Can Cohabitation Make You Poorer?

Or are poorer people drawn to cohabitation?

According to the Pew Research Center’s 2016 report, more than 18 million unmarried U.S. couples live together.

23% of all cohabitors are 50 years old or older.

50% are younger than 35.

Although it’s becoming more common for unmarried couples to live together, U.S. cohabitors total only about 7% of the population.

As of 2016, 14% of Americans ages 25-34 were living together.

The Financial Implications of Cohabitation Among Young Adults,” published by the Journal of Financial Planning, makes several assertions about debt, money, and the link between cohabitation.

You can read more here

Does cohabitation make people poorer?

Surprisingly, it actually can!

And it depends.

ONE: Couples who choose to delay or opt out of marriage in their early years may be less financially prepared for retirement in later years.

TWO: Couples with consumer debt are more likely to cohabitate before marriage, but combining consumer debt is actually linked with a higher risk of breaking up.

Alternatively, couples who purchased a home together transitioned into marriage from cohabitation at greater rates than peers who did not.

Data supports the position that unmarried couples who live together have greater consumer debt, have lower net worth, and are more economically disadvantaged.

THREE: The study found that cohabitors have lower net worth and financial accumulation than married participants.

For unmarried couples, the legal guidelines for dividing assets from a separation can be difficult to follow. For this reason, unmarried couples may choose not to create joint accounts, not to purchase homes, and not to invest in joint retirement accounts.

Similarly, it can be more difficult for cohabitors to separate jointly acquired assets.

“In most states, for example, a boat purchased by a married person is owned 50% by each spouse regardless of contribution, whereas a boat purchased by a cohabiting person is owned by the person who made the contribution.”

As to be expected (perhaps), individual wealth follows patterns that are similar to the individual’s parents’ wealth.

FOUR: Married participants who had never cohabited accrued the greatest financial assets.

In “Living Together Before Marriage Impacts Your Finances,” Susannah Snider dissects the results of a 1997 longitudinal study completed by the National Longitudinal Survey of Youth.

It found that unmarried couples who lived together had lower net worth and less financial assets than their married counterparts.

  • According to this study, first-time cohabitors had $26,927 less wealth.
  • Repeat cohabitors had $33,809 less wealth.
  • Married couples who had previously lived with partners before marriage had $18,265 less wealth.

Does cohabitation make people poorer or are poorer people drawn to cohabitation?

Experts know these questions don’t explain the full picture.

It’s important to understand the factors that impact every couple’s financial relationship.

  1. How was your financial health prior to your relationship?
  2. What is your family’s financial background?
  3. Were finances (wealth-building or debt) a factor in your decision to move in together?

Unmarried couples who chose to live as married couples: combining assets, purchasing homes, planning for retirement together, etc. fared better than couples who chose not to combine accounts.


Only you can decide whether or not you and your partner should live together.

Undoubtedly, your personal values, family values, beliefs, religious views, relationship status (divorced, widowed, etc.), and age impact your decision.

Data supports the position that unmarried couples who live together have greater consumer debt, have lower net worth, and are more economically disadvantaged.

Due to complex and confusing laws about dividing assets for unmarried couples, some couples choose to forego these financial hurdles altogether.

It is not clear whether cohabiting couples are less financially secure because living together forces them to delay acquiring wealth, or whether cohabiting couples were already less wealthy than their married counterparts, prior to living together.

Does cohabitation make people poorer?

Surprisingly, it actually can!

And it depends.

Does cohabiting make you poorer, statistically speaking, than married couples who didn’t live together first?

Arguably, yes (but this is correlation not causation).

Moreover, this is more likely the case among couples whose financial literacy and/or financial assets were more limited than their peers’ prior to moving in together.

Does cohabiting make you poorer, statistically speaking, than single people?

Like, are you poorer in your existing relationship now—all things considered—than you would have been if you were single?

I’m not sure.

Can you write a guest post about it and get back to me?

The greater truth might be that poorer couples cohabitate at a greater frequency than wealthier people.

(But that’s hella triggering.) [Should We Stop Saying Triggered?]

We need to have a conversation about money.

Author: Anj.

Hi! I'm Anj. Thanks for visiting my page. I'm an aspiring writer, former teacher, and Houston native. I've worked in education for more than 15 years. This blog was inspired by (1) my first year teaching experiences and (2) my lovely student loan debt. Feel free to connect if you'd like to share a story about race, power, or privilege.