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Home » Lifestyle Finance

Newlywed Finances: When 2 Becomes 1

Last updated by on January 16, 2016

Fresh off a somewhat heated discussion around keeping finances separate or combining in marriage, I realized we didn’t even get to the fun stuff: the cost benefits of becoming a newlywed.

You could really swap in the word “cohabitants” for newlyweds, as 60% cohabit prior to signing their life away… er, marrying. And there are an ever-growing number of cohabitants who never get married. But, you get the idea: 2 can be cheaper than 1 + 1.

When it comes to potential savings, most are derived from the power of reduced common living expenses, not tax benefits.

The biggest savings will likely come from cutting your mortgage or rent costs approximately in half. One less dwelling means you’re also cutting property taxes, utility, home or renter’s insurance, and telecom expenses.

This could equate to savings of hundreds, maybe thousands every single month. This new-found cash flow can also lure you into a false sense of security, if you let it.

But YOU are not going to let it! You’re instead, going to optimize your finances by doing the following…

1. Go from Two Vehicles to One

newlywed financesThis one involves a little planning (ideally before you move in together).

Outside of a home/apartment and maybe student loans, nothing is a bigger money-suck than a vehicle. But now that “two-is-one”, you may just have an opportunity to do the same to your vehicle arrangement.

My recommendation is to stick with or find a place to live that is close to one of your places of employment (if they are far apart) versus somewhere right in the middle (which only encourages you both to drive and keep a car). Getting to work can then be a matter of at least one of the two of you taking public transportation, carpooling, walking, or biking to work. And errands? You don’t need two cars to do something you can limit to once a week.

If your employers are close to one another, it becomes even easier to get rid of a car.

And if one of you is a self-employed stay-at-home, you have no excuse for two vehicles.

Dropping a monthly vehicle lease/payment, insurance, and parking fees and annual plate renewals and maintenance can result in thousands of dollars of savings every year. The sacrifice is nothing.

2. Optimize your Health Insurance

This one goes beyond friendly cohabitant grounds, as it’s open to those with a marriage license and domestic partners (if they are an employee of the 52% of employers offering domestic partner benefits).

I would bet my life savings that there is a good percentage of newlyweds or domestic partners out there that don’t bother to optimize their health insurance coverage when forming their union.

If you each have individual health insurance coverage through your employer, you might be thinking that it’s just cheaper to each keep your respective employer’s plan. In most cases, it probably isn’t, particularly as more employers are offering cash incentives if you don’t use their health insurance.

And if you’re young, like most newlyweds, there might even be a possibility that you could save money by switching to a self-sponsored HDHP vs. sharing the costs on an employer’s coverage, if they only sponsor a pricey PPO.

Follow this framework to compare costs:

  1. Find out what individual, individual + spouse, and individual + family health insurance coverage costs from each employer, and if they offer a cash incentive to not use their health insurance.
  2. Find out what a self-sponsored plan would cost through a cost comparison engine.
  3. Run some hypothetical scenarios (i.e. 2 doctor visits and 1 prescription per year). Check out my HDHP vs. PPO cost comparison post for some insights.
  4. Go with the cheapest total cost.

Also, when you get married, it is considered a “qualifying life event” (same as a death, child birth, or divorce) that permits you to change your health insurance outside of your employer’s open enrollment period. So, don’t wait to start saving money.

3. Sell Half your Stuff Right Away

Assuming you aren’t both minimalists, when you first move in together, you’re going to have crap piled on crap.

You could elect to move it to an empty room, disperse it throughout your abode, or save it in storage for when you upgrade to your McMansion.

Or, you could actually use it as an opportunity to cleanse and make some serious cash and get maximum dollar before it further depreciates. I highly recommend the latter.

It wasn’t until 5 years in to our marriage that my wife and I really started to downsize our personal belongings. We both had stuff from our bachelor/ette days that we sat around and collected dust for far too long.

We have since made thousands selling this stuff on Craigslist, EBay, and Amazon.

Monetary benefits aside, starting a life together, surrounded by a bunch of clutter is just plain bad karma.

4. Get a Few Cheap Cookbooks and Get Smart with your Grocery Planning

Now that you are living together, you have an opportunity to save a lot on food, with a little planning and habit change.


Putting a lot of effort in to cooking a big meal just for yourself usually sucks. And the result is more dining out and the high costs associated with doing so.

Cooking for yourself and another? Much more rewarding and less of a chore, particularly if you share in the effort. The more you cook, the better you get at it. The better you get, the more meals you try. The more meals you try, the more you find meals you both like. The more meals you both like, the easier it becomes to cook at home. The more you cook at home, the easier it becomes to effectively plan out your grocery buying and bulk purchases to save money. And the less produce and leftovers go bad and get tossed. It’s the circle of life.

5. Avoid Lifestyle Creep, Particularly on a House

After you start bathing in all the cash from cost savings, you’re going to have a little voice pop up over your shoulder.

“hey you – you deserve that kitchen re-model”

“hey you – housing market is cheap, and you can now afford to buy that dream home you deserve”

“hey you – if you’re only going to have one vehicle, maybe you should get that shiny new SUV”

It’s called “lifestyle creep”. And it’s awful tempting. Giving in is dangerous. Not only will you wipe out the golden opportunity of cost savings that you have been afforded, but you take on more risk with higher expenses.

What happens in the event of unemployment, children, death, disability, or divorce? Half your income disappears, but you are left with significantly higher debts and expenses than what you started with.

Getting married doesn’t have to be equated with getting a fancy new house and lots of new toys.

You’ll be better off without.

What are your Newlywed Finance & Cost Saving Tips?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 10,000+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • Emily @ evolvingPF says:

    For the first couple years of our marriage, I think we netted zero spending-less over being single or perhaps even increased our spending slightly – we had been living with roommates so our housing costs were already optimized. Our car insurance went down but some other expenses went up from sharing products (the more expensive product-buying person clearly cares more, right?). I wrote about it here:

    It wasn’t until we consolidated to one car that we started seeing a little spending-less, but that was only about $1000/yr. None of the rest of your list applied to us.

    So I don’t have any tips for newlyweds aside from getting on the same car insurance policy – if you had your financial house optimized solely before the wedding, I don’t think much would change after combining!

  • Lucas says:

    Those are all true. The biggest savings for us in order were:

    1) Lifestyle creap is definitly #1 thing we have avoided and it has made a huge difference for us financially.

    2) Taxes – There was a large income disparity between my wife and I so filing jointly made a big difference on our combined taxes :-). And honestly now that she is home and we have kids, the tax brakes I get vs what I would pay if I was single almost pay for the increased cost of extra family members.

    3) Transportation – we did go to one car and it helped us save a lot for a downpayment

    4) Food – agree that it isn’t that fun to just cook for yourself, but doing it with your spouse/family is much more rewarding and can save increasingly more depending on # of family members.

    5) Housing – to some degree. Although when you are single you can always get roommates or rent out extra bedrooms of your home. So honestly this didn’t make much of a difference initially, but will have more longer term implications.

  • Kim says:

    “And if one of you is a self-employed stay-at-home, you have no excuse for two vehicles.”

    Not as easy as it sounds for a self-employed work-from-home mama tasked with kids’ doctor appointments & day trips while the husband takes the family car 30 minutes away to his 9-5 that he can’t leave for mid-day errands. It is ironic that the family member who spends most of their time at home often gets delegated the majority of the errands due to their flexible work arrangement, yet we still expect stay-at-homers to not require their own car.

    Public transportation options are pretty nil in our town (Orlando) although we live in a neighborhood where we can walk to mostly anything we need (except the doctor). We ran the math and since our cars are 100% paid off, we’d only be saving about $600/yr in insurance & tags to drop down to a one-car family. At that small amount, we’d rather keep our flexibility. That said, if I’d made the leap to stay-at-home long before starting a family, I’d ditch the car for a moped to get around town for errands. Mopeds are ridiculously cheap and a great option for those mid-week errands that don’t require the family vehicle.

  • Jon D says:

    Excellent point about sharing a single car where possible. If you can do it I wouldn’t definitely agree that it is one of the major expenses that you can cut back upon. It might mean sharing a lift into work or planning around who is having the vehicle on which days, but it’s a massive money saver!

  • A lot of the points you mention in the article are absolutely true. It’s difficult enough integrating two lives why make it even more so by have money issues on top of it. I completely agree with the selling half of your stuff immediately idea.

  • chubblywubbly says:

    Have a monthly discussion of your entire financial picture. The earlier you do it in your married life the better. I only started doing this last December after being married for 2 years when I could not stand how much money my husband was spending.

    He wanted us to eat out all the time, buy nice stuff, and go on trips all the while planning to retire at 40. I was finally able to convince him that we need a budget and a financial plan.


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