Dec 30, 2024
Financial stability and compatibility are essential ingredients for any couple hoping to tie the knot in the future. Unfortunately, Dawn, 48, and Richard, 43, have struggled on both fronts.
On a recent episode of the Money for Couples show, hosted by Ramit Sethi, the New York-based couple describes how “past financial trauma” was delaying their plans to get married, as Richard’s bankruptcy from a previous marriage left him financially incapable of building a new life with Dawn. “We stress about money constantly and it has caused us to almost break up,” she told Sethi.
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Their struggles are increasingly common as many couples across America face similar financial constraints.
Financial prerequisites for marriage
Three in four young adults believe delaying marriage gives them the room to improve their personal finances, while 91% of young adults believe financial independence is a prerequisite for marriage, according to the Institute for Family Studies.
Being in debt is also a barrier for many couples looking to take the next step in their relationship. Three in five Americans said they have delayed getting married to avoid inheriting their partner’s debt, while 54% believe a partner’s debt is a valid reason to consider divorce, according to a survey by National Debt Relief.
Simply put, most people are not keen on making a lifelong commitment and combining their finances with someone who may weaken their financial position and make it difficult to raise a family.
Fortunately, debt isn’t a major concern for Dawn and Richard. They have only $14,895 in combined debt, far lower than the average American household debt load of $101,915, according to Debt.org. Instead, the couple is struggling to invest their money wisely to secure their forthcoming retirement phase of life.
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Focused on bills, not investments
Richard told Sethi that his monthly gross income of $3,250 was insufficient to allow him to save or invest anything. Meanwhile, Dawn, who earns significantly more, says she’s too focused on expenses to think about investing for the future. “Growing up, it was always about the bills, it was never about Investments,” she told Sethi.
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As a result of their combined neglect, the couple has managed to accumulate only $58,484 in savings and just $24,985 in investments. For a couple in their 40s, Sethi describes the situation as “troubling,” but not surprising.
“Most people have never heard the word ‘investment’ in their household, ever. Their parents don't talk about it because they don't even know what investments are,” he says.
Indeed, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings, according to data from the U.S. Census Bureau. Meanwhile, only 48% of Americans understand basic financial principles, according to the 2024 TIAA Institute-GFLEC Personal Finance Index. The report also found that only 47% of Gen X Americans understood concepts related to investing money.
This lack of financial literacy and having a solid investment strategy is creating a retirement crisis for many Americans. To avoid this, people like Dawn and Richard need to start making “aggressive, sweeping changes” according to Sethi. This includes boosting income with side hustles and more hours, additional savings every month, utilizing corporate benefits and tax-sheltered investment accounts, as well as slashing their budget for frivolous spending every month.
Perhaps the best way to get started is to reach out to an expert investment advisor or financial planner who can walk you through the complexities of creating a robust nest egg for retirement.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
Managing Money • Mar 30
