Recipe for Wealth: Live Together Before Marriage?

Recipe for Wealth: Live Together Before Marriage?

Pop quiz: Which of the following is proven to likely double the rate at which you and your significant other accumulate wealth?

A) Max out our 401(k) contributions and establish a foundation to promote world peace
B) Cut out cable, make our own lattes and sew all our own clothing
C) Get master's degrees and Ph.D.'s and read The Economist
D) Move in together

Recent research supports answer D (though we don't see how the others could hurt).

A new study says that couples who move in together before marrying accumulate wealth at double the rate of those who wait until marriage to live together.

The obvious conclusion is that this happens because cohabitation roughly halves the couple's rent and utilities.

But a lot of less tangible factors could be at play. The authors point out that about half of cohabitations that result in marriage tend to be white couples with high earnings potential. So, it could be that an already financially well-off group is attracted to living together before marriage.

Another explanation is that many couples prefer to get married when they are economically secure. Moving in together could spur them to change their financial habits, which would then lead them to start growing their wealth.

Either way, this study does not make moving in together a slam-dunk solution for your financial problems. We've written about both the financial pros and the financial cons of cohabitation: While this study is interesting, it should just be one of several factors you weigh carefully when making your decision.

More From LearnVest

Speaking of growing your wealth, our reader Carla saved $10,000 in less than three years on a $40,000 salary.
There's yet another way you could grow your wealth: Sign up for Take Control Bootcamp.
Already earning more? Learn some different ways you can give back all year long.

Learnvest

Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!