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The 3 biggest money decisions you’ll ever make

Married couples typically have about four times the

Married couples typically have about four times the wealth of households headed by single people, experts say. Photo Credit: Getty Images/iStockphoto / zimmytws

Some factors that influence your financial success are beyond your control.

But the decisions you make about three key areas in your life can have an outsize impact on whether you’re able to build financial stability.

How much education you get

People with more education tend to earn more money and accumulate more wealth.

Median net worth for families headed by people 40 and older — when most have completed their educations — grew most rapidly from 1989 to 2013 for the most educated and shrank for the least educated, according to a study by economists at the Federal Reserve Bank of St. Louis.

By 2013, median net worth:

  • Soared 45 percent to $689,100 for those with graduate or professional degrees
  • Rose 3 percent to $273,488 for those with two- or four-year degrees
  • Dropped 36 percent to $95,072 for those with high school diplomas
  • Fell 44 percent to $37,766 for those who didn’t finish high school

Whether you get (and stay) married

People who marry and don’t divorce have about double the net worth of their peers who never wed, according to Jay Zagorsky, an economist and research scientist at Ohio State University, who studied the financial patterns of thousands of adults born from 1957 to 1964. That means married couples typically have roughly four times the wealth of households headed by single people.

The net worth of people who divorce starts to plunge four years before the split, Zagorsky’s research published in 2005 found. Ten years later, divorced men and women are still worse off financially than the never-marrieds.

Whether you own a home

The decision that can have the biggest impact on your wealth is whether you buy a home — and hang on to it.

The wealth gap between homeowners and renters is enormous. The median net worth of the nation’s homeowners in 2013 was $195,400, compared with $5,400 for those who don’t own, according to a Federal Reserve Board survey. Rising home values can build wealth, of course, but so does the forced savings aspect of owning a home.

Accumulating down payments and paying down mortgages will increase homeowners’ equity — and thus their wealth.

Even if you’re a divorced renter without a degree, you can build wealth if you monitor spending, save regularly and invest for the future. The odds may be against you, but you can beat them.

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