Would you marry for money?

Romances of the rich and famous can be extremely profitable. For the rest of us, marrying for money may be the least romantic reason to wed, but tying the knot can bring financial advantages.

Wealthy in their own right, power couple Beyoncé and Jay Z racked up a reported $US78 million ($78.5 million) in combined income in the year to May 2012, making them Forbes world’s highest paid celebrity couple this year. Individually, Forbes ranks Beyoncé and Jay Z at number 16 and 38, respectively, using its Celebrity 100 list of highest paid stars.

Second on the list, with combined earnings of $US72 million, was model Gisele Bundchen and football-star husband Tom Brady, which were Forbes highest earning star couple in 2010 to 2011.

David and Victoria Beckham jumped up one ranking into third spot this year, bringing in total earnings of $US54 million with breadwinner David earning $US46 million through his football contract and a range of endorsement deals.

All-Hollywood couple, Brad Pitt and Angeline Jolie, slipped one spot to fourth in the earning stakes this year, with combined income of $US45 million; $US5 million less than the previous year.

With last year’s Forbes fifth highest earning couple, Twilight‘s Robert Pattinson and Kristen Stewart, no longer in the mix, Will Smith and Jada Pinkett Smith moved into fifth with a total $US40 million earned this year.

Although money is not likely to be the primary reason the majority of Australian couples are married, it can make financial sense. Getting hitched can mean not only increased income but lower costs and more opportunities to save money.

Increased financial stability

Two incomes may be better than one, and not only because of a couple’s combined earning power. Should you hit a financial speed bump, such as one of you loses a job or falls ill, a second income may see you both through tough times.

Similarly, when it comes time to start a family, should one parent stay at home to raise children, the possibility of earning is always there.

Boost your borrowing potential

Sharing mortgage commitments with an income-earning partner can help you both into the property market sooner and increase your home loan serviceability.  

For instance, if you and a partner each save $30,000 to purchase a $300,000 property, a home loan of at least $240,000 will be needed. By pooling your savings, you now have a 20 percent deposit and therefore may avoid paying lender’s mortgage insurance, which is a costly additional charge imposed for those borrowing 80 percent or more of a home’s purchase price.

A larger deposit can also mean tens of thousands of dollars less interest paid in the long run.

Tax benefits

Furthermore, combining incomes can present potential tax benefits. For instance, if your partner doesn’t work or earns a low income, it may be possible to minimise your combined total tax bill by placing some or all of your investment holdings under the name of your partner. On investments such as a term deposit, the interest accrued effectively becomes tax free if your partner’s total income (including the interest) is less than $6000 a year because their marginal tax rate falls below the ATO’s lowest income tax belt.

More financial advantages

If you’re moving in together for the first time, sharing the costs of rent or the mortgage and utility bills is one advantage.

But you may also be entitled to a multi-car insurance premium reduction (this will vary between providers), shared employee benefits or a reduction in bank fees (if you share accounts, for instance).

Once you crunch the numbers with your partner, linking finances may seem less like a leap of faith and more a route to greater economic wealth.

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