Understanding Your Marital Worth

January 26, 2010 by thinkhappy

UNDERSTANDING YOUR MARITAL WORTH

YOUR EARNING POWER:

How do you determine your earning power?

Earning power in a marriage consists of:

1. Income earned through employment, Social Security benefits

2. Savings achieved through cutting costs, freeing up income

3. Potential future earnings and retirement income

This article will take a look at evaluating the earning power of value #2.

ADDING TO SAVINGS, FREEING UP INCOME:

You and your husband have built an economic partnership and in many cases have raised a family together. Even if you don't have a paying job, understand that you still have part ownership of the household income. If your husband is the sole money maker, that money is not strictly his to control. He wouldn't be able to work full-time, take care of the children and manage the household all on his own without creating more expenses, so you make an economic contribution to the marriage by performing tasks that don't cost the household anything. You create income, not only by performing tasks he'd have to pay for, but by freeing up money to pay for other expenses or to put into savings. The total household income, even if you don't have a job for pay, is an important part of your personal income calculation and worth. To illustrate this value, make a list of the tasks you perform regularly that result in monthly cost savings for the household:

JOB AVERAGE OUTSIDE COST (Monthly)

Example Yours

Transportation 100

Housekeeping 200

Cooking 400

Laundry 200

Tutoring 100

Elder Parent Care 200

Other

TOTAL(After-tax dollars) $2000

Using these sample figures, in order to have the $2,000 per month to pay someone to do these tasks, you would have to earn approximately $2,500 per month before taxes. In this case your efforts would result in cost savings equivalent to earning $30,000 per year. You can insert your own tasks and calculate your monthly cost savings contribution. Even if you don't have a paying full-time job, you provide real economic value to the household by lowering expenses, and therefore have real personal economic worth in the relationship. You need to recognize and embrace this value.

Be advised that any individual who earns income can establish an individual retirement account (IRA) and contribute up to $5,000 annually, and that any husband (or wife) who is eligible to set up an IRA can also create a spousal IRA for a non wage-earning spouse up to the same amount. If you are over 50 years old, you can contribute up to an additional $1,000 per year. So, if your husband is the primary wage earner, speak to him about setting up an IRA for you, if he hasn't already.

Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

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