Single people buy their own china. It’s one of the financial realities of life as a single person-no bridal registry. Of course, marriage is about far more than new bath towels and small appliances. When two people say “I do,” all sorts of good things can happen. Studies show that married people are healthier, happier, and tend to be better off financially. “Marriage increases African American wealth by about 50% over single respondents, and each year of marriage pushes wealth up by an additional 4%,” says Jay Zagorsky, author of Marriage and Divorce’s Impact on Wealth, a study released by the Center for Human Resource Research at Ohio State University.
Indeed, the proof of the financial implications of marriage is simple mathematics. Studies show that African American men who are married make more money and are seen as more responsible and dedicated to their jobs, says Nisa Islam Muhammad, executive director of the Washington, D.C.-based Wedded Bliss Foundation, a national initiative to promote marriage in the black community. She says that the children of married couples tend to do better financially as well, creating a legacy of wealth. “Most of the black students that go to Ivy League [or other] elite college and universities come from two-parent families,” Islam Muhammad says.
In fact, income figures raise eyebrows. “Statistics show family incomes of black single parents grew when they married,” says Clarence Shuler, president and CEO of Building Lasting Relationships, a nonprofit based in Colorado Springs, Colorado. And this financial benefit stems from more than consolidating monthly expenses to free up more money to save. For instance, when one spouse makes significantly more than the other, there is a substantial tax savings for filing jointly. In terms of estate planning, many states allow some or all of the assets of one spouse to pass to the other without a will and without a tax consequence.
It’s enough to make you want to take a walk down the aisle. The potential for economic advantage has given rise to programs
targeted to couples-some specifically for African Americans-to strengthen families on all levels. Because financial matters are major contributors to divorce there’s momentum for
programs with a special interest in finances. You can find,
among others, nonprofits, faith-based organizations, and government-sponsored programs that can guide a family’s path toward prosperity.
What’s more, spouses are automatically the beneficiary of each other’s retirement accounts unless otherwise stated, says Ginita Wall, a certified financial planner in San Diego. Couples also benefit from additional flexibility because they can transfer unlimited amounts of funds and assets to each other without having to file gift tax returns, unlike unmarried couples who make transfers of more than $12,000 a year.
Time to open an account?
“Whenever I heard about programs for first-time homebuyers or saw anyone getting assistance for home renovations, it seemed to be someone who was low-income,” says Capucine Scott Carrington. “We are in the middle; we didn’t have enough money to purchase a house but made too much money to get help.”
But Capucine, 31, found that doing some additional digging paid off. Last September, she and husband Gary, 39, moved into a $200,000, two-bedroom, one-bath condo in Washington, D.C., after participating in the Marriage Development Account program.
Their homeownership plans began a year earlier when they _relocated from North Carolina. Although Gary is now a merchandiser with Macy’s, he initially found it tough to find work. Still, the couple wanted to move ahead with their personal goals. In the end, the tough job market turned out to be a blessing of sorts: With just Capucine’s salary of about $50,000, the couple qualified for a Marriage Development Account with the nonprofit Capital Area Asset Building Corp. (CAAB). Limited to Washington, D.C., _residents, the accounts are part of a savings program for engaged and married couples to help eliminate debt and build wealth through long-term investments, such as purchasing a home. Couples commit to saving a set amount each month, which is matched at a rate of $3 for every $1 in personal savings. The Carringtons committed to saving $500 a month to reach their goal.
“We cut back on going to the movies, to dinner, clothes shopping, and traveling,” Capucine says. “It was stressful with [Gary] not working. We were pushed to the limit.” Gary adds: “It was a strain on our marriage at times because I couldn’t provide for her the way I wanted. I’m thankful the Lord saw us through.”
After four months, the Carringtons had a total of $3,000 saved, and they received $9,000 in matching funds. Shortly thereafter, they bought their condo. Another advantage, Capucine says, were the mandatory money-management classes. Couples must complete 10 hours of course work on topics including budgeting, credit management, financial goal setting, and training _related to homeownership.
In the end, the couple
says that the experience has strengthened their relationship. “We know we can get through whatever situations come up,” Capucine says. When you sacrifice and reach your goal, you get revved up. I was always more of a saver, but [now] Gary is more open to saving. He appreciates this in me now, _instead of just thinking I’m frugal. We feel like we’re on our way.”Like many couples, the Carringtons say they didn’t think about the financial implications of getting married. Tax write-offs were the last of their concerns. “We didn’t realize the _financial potential we had as a couple until we were married,” Gary says. “When you’re married, you have two ideas, two incomes, it’s two becoming one, and you get ahead.”
Help is out there
Marriage Development Accounts are supported in part by federal funds. The program began in 2006 under the direction of Sen. Sam Brownback (R-Kan.). According to the senator’s office, about 100 couples have opened accounts, with about $400,000 in matching funds from the government; additional support comes from private institutions. Though federal funding for the program was trimmed in 2007, Colleen Dailey, executive director of CAAB, says private sources have made up the difference. “We may not be able to maintain the generous match rate of 3:1 on up to $3,000 over the long term,” she says, “but we plan to continue offering Marriage Development Accounts.”
Because homeownership is widely viewed as the foundation for building wealth-and accounts for some 32.3% of the average household’s net worth-there are several agencies across the country that focus on strengthening families and are also housing counseling agencies certified by the U.S. Department of
Housing and Urban Development. One such _program is the _National African American Relationships _Institute (www.aa relationshipsinstitute.com), co-founded by Patricia Dixon, an _associate professor of African American Studies at Georgia State University. “Our organization teaches potential home buyers about budget, credit, and other information necessary for _purchasing a home,” Dixon says. “This is typically the biggest investment for the average family and is the primary way in which families can begin to build wealth.”
Many faith-based groups are promoting strong marriages with _financial literacy classes and workshops for couples. Michelle Singletary, syndicated _national columnist for The Washington Post, conducts workshops in the religious community at places such as First Baptist Church of Glenarden in Upper Marlboro, Maryland, and Christ is King Worship Center in Baltimore, among others. Some churches, such as New Birth South Metropolitan Church of Jonesboro, Georgia, have _marriage ministries that include working to _empower families financially.
Tannia Benef
ield and her husband, Terry Likens, recently _finished a 13-week “Financial Peace University” workshop offered by syndicated radio host Dave Ramsey. The couple joined many others at the Overlake Christian Church in Redmond, Washington, all in an effort to tackle their biggest problem-debt. “We started the debt snowball, paying off debt, got extra jobs to pay off more, and we’ve begun to buy big-ticket items with cash and pay less for them,” Benefield says. The Seattle couple paid off more than $5,000 of their $20,000 debt load in about two months. While they are trying to get current on their bills, they feel _victorious. “This has brought us closer together,” Benefield says. “We talk more about the finances, and my husband and I don’t keep any financial secrets anymore. I accept him for who he is and vice versa. We are in this together.”
The couple has had to make some adjustments and learn about each other along the way. Since moving to Seattle in June of last year, Benefield has been a stay-at-home mom to 10-year-old
Kenah, and 1 year-old Kenze. Before the move, she worked as a
mental health counselor, earning $33,000. “When I was working as a counselor, I had a salary that took care of the bills, and Terry’s salary was extra,” Benefield says. “I took care of all finances except for his car. Then we moved, and I wasn’t working or taking care of the finances. Terry didn’t tell me everything, and I didn’t investigate, ask questions, or press him until we fell into debt.”
While adjusting to supporting the household on his income as a computer support analyst for Sprint, some of the bills fell behind. “He so wanted me to stay at home and not work that he got rid of the car and starting working two extra jobs,” Benefield says. “And I placed myself in charge of the finances and got a part-time job.” Realizing they had to take control, they enrolled in the workshop.
“If you have a plan and know where you are going, you can enjoy the things you would normally not have as a single person,” Likens says. “Marriage is a lifetime commitment and is far different than being single or just living together.”
About the course, he adds, “It opened up communication about the sensitive issues of money and created a stronger bond between us. We have the confidence that we are both on the same track and working on the same financial goals.”
Marriage is Hard Work
While marriage can be a wealth building tool, the road to _paradise is filled with detours and obstacles. “What separates those who succeed from those who fail is how they resolve their problems,” says Rozario Slack, director of Marriage, Fathering & Family Initiatives at First Things First, a nonprofit community organization in Chattanooga, Tennessee. A marriage can be less than harmonious when one partner is a spender, ignoring the budget, or putting the family in debt.
Also, keep in mind that there are no absolutes. There are times when being married can be a household tax liability. “Hire a CPA, and have him or her prepare the taxes both jointly and separately,” says Lyndall Medearis, branch manager of the Houston office of AXA Advisors. “In some tax years, joint filing will be the way to go, and some years, separate will be more beneficial.”
All told, marriage clearly promotes the economic, social, and psychological well-being of African American men and women. A marriage between two committed people who love each other and have access to support systems is a __win-win union. Says Zagorsky: “Getting married and staying happily married is a wonderful way to increase wealth.”
By the Numbers
On virtually every indicator of economic well-being, married black adults do better than their divorced, widowed, separated, and never-married peers.
Married African Americans are also more likely to _secure an important part of the American dream-owning a home.
Married African American men earn between 15%
and 18% more than their never-married peers.
Married African American women earn about 13% more than their never-married peers.
From 1950 to 2000, the percentage of African _American women who were married declined from 62% to 36.1%. Among white women, the corresponding decline was 66% to 57.4%.
From 1980 to 2000, the percentage of young black adults who had never married increased from 28.5% to 44.9%.
In the first two years following divorce, family income for whites falls 30%, while family income for African Americans drops 53%.
Sources: The Consequences of Marriage for African Americans, Institute for American Values (2005), Joint Center for Political and Economic _Studies, and Demography (February 2005)