Financial Independence is Much Harder as a Couple

Love ain't FIRE

Love ain’t FIRE

It’s true.  Math and Science don’t lie!  I will prove it in this article. 

Getting to financial independence or retired early (FIRE) stage is not easy – it requires of years of persistent effort, discipline and an ability to think for yourself and often against the ‘grain’ of modern lifestyle and social norms.   Maybe one in a hundred people will have the wherewithal to reach FIRE.   So, the probability of getting to FIRE is say about 1%, whether you are a man or a woman.

So, what are the odds of getting to FIRE as a couple?  If you add up the odds, and say 2%, go to the back of the class! Sorry, you are wrong.  Your odds of getting to FIRE as a couple will depend on both of you having similar attitudes and persistence.  So, the probabilities should be multiplied, not added.

1% x 1% = 0.01%.   So, your probability of FIRE as a couple is 100 times harder than a FIREd single!

This math will make sense if you think about how you – having positive habits on personal finance (otherwise, you wouldn’t be on this site!) – will react when you are paired with a person with a very different attitude about money. Even rational-thinking individuals can get drowned in debt or get sucked into poor lifestyle habits after they take on a partner who believes in living large or who doesn’t share the core values.  To understand this better, we must invoke a scientific principle. 

Even NASA would agree with this article

See, even NASA agrees with this article 🙂

There is a concept in physical science called Entropy, and one of its rules says quite simply that order declines into chaos.  It is a scientific way to measure disorder at the molecular level. This is a useful concept to bring to personal finance.   If the FIRE mindset represents order, then the debt-fueled high spending modern lifestyle represents chaos.

If you have order, you are among the 1% with the FIRE mindset but chances are high your partner is among the large majority of 99%, which will have people with various levels of, let’s say, ‘disorder’.  Entropy moves from order to chaos and never the reverse way.  It is a scientific truth!  So, you can understand why getting to FIRE is very challenging for two people. Mathematically, it is 100 times harder.

I Do (oh no, you don’t!)

That’s why choosing the right partner is critical.   Kids will only complicate the picture if you both don’t get on the FIRE bandwagon.  Raising a kid can be done either in a sensibly frugal way or you will be part of the USDA statistic, spending $250,000+ on “average” to raise a child.  There are so many spending decisions that you will make that this can drive you (or your partner) crazy. Each child-related decision straddles a wide cost spectrum. Take one of the first purchases for your child, a crib, for example.  With wide-ranging options from free (from your friendly neighbor whose child has outgrown it) to cheap (buying used via Craigslist) to moderate ($99 new at a discount store) to somewhat expensive (like this) to certifiably nuts (if you want a $2500 fairy tale sleep for your baby), you both will decide on a lot of things for your child.  This is just one item for your child where you can spend anywhere from $0 to $2500 or more!  Imagine a similarly wide range of options for every child-relating spending decision.

Guess what causes a child to be expensive to raise even if one partner is thrifty?  Two partners who cannot agree on what’s appropriate to spend on the child.  In such cases, the higher spending partner often wins – that’s entropy in action.

Both shoes must fit together.

Both shoes must fit together.

You may consider a library visit on a bike with your 8-year old with a quick ice cream after as a perfectly good way to spend a Saturday but your partner may feel differently.  What if the right way to enjoy the day for your significant other is to dress up like landed gentry attending the high-priced equestrian show to, you know, encourage your child to ride a pony.  And this is, of course, followed by a fine meal at an expensive restaurant to round out the experience.  

You may be OK with buying used stuff off Craigslist, but your partner might want everything new for the child, because you know, no ‘hand-me-downs’ for the little prince.  Even simple decisions can get complex with different spending choices, all folded under the garb of ‘love’ for the child.

If one of you is not among the rarefied breed of FIRE-seekers, then just like entropy, the higher spending partner often wins because of emotional reasons.  The reasons are often along the lines of…the frugal partner doesn’t want to feel cheap, the spendy partner equates the spending on a kid to a ‘must win’ emotion like love and the inevitable excuse… you can’t put a price on your child’s happiness or future.  This is especially true in many one-child households. Nothing but the best for the little prince or princess, right? After all, what are you earning for?

This can lead to a downward spiral where the partners try to one-up each other in splurging on the child to show who loves more.  Meanwhile, the kid is having a great time in that household but this sets him up for a disappointing adulthood as the child develops a strong entitlement mindset.  When the child later struggles as an adult and still cleverly plays one parent against the other (a skill learned and perfected since childhood), the sparring partners continue to blame each other so the money fight, which by now becomes blame for the grownup’s problems, continues well into their 50’s and 60’s.  The parents drag their sorry butts into miserable jobs just to make ends meet and at times, to cover for the adult child who is a financial mess.  

Choose Wisely

The table below mentions the incremental costs of increasing family size for generally cost-conscious households. The square-root (SQRT) math moderates cost increases with increasing family size – so, economies of scale kicks in to your benefit, but with one important caveat.  This square-root (SQRT) math works only if both you and your partner have similar attributes about money, spending and lifestyle.   If your money attitudes are vastly different, then this math goes out the window.  And often, so does the relationship.  Few things ‘douse’ your FIRE dream faster than divorce, as The Vigilante explains.

Family SizeExpense IndexPercent Increase over BaselineWhy?
1 SQRT(1) = 1.00 -- Baseline case. Multiply your monthly expense by the expense index to estimate total expense for family size
2 SQRT(2) = 1.41 41% more than Single Marriage (or Couple) Benefit. Economies of scale from sharing housing, food and other costs,
3 SQRT(3) = 1.73 23% more than Couple. 73% more than Single All the benefits of sharing accrue, only incremental costs for the kid.
4 SQRT(4) =2.00 Only 16% more than 3-person family. 42% more than Couple Family size doubled but cost over couple went up only 42%. More economies of scale with second child than with just one child

Did I mention the importance of choosing the right partner?  But remember entropy and the odds – they are stacked against you if you are already a FIRE-worthy adult.  If you are a FIREd couple, thank your partner (and the oddsmakers) for having similar views about money and lifestyle as you do – else, this would not have been possible. And hold on to him or her like super glue.  You both could have fared far worse!

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12 comments on “Financial Independence is Much Harder as a Couple”

  1. By Common Sense

    So, if a single guy, who buys one raffle ticket a week that has a 1% chance of winning, marries a single lady, who also buys one raffle ticket a week that has a 1% chance of winning, does the married couple have a higher, or lower, chance of winning the raffle now that the couple has 2 raffle tickets each week?

    Likewise, if a single man has a 1% chance of having “intimate relations” every single week, and similarly a single lady has a 1% chance of having “intimate relations” every single week, if they get married does their likelihood of increase or does it significantly decrease (as in your example)?

    • By TFR

      Very simple, one may say even ‘common sense’. For the raffle ticket example, your individual odds remain the same but your odds of winning as a couple double. But you are also spending twice the money as a couple.

      The other example is totally different. If your individual odds are 1% each of having intimate relations, your collective odds are 100% because you both don’t need anyone else! The first example of raffle tickets is still you both against the system but the second example is you ‘become’ the system and set the odds!

  2. By Full Time Finance

    Ultimately I lucked out with a wife of similar frugality. That being said based in studies I’m not sure it’s a purely mathematical likelihood. Studies show that finances are a top reason for divorce. I suspect likewise that financial differences probably lead to a lower liklihood of marriage in the first place. I’m not jaded enough to think people should marry based on financial beliefs, but I do suspect it plays a bigger steak in whom we choose then we realize. For example if you take your future wife on a date and your frugal you probably didn’t order the most expensive item, go to the most expensive restaurant, or pick them up in the most expensive car. They were likely OK with that to marry you, so some hurdles were already cleared.

    • By Ten Factorial Rocks (TFR)

      Good point FTF. In my experience, there can be a world of difference between how a prospective partner behaves before and after marriage. I am not saying they are necessarily putting on an act before marriage, but the perspectives and challenges of staying married changes both partners so what they had before marriage is not the same after marriage. The relationship evolves considerably and financial compatibility, even if it existed before marriage, can change later due to several factors – such is life, right? There are no guarantees to any relationship, especially marital.

  3. By Physician on FIRE

    It all depends on the partner, doesn’t it?

    If you both have a FIRE mentality, you could potentially be putting two incomes towards one goal, while needing only about 40% more to FIRE together versus going solo.


    • By Ten Factorial Rocks (TFR)

      Absolutely it does, PoF. Dual incomes can solve many issues of spending differences (that is, counter the ‘entropy’) because of the second major incoming cash flow. However, my article did not consider substantial earning partners, but cases where there is one sole or major breadwinner.

  4. By Mrs. Groovy

    Interesting perspective. I think it definitely holds true for many couples who have children. Mr Groovy and I were very lucky. Neither of us could even have been considered a 1, separately. Our stats are more like .25 + .25 = 5. We hardly spoke about finances prior to marriage. But we knew our value systems were very similar and children were not in our plans.

  5. By The Money Commando

    Interesting idea. Of course, if you really want to calculate the odds you also have to calculate the conditional probability of reaching FIRE as a couple assuming that a person who is interested in FIRE is more likely to select a mate that’s also interested in reaching FIRE. I think the .01 * .01 = .001% is true if you’re randomly selecting two people and seeing what their chances would be to achieve FIRE. As you point out, selecting the right mate is important. The kind of person who wants to lead a frugal life and achieve FIRE will likely be attracted to similar people.

    But even if a FIRE focused person marries a non-FIRE person, I think the odds are higher than you estimated. There are economies of scale to being married (sharing housing costs, food, etc.) If those savings were 1/2 devoted to saving/investing and 1/2 devoted to spending that would lead to an outcome where FIRE is reached sooner than a non-FIRE person but slower than a FIRE-focused person.

    • By Ten Factorial Rocks (TFR)

      Excellent point TMC. We must consider the ‘selection bias’, that is the conditional probability that FIRE-worthy adult will choose a similar person. However, if we consider that 50% of marriages end in divorce and large majority of divorce is due to financial reasons (say, 80%), then it applies that 40% of all marriages suffer from poor conditional probability (poor selection bias), which is huge. Applying this discount factor improves the conditional conditional probability of a Couple FIRE to 0.6% (which is far better than 0.01% with zero selection bias) but still significantly lower than individual probability of 1%.

      Consider that the SQRT cost savings formula only applies if the shared resources principle applies fully for similar minded couples/families. If the higher spending partner influences the other partner (like in ‘entropy’) to increase their outflow to match the lifestyle (“c’mon, live a little!”), then the math doesn’t get better, it gets worse.

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