Love letters: Couples more likely than singles to have written financial plans, save more

It’s been said that money can’t buy love, but apparently love can make people think more seriously about their money. Only 14 percent of single, divorced or widowed Americans have a written financial plan, compared to 24 percent of married or partnered households.

“Domestic partnership naturally involves more conversations about money, especially short-term spending,” said Laura Varas, CEO and founder of Hearts & Wallets. “About 40 percent of couples actively engage in long-term planning, such as for retirement. It’s time for single self-care to include creating a plan for a solid financial future. Good plans include a broad range of financial topics, including living expenses and detail on saving and asset allocation by account type.”

Hearts & Wallets recently surveyed U.S. adults about financial planning. Four of five households think about working toward long-term financial goals, with half having a plan. Married and partnered couples report their top inspiration to plan for long-term financial goals (41 percent) is each other. Singles say their top inspiration is when they start to ”think seriously about retiring” (41 percent).

Nationally, 40 percent of couples report an advisor being the inspiration for their written plan. For couples with assets of $2 million-plus, advisors are more likely to be the inspiration for planning than partners. One-fourth of single households cite advisors as the inspiration for written plans, including 29 percent of singles with $2 million-plus in assets.

“Advisors should recognize the dynamics of intrahousehold decision-making in plan inspiration and development,” Varas said. “Six percent of singles say they were inspired by a partner, although this partner relationship is not formalized.”

The survey also found that people with a written plan save more:

• More than half of households with written plans save 10 percent or more of their income compared with one-third of those with unwritten plans.
• For households that think about goals but don’t have a plan, the most common behavior is to save modestly at 1 percent to 5 percent of income, and about one-fourth don’t save at all.
• Written plans may be especially important for low- and moderate-income levels, potentially increasing the number of those households that save 10 percent-plus of annual income.

“Educating low- and moderate-income households on the benefits of written plans may help them to build a stronger financial future,” said Beth Krettecos, Hearts & Wallets subject matter expert.