Money Talks: Love and Money in February
Some people might insist that “true love” is free, but anyone who’s been in a relationship for a significant amount of time will tell you that it most certainly is not!
From the time you go on your first date to your golden years in retirement, living life together as a couple is expensive. There may be weddings to plan, special occasions to celebrate, and costs to raise children. So how can you be ready to handle all these expenses? The good news is that these events won’t happen all at once. Most of these special occasions will only come up once a year, and some only once in a lifetime. Overall, the trick is to set a budget as a couple and then stick to it. By incrementally saving and investing, you’ll be amazed at how your funds may grow over a lifetime. With careful planning and a trusted financial advisor, the gift of love in a lifetime can be yours.
Let’s take a look at some “love life” events and see if you can guess how much each one will cost.
Do men or women tend to spend more on each other for Valentine’s Day?
The answer is men, according to the National Retail Federation.
On average, men spend about $235 on Valentine’s Day gifts, while women only spend around $119. Among both genders combined, there is a significant difference in spending by age. Gen Z spends an average of about $208 on Valentine’s Day gifts, compared with $280 for Millennials and $103 for Boomers. These differences may reflect how incomes change as people age. Women are more likely than men to commemorate Valentine’s Day by treating themselves. According to the NRF study, almost a quarter of women who bought flowers for the holiday did so for themselves.
What is the typical cost of an engagement ring?
The answer is $6,000, according to the wedding planning site The Knot.
Keep in mind that this fact is in no way connected to that old, outdated myth that you should spend “three months’ salary” on an engagement ring. Above all, just spend whatever you’re comfortable spending, and don’t break the bank in the process.
How much does it cost to raise a child (up to age 18)?
The answer is $233,610, according to the US Department of Agriculture.
Sadly, this figure does not include the cost of college. It’s assuming an average middle-class family will spend roughly $12,350-$13,900 per year per child for food, clothes, daycare, and basic education. New parents can expect to spend more in the first year of a child’s life. A New York Life article points to the initial year of raising a child ranging from $20,000 to $50,000, depending on location, parents’ socioeconomic status of parents, and other factors.
About what percentage of their pre-retirement income do you think a couple needs to retire comfortably?
The answer is 80%, according to an article from The Motley Fool.
The article claims you probably won’t need to replace 100% of your pre-retirement income because you typically can reduce some of your pre-retirement expenses, such as commuting, mortgage, or life insurance. However, the 80% target isn’t perfect for everyone. It’s important to consider your health, lifestyle, savings, and other sources of income to determine your target retirement figure.
Source: https://www.financialeducatorscouncil.org/wp-content/uploads/Love_Life_Events_Article_&_Quiz.pdf