Your Marriage Is Your Most Important Financial Asset

This title may be somewhat provocative to some, but it is not meant to be. The entire purpose of this post is to discuss the importance of your marriage. There are genuinely financial ramifications for maintaining a healthy, thriving marriage. Even further, there can be catastrophic financial repercussions for neglecting your relationship.  

As my wife and I have tirelessly navigated the stressful world of physician finances and debt elimination, we have had to lean on each other more than I imagined. A dual physician marriage can create a legacy through income generation. However, climbing out of debt, investing for the long term, and controlling lifestyle creep takes patience, love, understanding, and grit. Let us explore why your marriage is your most important financial asset.  

Understanding Physician Finance

It is vital to get the ‘30,000’ foot view first before we focus on individual aspects of a financially successful marriage. For starters, let’s clarify what physician finance entails. Physicians, like many other professions, face some unique challenges. They invest years in education, accrue substantial student loans, and often deal with irregular working hours in high-stress environments. At the same time, they have strong earning potential. Understanding these financial dynamics is crucial when discussing the role marriage plays in the context of physician finance, primarily when both partners work in healthcare professions.  

Personally, my wife and I are both physicians. We both accrued six-figure debt during our medical schooling, which happened to be where we met! When we were wed, so too was our debt combined. At its peak, we had a combined medical education debt of $680,000! Since then, we have been investing our time in financial self-education and our money in debt elimination and wealth accumulation.  

If you want to read the full story, check out My Story. Further, if you remain interested in how we have progressed with debt elimination and wealth accumulation, check out How We Crushed Half of Our Medical School Debt. Lastly, check out Building Financial Literacy for Physicians: The Ultimate Guide to learn more about physician finance.  

Now, let us move onward and focus on the impact of marriage on physician finances.  

Impact of Marriage on Personal Finance

There are a few topics worthy of discussion when it comes to marriage. For starters, let us focus strictly on the economic ones. Here are a few I have found to be impactful:

Dual Income Advantage

One of marriage’s most apparent financial advantages, especially for physicians, is the potential for a dual-income household. When both spouses work, the household income is likely to be significantly higher, providing greater financial stability and flexibility. This additional income can be channeled into various financial goals, such as paying off student loans, investing for retirement, or saving for a child’s education. More obviously, there is a financial superpower that comes with being a dual physician household. 

Shared Expenses

Marriage often leads to shared expenses, which can significantly reduce the financial burden on each individual. Housing costs, utilities, insurance premiums, and grocery bills can be split between spouses, allowing for more savings and investments. For physicians, this can be especially beneficial as it can expedite the repayment of substantial student loan debt.  

Spousal Retirement Savings

Marriage can also play a pivotal role in retirement planning. Spouses can maximize their retirement savings through employer-sponsored plans, IRAs, and other investment vehicles. Physicians can benefit from this by strategically allocating their investments, potentially reducing the overall tax burden during retirement. A great example is a backdoor Roth IRA and a Spousal Roth IRA. Follow this link to learn more about correctly performing a backdoor Roth IRA conversion.  

Challenges of Marriage in Physician Finance

I would be remiss if I did not talk about some of the financial challenges marriage can bring. While marriage offers numerous financial benefits, it also comes with its own set of trials in the context of physician finance.  

Uneven Work-Life Balance

The demanding nature of a physician’s profession can sometimes strain marital relationships. Long working hours, on-call duties, and the emotional toll of patient care can affect a physician’s availability and participation in their marriage.  

Student Loan Debt

Many physicians’ high student loan debt can also be a source of stress within a marriage. Effective communication and a clear financial plan that addresses debt elimination are crucial to managing this hurdle.  

Financial Compatibility

Differences in financial goals, spending habits, and risk tolerance can create tension in a marriage. Open and honest communication is critical to addressing these differences and creating a unified financial strategy. This can be an opportunity to make a financial plan you both contribute to, further unifying your financial goals.

Divorse is Expensive

It is important to include one last topic that is sometimes taboo to address but necessary nonetheless. Let’s face it: divorce is expensive. Aside from the emotional reasons to invest in the maintenance of your marriage, divorce can be catastrophic for your finances. Here are several factors that can make divorce incredibly costly:

• Property division
• Alimony and child support
• Legal fees
• Emotional toll
• Change in tax status

I will only ramble a little on the bullet points above other than to say they are costly. You have to divide up your property. A substantial portion of your paycheck may now be dedicated toward paying alimony and child support. Attorney fees come with divorce or mediation, and all get more costly the longer it is drawn out. A change in your tax status can often impact how much you pay ‘Uncle Sam.’ Lastly, and most importantly, it is likely to have a substantial emotional toll. The day-in-day-out struggle of ‘picking up the pieces’ after a divorce can wreak havoc on one’s mental and emotional well-being…even for resilient physicians.  

Do yourself a favor and make a conscious effort to work on your marriage like your life depends on it because the truth is, it does!

The Emotional and Psychological Benefits of Marriage

While the financial advantages of marriage are evident, it is essential to recognize that marriage’s emotional and psychological aspects also significantly impact a physician’s financial well-being. A strong and supportive marriage can reduce stress levels, improve mental health, and improve work-life balance. These factors can substantially impact a physician’s career, leading to increased job satisfaction and potentially higher earnings.  

It can sometimes come across as heartless or unemotional to talk about marriage exclusively in the context of finances. I tend to be a bit of a romantic, so I would be remiss if I did not pause to talk about the other benefits of a healthy marriage and why they can also lead to a lifetime of happiness, support, and wealth (in more ways than one). 

However you choose to view marriage, be it strictly a legal unity, a social contract, a religious vow, or anything else, marriage still holds an essential place in our life, both culturally and spiritually. For those lucky enough to find our counterpart in another, there are few limitations to what you can achieve. Strictly speaking on finance, a marriage has a way of refocusing on what is important in your life.  

As my marriage has strengthened over time and we have reared children, my love has only grown. I have discovered that most of my joy comes from time with family. This is rarely impacted by how much money I have in my account. True, financial independence and security are very important. I do not mean to discredit this in the least. Yet, having a healthy marriage and an investment in family can re-frame the purpose of wealth and what it can achieve.  

I have no longer needed to sign up for that extra shift or refuse to eat out to save a dollar. My money is better spent on what I value most: time with my family and making memories. Having a mansion or a sports car will not increase the joy I receive from my family. Because of this, I find myself indirectly making choices that save me money cause I don’t need to spend more on things that do not align with my priorities: family, time, and experiences.  

Tips for Maintaining a Robust and Financially-Successful Marriage

I am not a marriage expert. My wife and I likely navigate the same struggles as many individuals reading this article. However, I have come to appreciate a few commonalities that exist when it comes to maintaining a strong, financially successful marriage. Here is the shortlist I came up with:

Communication

First and foremost (as cliché as it is) is communication. Though physicians often pride themselves on their ability to interact with patients and peers, we all have room to grow regarding effective communication with our spouses. Effective communication is the cornerstone of a successful marriage. Regularly discuss financial goals, concerns, and strategies with your spouse. Consider involving a financial advisor to help you make informed decisions.

Cooperative Financial Planning

Given this website’s mission and this article’s goal, collaborating financial planning is another critical tip for maintaining a financially strong marriage. Create a comprehensive financial plan that includes short-term and long-term goals, budgeting, and investment strategies. A well-defined plan can help you and your spouse stay on the same page.  

Building an Emergency Fund

I am a big believer in an emergency fund. Honestly, everyone should start with a fund that houses three months’ worth of living expenses and potentially grows to six months (or more) depending on your risk aversion. Build an emergency fund to provide financial security during unexpected events. This can ease financial stress in the event of an illness, injury, or job loss.  

Seeking Professional Help

Lastly, remember I am not a financial professional. Like in medicine, you should always get a second opinion. Financial advisors can help any couple navigate their financial goals. Feel free to consult a financial advisor or counselor if you encounter challenges in managing finances within your marriage. They can provide valuable insights and strategies tailored to your unique relationship.  

Take Home Points

In the world of physician finance, your marriage is indeed your most important financial asset. It can boost your income, reduce expenses, and provide emotional support. However, it is essential to recognize the challenges and proactively address them through open communication and financial planning. A strong and healthy marriage can lead to a more secure and prosperous financial future, making it a fundamental pillar of your economic well-being. 

Remember, the connection between marriage and physician finance is complex, and the strategies that work best for each couple will vary. By understanding the financial benefits, challenges, and strategies for a successful financial partnership, physicians can harness the full potential of their marriage as their most important financial asset. This can strengthen their marriage and their wallet! As always…

Stay Motivated!

The Motivated M.D.

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Standard Disclaimer: None of the information on this website is meant as individualized financial or medical advice. These posts may contain affiliate links.