Study: Vast Majority Of Single Americans Feel Burden Of ‘Singles Tax’ (2024)

If you’re among the nearly half of American adults who are single, you enjoy some freedom. But that freedom may be coupled with frustration over facing your finances alone.

That frustration is felt everywhere. For example, singles who live alone generally pay a premium to rent places to live and cover household bills on their own. And if you travel solo on a cruise, you may be charged a “single supplement” for a room meant for two occupants. The “single supplement” surcharge can jack up the fare by roughly 10% to 100%. Furthermore, singles might gain access to fewer tax benefits than their coupled counterparts.

These financial burdens are known as the “singles tax.” This term refers to higher costs that singles often bear compared with coupled people or even singles who don’t live alone.

A recent survey of 1,008 U.S. adults (both single and not single) commissioned by Forbes Advisor and conducted by market research company Prolific sheds light on the “singles tax.” The survey finds a massive 93% of singles acknowledge the burden of the tax—and one-third of respondents admitted to staying in a relationship longer to take advantage of the financial benefits.

Key Survey Findings

• 93% of singles acknowledge the burden of the “singles tax”
• 1 in 3 admit they have stayed in a relationship longer because of its financial benefits
• 35% of singles split some expenses with other people, including parents, roommates or siblings
• 76% of married people report they’re more financially secure since getting married

The Trade-offs of Mixing Money and Love

Not only did about one-third of those surveyed fess up to staying in a relationship longer for the monetary benefits, but 14% acknowledged staying in a relationship only because their partner was supporting them financially.

Judi Leahy, a senior wealth advisor at Citi Personal Wealth Management, points out several reasons why someone might linger in a relationship to save money:

• Marriage allows a couple to file joint tax returns, resulting in a bigger tax break that isn’t offered to singles. For instance, joint filers are eligible for more tax credits than single filers are.
• Couples can often share the cost of insurance, such as auto coverage and health coverage.
• Couples who live together can split one internet bill, one electric bill and so forth.

“While relationships do come with a lot of benefits, it’s not a reason to stay trapped in an unhappy one. There are various alternatives that will be more beneficial to your mental and emotional health,” Leahy says. “The cost of an unhealthy relationship is always more expensive than facing your finances alone.”

Indeed, 41% of those surveyed say they’ve been in a relationship that was “financially draining,” and 59% feel that the ability to avoid financial conflicts with a partner might make the singles tax worth coping with.

Inflation Aggravates the Singles Tax

As if the singles tax weren’t already enough of a hardship, 59% of those surveyed reported inflation has made the singles tax even worse. Housing, utilities and groceries are the areas where this inflationary pain is being felt the most, according to the survey.

Certified financial planner Marcy Keckler, senior vice president of financial advice strategy and marketing at Ameriprise Financial, suggests three ways to ease the impact of ballooning living expenses:

• Stash money. Look into automatically funneling some of the money from your paycheck into an emergency fund. This cash cushion can help singles handle unexpected or higher expenses.
• Monitor your spending. Seek opportunities to reduce your spending. For instance, review your subscriptions to see whether you can eliminate unused or underused ones.
• Boost your income. Consider turning a hobby into an income generator, taking on a second job or asking for a pay raise.

Additionally, Leahy recommends working toward paying off debt (especially high-interest credit card debt), putting together a budget to give you a better sense of what you’re earning and what you’re spending and getting a roommate who can split household expenses.

“As we navigate the current economic environment and an inflated cost of living, this is an opportune time to check in on your finances and re-evaluate your goals, single or not,” Leahy says.

In the survey, 31% say the opportunity to share expenses is one reason they want to be in a relationship and 24% say recent economic pressure has made them want to be in a relationship even more.

More than one-third (35%) of singles report splitting some expenses with other people. This includes parents, roommates and siblings. Almost 3 in 10 (29%) of those who split costs with others believe they’ve fully overcome the singles tax and wouldn’t save any more money if they were in a relationship.

Most Believe People in Relationships Are Better Off Financially Than Singles

So, are attached people better off financially than single people? In the survey, 85% of people (single and coupled) believe the answer is “yes.”

More than three-fourths (76%) of married people in the survey report being better off financially since getting married, and nearly half (48%) in unmarried relationships report being better off financially than before their current relationship.

Still, a relationship doesn’t always equate to financial stability. That’s why experts suggest people in relationships build up savings on their own in case their circ*mstances change, using savings vehicles like a high-yield savings account or through certificates of deposit (CDs).

“If you’re contemplating the end of a relationship, the idea of unwinding finances from your partner can feel overwhelming,” Keckler says. “Many people choose to stay together longer in part to avoid the pain of having tough money conversations and potentially higher expenses. Detangling your finances is particularly tricky when there are children and pets in the picture.”

That detangling can be especially difficult, since the survey shows 60% of married couples split all expenses and 38% of unmarried couples split all expenses.

Conversely, 14% of married people report having a spouse who pays for everything and 11% of people in unmarried relationships report the same for their partner.

Bottom Line

Singles may love the independence afforded by their relationship status. But many pay the price in the form of fewer tax breaks, bigger rent payments, higher household expenses and other “singles tax” disadvantages.

Many singles appear to not be overly concerned about their financial predicament, though, as 2 in 3 say they don’t share costs with anyone. Of course, that could change if Cupid’s arrow strikes—lifting their hearts and their bank balances.

“Fundamentally, couples are able to share the burden of expenses that they have, while single people don’t have the same luxury. This is essentially the concept of economies of scale,” says Jesse Little, senior director of advice at Wells Fargo Wealth and Investment Management.

“Rent or mortgage payments, travel expenses, gym memberships, cell phone plans and many other expenses are more burdensome for single people than for couples,” Little adds, “in part because deals are often offered for families, but more so because singles don’t always have someone to share the responsibility with.”

Methodology

This online survey of 1,008 U.S. adults was commissioned by Forbes Advisor and conducted by market research company Prolific. The margin of error is +/- 3.1 points with 95% confidence. Data was collected on January 27, 2023.