Planning Until Death Do Us Part: Partnership Status and Financial Planning Horizon

Abstract

Positive economic outcomes of marriage are often explained with a higher future orientation of married individuals who are assumed to plan their finances for a longer period than the nonmarried. Using data from the Household, Income and Labour Dynamics in Australia Survey (2001–2014; N = 4,819 individuals), the authors provide the first longitudinal test of whether individuals change their financial planning horizons when they change their partnership status using fixed and random effects regressions. Results show that the financial planning horizon increases as individuals enter cohabitation. No further changes in financial planning horizons are found when they transition into marriage. Changes in horizons are similar for women and men. These results indicate that longer financial planning horizons and marriage are likely outcomes of couples' long-term commitment, which develops during cohabitation. The symbolic and legal institution of marriage is not additionally associated with individual financial planning as a dimension of future orientation.