Sunday, October 21, 2007

Marriage and Personal Finance: Yes, They Are Related!

A weekend of marriage counseling led me to a troubling conclusion about education in this country: Why aren’t marriage and personal finance classes taught in the public school system? Marriage is one of the biggest decisions a person will make in their lifetime, and yet there are no formal requirements to educate young people before getting married. Is it a wonder that 50% of new marriages end in divorce?

Personal financial problems continue to rise in this country. In 2005, the average American household with at least one credit card carried a balance over $9,000. In terms of real world application, I can’t think of another subject that equals personal finance. Every American should have a baseline understanding of finance and investing; however, most people learn about it through trial and error after they are already in debt.

I believe marriage and personal finance have an obvious connection: 50% of new marriages end in divorce; 80% of divorcees cite financial problems as the main reason for separation.

The ironic part of this debate is that marriage actually makes you richer. A study by an Ohio State University researcher shows that a person who marries — and stays married — accumulates nearly twice as much personal wealth as a person who is single or divorced.

If marriage makes you richer, and the divorce rate is tied to financial problems, why don’t more people stay married? People don’t plan to fail; they fail to plan. However, it’s not entirely their fault. The lack of formal education in these two critical areas is a main factor. American schools should make marriage and personal finance classes mandatory from a young age. Starting early will only help people plan for success.

More to come on this topic……