Shacking up before marriage could be making you poorer

Ladders.com had a good recent article on the subject of whether moving in together without marriage may make you poorer in the long term. From the article -

"Couples often move in together as the step before getting married – or an alternative to marriage. Today, two-thirds of unmarried couples choose this option. Some do it to save money, on rent, utilities, and other shared household expenses. However, while living together might save couples money in the short term, it hurts them financially in the long term, according to research from Iowa State and Kansas State universities.

The data does not explain why the wealth gap exists, but researchers say the instability of cohabitation and the lack of legal protections contribute. If unmarried, cohabiting couples split up, their assets are more likely to get divided up unequally – unlike in divorce, which has legal protections. Also, unmarried couples are unlikely to sink their money into more stable financial options like retirement funds or a house, and are more likely to spend their money on things that rapidly depreciate, like furniture or cars.

To protect each party’s assets should they split up, Dorius recommends a cohabitation agreement, similar to a prenuptial agreement.”

The full article is here.

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