At a Glance
Inflation is soaring and it has made the situation worse for singles. Here’s what you need to know about the singles tax.
“I like my money where I can see it, hanging in my closet,” Carrie Bradshaw once said. Of course, this was way back in Season 6 of “Sex and the City” in the ancient year of 2003. It was a simpler time before Instagram, before women started wearing $600 sneakers as dress shoes and before our senses were poisoned by the mess that is “And Just Like That.” And though the character of Carrie Bradshaw is so much richer in her current iteration, she never seemed to have many money problems as a pre-dominantly single, female writer in New York City who didn’t come from a wealthy family and managed to afford her one-bedroom apartment and a designer wardrobe by writing one article a week. But if Carrie Bradshaw was single in today’s economy, she’d have a hard time keeping her shoe collection – or moving out of the city altogether. In the age of inflation, married people are now nine times wealthier than single ones.
Yes, you read that right. The Wall Street Journal reports that the median net worth of married couples aged 25-34 was nearly nine times as much as the median net worth of singles in 2019, according to data from the Federal Reserve Bank of St.Louis.
of women married to men leave the financial planning and investment decisions to their husbands!
This wealth gap has always existed, but it’s getting broader and broader. For comparison, in 2010, the median net worth of married households was only four times bigger than the median net worth of single households. So, why is this happening? And what kind of effect is it having on relationships and romance?
Why the singles tax is getting worse
Regardless of your marital status, you’re feeling the pain of inflation, from checking out at the grocery store to filling up your tank. While the rate of inflation slowed down in August, it’s still high at 8.3%.
The Federal Reserve just raised interest rates again in an effort to bring those rates down. The Fed’s rate is now at its highest point since 2008, and could go up even higher. While this does decrease inflation, it also slows down borrowing and increases the costs of taking out a mortgage, a car loan, or a business loan.
Inflation pushes all prices upwards, including homes. However, if you already own a home, it could be your best protection against the economic impact of the soaring cost of living, as your property also appreciates in value. This is even more true if you have a fixed mortgage rate. Here’s another important factor of the impact of inflation on the real estate market: Rent prices also increase. “As housing development slows and demand for existing properties rises, occupancy rates typically skyrocket. In such environments, landlords raise rents,” according to Forbes.
For single people, the financial stress is felt even more, as they are less likely to own a home to begin with and higher interest rates on mortgages adds another barrier to entering the real estate market with one income.
“The difference is people with one income versus people who can rely on two incomes are able to build wealth much more slowly. So married couples are sort of accelerating that track while single people are really just trying to keep up,” shared Wall Street Journal personal finance reporter Julia Carpenter in an interview with WSJ Your Money Briefing host Daniella Cheslow.
According to Carpenter, struggling with things like home ownership, being able to save for retirement, and having access to an emergency fund, is making it more challenging for single people to reach “money milestones that are really key to building wealth in America.”
How inflation could destroy friendships between single and married friends
As if things weren’t bad enough for singles, inflation could also create issues in their friendships with married couples.
In a bank of America survey, money was cited as the fourth largest cause of stress in friendships. Fifty-three percent of respondents revealed they’d seen a friendship end over money, and a shocking 75% of respondents said they would end a friendship over $500.
This means that single people borrowing money from married, wealthier friends could risk their relationship if they aren’t able to pay the money back.
The wealth gap between singles and married couples can also cause distance in relationships due to practicalities. When you’re drowning in debt, you can’t exactly RSVP to every fancy event.
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The singles tax may also be slowly killing romance
For better or for worse, dating has also become way more pragmatic. Long gone are the days of getting to know each other over fancy drinks at a hip cocktail bar followed by a three-course dinner. Some singles are even choosing potential suitors based on their location to decrease fuel costs.
Gaige Kidd, 33, a Florida-based health-care recruiter, told the New York Post that the cost of gas is a factor in his decision to go on a date. “It can take 30 or 40 minutes to get [to her], and I drive a truck, so I can blow through a tank a week,” he said.
The singles tax is also preventing unhappy married couples from getting divorced. For example, one third of Coloradans in a DivorceAnswers.com survey said that they can’t separate because they could not afford to live somewhere on their own. Montana has the highest rate of couples wanting to split up but being unable to because of inflation at 75%.
In other words, the singles tax may be slowly killing romance, whether you’re single and looking to meet someone for love – not budgeting reasons – or whether you’re unhappily married but unable to get divorced because of money. It’s tough out there, even if you have fabulous shoes.