Inflation widens married couples’ money lead over their single friends



  • Rapidly rising prices and more than two years of living in a pandemic increase the financial stress on those without pooled assets

It is better, financially, to be married than single, as has almost always been the case. But the money gap between young married couples and singles has widened, thanks to inflation and rising home prices.

The median net worth of married couples 25 to 34 years old was nearly nine times as much as the median net worth of single households in 2019, according to the most recent data from the Federal Reserve Bank of St. Louis. In 2016, married households’ median net worth was four times as much. And now, after a spell of rapid inflation and more than two years of pandemic living, single people are getting left further behind, say economists at the Fed and elsewhere.

“This 25-to-34-year-old age is a time of transition, it’s a time of household formation, and I think it matters whether or not you can pool your financial resources with someone else," said Lowell Ricketts, a data scientist for the Institute for Economic Equity at the St. Louis Fed.

Married people are being tested by inflation, too. It is just that they have a larger, shared cushion, often with two incomes and pooled assets. They hold a greater concentration of wealth and considerably less debt, according to research from the St. Louis Fed.

Having combined assets was particularly helpful over the past decade as many households’ wealth was compounded by rising housing prices and a strong stock market.

As people marry later, the number of sole-person households is growing, which means more single people are tackling multiple financial challenges entirely on their own. Over the past four decades, the number of sole-person households has nearly doubled, according to data from Freddie Mac. And by delaying marriage, many now struggle to access money milestones at the ages previous generations achieved them.

Last year Alyssa Cruz, a 27-year-old library cataloger living in Columbus, Ohio, got a long-awaited raise that helped her build her savings and open her first investment account.

With prices for essentials such as gasoline and groceries going up, she said the progress she made last year feels shaky. These days, she regularly donates plasma when she needs help stretching her budget and shoring up her emergency fund. She can donate as often as twice a week, earning roughly $50 to $60 for each donation.

Bigger assets, such as homeownership, still feel far away.

“If we’re going off what Facebook looks like, everyone is getting married and buying houses," Ms. Cruz said. “I’m stuck where I am, and I’m doing OK, but it’s a renting future."

When it comes to building wealth via homeownership, finding a smaller starter home—once the gateway for single people becoming homeowners—remains especially difficult as prices remain high, say economists. Housing affordability in June 2022 hit its worst level since June 1989, and home prices are up 44% over the past two years, according to data from real-estate brokerage Redfin Corp. With housing prices so high and starter-home inventory so low, more single people are struggling to find affordable houses to buy.

This is where married couples have one of their largest advantages. Applying for a mortgage, these couples can work together to create an attractive application as well as amass the necessary money for a healthy down payment.

Single women face additional hurdles to generating wealth.

The gender wage gap begins to widen as early as three years after college graduation, a Wall Street Journal analysis found. Women also live significantly longer than men, which puts added pressure on them to finance their retirement years solo.

“These are scary times for anyone, but they’re particularly scary times, I think, for the reasons we have cited, for single women," said Jill Gianola, a financial planner and the founder of Gianola Financial Planning.

Ms. Cruz said she is taking steps to earn more money as she prepares to go back to school and earn a master’s degree in data analysis. She said she would like to move closer to her family, so she can spend less money on driving and plane tickets when she visits them.

Gabie Kur-Oliva said she has seen the power of connecting finances in her own marriage. She and her husband, bilingual special-education teacher Pablo Oliva, got married in spring 2020. When the Long Island, N.Y., couple first met, Mr. Oliva was carrying nearly $10,000 of credit-card debt.

“I’ve always thought about the future, but my career wouldn’t let me think beyond the financial struggles I had. Meeting Gabie opened up my vision," Mr. Oliva said.

Together, they worked to pay down his debt. Mrs. Kur-Oliva, who had the money in her savings, paid off his high-interest credit card entirely. They also arranged for Mr. Oliva to pay her back at no interest.

“We called it ‘the wifey bank,’ " she said.

The security and support they provide each other in their relationship has also boosted Mrs. Kur-Oliva’s career in public relations, she said. Without her husband handling household improvements and assisting with child care for their 1-year-old son, she wouldn’t be able to work more hours or take on additional consulting jobs, all of which she attributes to helping her career grow.

The backup is also there should either of them encounter a financial disaster, she said.

Meanwhile, single people will face any potential disaster from health or other issues alone. While emergency savings and other financial preparation can soften the blow, they can’t provide the same support.

“You have a built-in emergency policy with a partner," said Isabel Sawhill, senior fellow in family studies at the Brookings Institution. “You have someone to help bail you out. That is critical."

This story has been published from a wire agency feed without modifications to the text

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