How do cohabiting couples with children spend their money?

Abstract

Increasing rates of cohabitation in the United States raise important questions about how cohabitation fits in with the definition of family. Answers to this question depend in part upon the extent to which cohabitors’ behavior differs from that of other family types. Using data from the Consumer Expenditure Survey, we compare the expenditure patterns of cohabiting‐parent (n = 1,804), married‐parent (n = 33,159), divorced single‐parent (n = 7,641), and never‐married single‐parent (n = 2,893) families. We find that cohabiting‐parent families, compared to married‐parent families, spend a greater amount on 2 adult goods (alcohol and tobacco) and a smaller amount on education. Cohabiting‐parent families also differ in their spending patterns from divorced single‐parent families and from never‐married single‐parent families. Overall, our results show that cohabiting‐parent families allocate their budgets differently than do other families.

Money and Emerging Adults: A Glimpse into the Lives of College Couples’ Financial Management Practices

“…Previous research indicates that most married couples pool their money or financial resources (Malone, Stewart, Wilson, & Korsching, 2010). It is not clear why cohabitating couples are more likely to keep their money separate than married couples (Bauman 1999;Burgoyne & Morison, 2007;DeLeire & Kalil 2005;Heimdal & Houseknecht 2003;Kenney 2004). However, Burgoyne and Morison (2007) noted that cohabiting couples may be less likely to pool their income than married couples due to a fear of becoming a burden on their cohabiting partner.…”

Cohabitation History, Marriage, and Wealth Accumulation

“…Nonmarital fertility may be particularly important for wealth. Nearly 40% of nonmarital births occur within cohabitation (Bumpass and Lu 2000), and compared with married parents, cohabiting parents receive fewer financial transfers from family (Hao 1996) and spend more on personal luxuries while saving less (DeLeire and Kalil 2005). Considering that one-half of cohabiting births are unplanned (Musick 2002), many cohabiting parents may be unprepared for the financial burdens of childbirth.…”

Family Structure Outcomes of Alternative Family Definitions

“…Furthermore, at least 5% of all children live in cohabiting families and 40% of all nonmarital births occur to cohabiting couples (Raley 2001). Although there are differences between married and cohabiting individuals in terms of their money management strategies, research has indicated that cohabiting individuals tend to make substantial financial and social investments in their partners and the children who live with them (Bauman 1999;DeLeire and Kalil 2005;Kenney 2004;Stewart 2001). The exclusion of these individuals from our measures of the family automatically discounts the investments and resources that they bring to the family unit.…”