Love The Single Life? It's Actually Costing You Money

If you’re one of the millions of singletons out there, there’s a good chance you dealt with Valentine’s Day last month in one of the following two ways –

1) Got steaming drunk and/or went out with other single friends

2) Found a place to hide from obnoxious friends/co-workers/Facebook statuses etc until the whole thing was over.

However, financial analysts and commentators are increasingly asking whether being single has a negative impact beyond a not so pleasant February 14th. This has been prompted, in part, in the UK by the release of a railcard that allows ‘couples’ (the small print explicitly states that any two people can buddy up to take advantage of the scheme, but it’s a bit of a stretch to imagine it being used by a pair that aren’t romantically linked) to get a third off their fares when travelling by train.

This isn’t the first deal that implicitly discriminates against singles – take, for example, buy one get one free deals at restaurants, movie theatres and supermarkets. Since they rarely offer a half price alternative for individuals, such offers effectively put singles at a disadvantage…unless they have a big appetite or fancy having an extra seat for their coat.

Many hotels charge a hefty maintenance supplement for solo travellers, arguing that maintaining a room occupied by one person costs just as much as one occupied by multiple people. That might seem a little strange, given that it’s difficult to imagine a professional businessman who’s out at conferences all day making more of a mess than a couple having a weekend away to spice up their marriage. Vacation home rental companies and the like also tend to quote prices ‘per person, per night’ – those travelling on their own, by default, wind up paying far more than the advertised price.

Of course, this doesn’t just apply to vacation rentals. If you’re part of a couple, the price of long term renting and the purchase of property are effectively cut in half. The same is also true of utility bills, cable, internet etc. It probably reduces stress if both you and your partner are working, because it’s likely that if things get tough, or if you’re made redundant, your partner will be there help you out with bills and the rent.

While many husbands complain about their wives nagging them about money (and vice versa!), it actually results in them being better off in the long run – a recent study found that 85% of married Americans are already saving for their retirement, compared with 67% of singles in the same age group.

Most of the above is incidental to one’s relationship status – it hasn’t been engineered that way, it’s just the way things are. However, there are some cases in which singletons are openly discriminated against. The price of car insurance, for example, is known to drop when those in a relationship tie the knot. Many gyms also offer a rate for couples that’s much lower than two individual memberships.

The debate really heats up when you start talking about marital status in relationship to rates of taxation. The marriage penalty in the US refers to a higher rate of tax paid by some married couples that would not apply if filed by two identical single people. However, married couples with only one earner actually benefit from filing jointly. Being part of a couple also raises the inheritance tax threshold, which can potentially have a huge impact on how much of your inheritance the taxman is able to get his hands on. In countries all over the world there are countless other tax breaks, some already in place and some still in the pipeline for the future, available only to married couples.

It’s difficult to figure out exactly how much better off one half of an average couple is compared to an average single, but UK-based price comparison service uSwitch attempted to do just that in 2010. They conducted a survey that suggested an annual premium of just under £5,000 (close to $7,400) for being single, based on the costs associated with a mortgage, vacation, insurance, bills etc. This means that someone who’s single for their whole life can expect to fork out an additional £250,000 ($415,000) compared with someone who gets married when they’re 25.

So, should you run out and get married to the next person you meet? No, but hopefully that goes without saying! While there is clearly quite a range of financial advantages associated with being married, for some the freedom and independence (or even just keeping your own name!) that comes with single life is worth paying for…not to mention the fact that, especially when alimony and child support are involved, the cost of divorce can be astronomical if you choose to settle down with the wrong person. Still, with all the benefits that come with being part of a married couple, it’s not inconceivable to imagine more and more roommates or best friends partnering up and getting married to take advantage of them.

One thing’s for sure – there’s a huge number of couples out there who can disregard the second half of the vow ‘for richer or for poorer’ and look forward to being more well off as one of the benefits of married life. If nothing else, that ought to sugar the pill of wedding expenses and, given that the average wedding now costs over $30,000, that pill needs all the sugaring it can get!

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