The secret to generating long-term wealth? Staying married (2024)

We know that in Australia, some of the greatest ways to generate personal wealth are by earning a high income, owning property, developing a healthy investment portfolio, and staying on top of your superannuation contributions. Another way, and one that we discuss a lot less, is your relationship status.

There’s something that feels distinctly taboo about saying that marriage is a key driver behind a person’s long-term financial success. But sometimes the most honest conversations are the most uncomfortable, and it’s time we addressed the ’til death do us part-shaped elephant in the room (or rather, the economy).

Putting your feelings on the eternally complicated matters of love, dating and marriage to one side, the numbers paint a clear picture of the state of wealth in this country for people who are married or in de facto partnerships and those who are single or divorced. These are the haves and the have-nots in modern Australia.

According to the Australian Institute of Family Studies, the marriage rate in Australia has been declining for decades, while the number of people living in de facto relationships has continued to grow.

So, while the current divorce rate is 44 per cent, the rate of unmarried breakups is unknown. Take a quick mental scan of your friends and family circle; chances are you’ll either know several people who fit into this category or you might be in it yourself.

While staying in an unhappy relationship purely for financial purposes isn’t something anyone should do, the reality of separating is hardly rosy.

It’s worth acknowledging finding yourself among the percentage of couples who don’t separate or divorce does involve at least a little bit of luck.

The average age of divorce for an Australian woman is 43, while for men, it’s 45. If the couple has children, they will be likely to be aged somewhere between three and 10 years old. That means that, for at least a decade, a once-combined household income has to cover two rents or mortgages, two sets of household expenses, two separate savings accounts no longer enjoying interest on a larger combined amount, and two separate holiday funds.

Let’s paint a picture of life before and after. Let’s say a couple, we’ll call them Jack and Jill for the sake of the experiment, are living together in Sydney.

In its August 2023 report, the Australian Bureau of Statistics lists the median weekly income of a man working full-time (Jack) as $1291 and woman (Jill) working full-time as $1165 after tax.

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With a combined weekly household income of $2456, Jack and Jill need to allocate around $730 per week for rent, and an average of $38.67 for private health insurance, $100 for public transport, $94 for petrol.

That leaves them with $1493.33 per week to spend on things such as groceries, household bills and subscriptions, home and contents insurance, any loan repayments, socialising, clothes and grooming, and savings.

If Jack and Jill split, the picture changes substantially. Jack has just $351 to cover everything outside of rent, health insurance (which goes up to around $66 per person when single), public transport and petrol, while Jill has just $225.

If they lived in Melbourne, where the median rental price drops to $550 per week, the couple’s combined weekly spending and savings pool would be $1673.33. If they split, Jack’s leftover income would drop to $531 per week, while Jill’s would sit at $405.

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And that’s before mortgages, any personal or car loans, or children are added to the mix. With so little left at the end of the week, simply getting financially back on your feet after a separation will be hard enough, let alone getting ahead.

Looking a little further down the track, this bears out again. Recently, we’ve seen the fastest growing cohort of people experiencing homelessness or housing and financial stress are older Australian women who are single.

According to census data between 2011 and 2016, the rate of older single women experiencing homelessness grew by 31 per cent. The primary driver for this poverty is, of course, a lack of assets like owning a property, a lack of substantial savings, and a lack of superannuation.

None of this is to discount or discredit the hard work that goes into a relationship. Even the best examples require work and effort. But sometimes, circ*mstances out of your control intervene – betrayals are unforgivable, actions are unacceptable, lines are crossed – and sometimes, a relationship simply runs its course. So it’s worth acknowledging that finding yourself among the percentage of couples who don’t separate or divorce does involve at least a little bit of luck.

When it comes to savings, assets, and superannuation balances at the time of retirement, we consistently see just how greatly that spark of luck (and hard work and effort) pays.

Victoria Devine is an award-winning retired financial adviser, best-selling author, and host of Australia’s number one finance podcast, She’s on the Money. Victoria is also the founder and co-director of Zella Money.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circ*mstances before making any financial decisions.

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