is so much work and so much money.

Pamela: So that is that is one of the downsides of moving in together for financial reasons, because it can be cheaper but if it doesn’t make sense for the relationship then in the long run, it’s not going to be cheaper. It’s going to cost you more emotionally and financially in a lot of ways and if this happens to you multiple times, then financially it just didn’t make any sense to do in the first place versus sorting your feelings out first.

Dyalekt: It’s all good to move in together yeah, it’s all good to have finances as one of your reasons right, but if finances are one of your primary reasons,  then it is likely that that will be financially costly for you. If you move in with someone with the primary motivating factor being saving money, you are doing something that is high risk.

Pamela: The last part is, is being married less expensive than being single? One of the biggest things was the tax benefits and housing benefits and the social security healthcare cost benefits that you get by being able to get married and tying your finances together. Where does it start to get cheaper? One of the biggest things is income tax. There was an article in the Atlantic where they did a case study on a single woman earning $80,000 versus a married woman earning $80,000. They calculated that a single women earning $80,000 a year paid about $16,000 in taxes and her married counterpart paid about $12,000 in taxes, so it’s a $4,000 savings.

Pamela: The other thing is social security benefits for married couples are fantastic. So married couples can receive up to 50% of their spouses benefit as soon as their spouse starts taking it. That means if you are married to somebody who’s taking a social security benefit and they get $2,000 you can start to get $1,000 a month, but you have to be married.

Pamela: You know what else is crazy though? You can benefit from this even if you got divorced but you were married for 10 years. So you can claim spousal benefits if you were married for 10 years even though you got divorced.

Pamela: That’s the other crazy thing is you can actually claim spousal social security and then wait to claim your social security until it’s at the max social security as a worker. So if you’re 62 and your spouse has taken social security you take spousal social security from 62 to 70 and then you start taking your worker social security at 70 when it’s at its peak benefit amount. 

Pamela: According to the studies that have been done, couples spend about 6.9% of their annual income on health care. Single men spend about 3.9%. Nobody knows why it’s so low and single women spend 7.9% on health care. Men don’t go to the doctor y’all. What is up with that? So the difference between a married woman and a single woman who makes $80,000 over their lifetime, the single woman is paying a million dollars more than the married woman in taxes, social security, health care costs, housing and retirement benefits.

Pamela: Basic lesson is, get married and stay married for 10 years and then do what you want. That’s the cheapest way to go. 

Dyalekt: If our answer is get married then that means it has been a lot of significance in terms of marriage equality. It’s not a frivolous thing, it’s not a personal desire thing for folks to get married. If the data is showing that married couples are able to save more money as well as able to provide more social type of benefits in terms of being able to see them when they’re sick and power of attorney and all that type of stuff. That just adds to the gravity of the situation of being able to allow folks to get married. 

Pamela: Yeah, definitely in 2009 actually, the New York Times wrote an article making a case for gay marriage on that financial tip of, you saved so much more money being married versus being single.