Moving In Together Doesn’t Match the Financial Benefits of Marriage, but Why?

A walk down the aisle can be a route to greater wealth and prosperity for couples in the U.S. Married people have higher net worths and are more likely to be homeowners than their unmarried counterparts their age are.

The mystery, though, is why cohabitating but unmarried couples struggle to build wealth in the same way. As of 2019, the median net worth for cohabiting couples age 25 to 34 was $17,372, a quarter that of the $68,210 for married couples of that same age range, according to data from the Federal Reserve Bank of St. Louis. For singles it is $7,341.

The wealth gap between partnered and married couples is larger than one might expect, said Ana Kent, a senior researcher at the St. Louis Fed. “It’s so intriguing,” she said.

Over the past two decades, Americans are moving in together at higher rates, according to data from Pew Research Center. The share of U.S.adults who are currently married steadily declined from close to 60% in the 1990s to under half in 2019, according to Pew. Over the same period, the share of adults age 18 to 44 living with a partner climbed to 59%.

Many young couples now approach marriage as a “capstone” event, said Andrew Cherlin, professor emeritus of sociology and public policy at Johns Hopkins University, who studies marriage.

“If you build an arch, the cornerstone is the first piece you put in and the capstone is the last,” he said. “What this means is people see an economic bar they need to clear before they get married. Couples wait until they have good jobs, a car that won’t break down, maybe even a house. Then, they get married.”

Melissa Mowery, a 30-year-old communications manager in Asheville, N.C., has been with her boyfriend for five years and living together for nearly four. The two don’t share a joint bank account, but they split the cost of rent and other bills. Even so, Ms. Mowery said she can’t make sense of the financial gap between her relationship and that of married couples.

“We’re already saving a lot of money and splitting the cost on most things,” she said. “I don’t understand how married couples are accumulating wealth in a way we’re not doing.”

While there are legal and tax benefits to marriage, research suggests the financial security and long-term mind-set of those who tie the knot may also be a powerful driver of wealth. More married couples pool their money—such as sharing savings accounts and investing together—to achieve certain goals, Ms. Kent said. Cohabiting couples are less likely to combine finances and investments.

Working with two incomes and combining their investments to maximise compound interest can significantly increase a couple’s financial prospects, said Emily Garbinsky, associate professor of marketing at Cornell University, who has studied couples’ financial behaviour. Simply put, married people may be more likely to be on the same page financially, she said.

“Married people may be much more likely to have these conversations around what goals they have for their financial future,” she said. “There seems to be something very special and unique about deciding to share finances.”

Unmarried couples may be less willing to commingle their money, said Prof. Garbinsky.

“Our money, our income, represents a huge part of who we are,” she said. “[Sharing] that can be scary for people, so they tend to be very protective.”

Photos: Teaming Up for the Homeownership Dream

Both married and unmarried couples who do pool finances also experience greater relationship satisfaction and may even stay together for longer, Prof. Garbinsky said.

Housing is one of the biggest factors in establishing a couple’s wealth. Compared with single people and cohabiting couples, married couples hold a larger concentration of housing wealth, according to data from the St. Louis Fed.

“Most of my married friends have bought a house,” Ms. Mowery said, noting high housing costs in her area. “I just don’t know how they did it. Everyone talks about how when you get married, you accumulate wealth but I don’t know what that means.”

In the current hyper competitive housing market, as smaller, more affordable starter homes vanish and housing affordability declines, single people and cohabiting couples are often at a disadvantage.

“These [housing] prices are so high that you really need pooled resources to be competitive in some of these markets,” said Lowell Ricketts, a data scientist at the St. Louis Fed.

Socioeconomic factors play a role in the difference between married and partnered wealth; the higher your income, the likelier it is that you’ll marry, a 2017 report by the American Enterprise Institute found.

Plotting a path forward as a couple without much money isn’t as easy as getting hitched and suddenly seeing your wealth grow, Prof. Cherlin said.

“Someone looking at the data would say, ‘Well, these married people are much more successful than their cohabiting people. If these people would just get married, they’ll do better,’” he said. “Whether or not there is truth in that, people don’t tend to believe in it anymore. People who aren’t doing well financially don’t see a clear path to financial success.”

Marriage rates are lower among Black and Latino groups, and those same households of similar ages held far less wealth than their white counterparts, whether married or partnered. Family structure also influences the overall net worth of a household. Partnered couples with young children tend to have less wealth than partnered couples without children.

Some cohabitating couples are refashioning their financial goals. Instead of buying a house, Ms. Mowery and her partner recently looked into a house share that would allow them to spend part of the year working from Belize. They have discussed getting married, although haven’t made plans to do so any time soon.

“I care a little bit less than I thought I would about marriage,” she said. “Once you start living together, it almost feels like you made that commitment.”

Looking to build, or renovate, a home in 2024? You’re not alone. According to a recent study from Resolve Finance, over a third of Australian homeowners are planning to renovate their current properties in the next 12 months. And if the Federal Government achieves its ambitious goal of delivering 1.2 million new dwellings over the next five years, there will be many new home owners looking to build their dream home in 2024 and beyond.

But before tackling such a behemoth task, considering all the latest—and future—architectural trends is pivotal in your new build’s success. Award-winning architect and interior designer, Georgina Wilson said sustainability will be at the forefront for many interested in energy efficiency and saving money on power bills.

“Elements of passive design are moving into the mainstream. Improvements in the technology with double glazing, building wrapping and insulation are meaning that more people have access to these materials,” Ms Wilson said. “Solar has proven itself and homeowners are now looking for other ways to make their home more efficient.”

The following eight trends reflect a growing emphasis on sustainability, flexibility, and wellbeing in residential architecture, catering to the evolving needs and preferences of homeowners in 2024.

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1). Consider your colour palette

The colours you use say everything about the type of spaces you want to foster, whether they be bright and warm, dark and moody, neutral — the list goes on. If we’re looking to trends, earthy, calming neutrals are in — think brown, beige and eucalyptus green. Colours that feel natural and soft, but welcoming provide an inviting environment that’s easy to live with.

However, interior designer and stylist, Jono Fleming said contrast is important to create interest and one of the most powerful ways to do this is through colour.

“It doesn’t have to be a big splash of colour, it could be introduced through smaller decorative objects, a statement furniture piece or an artwork, but the colour should add balance to the space,” he said.

2). Modern, outdoor living areas

Ever since the COVID pandemic and subsequent lockdowns, expanding living spaces to the outdoors has gained in popularity. Features like plant-filled front porches, outdoor kitchens, fire pits, and cosy seating areas create inviting spaces for relaxation and entertainment for all family members.

“There has definitely been a greater appreciation for outdoor living spaces since COVID,” said Ms Wilson. “Outdoor fabrics and mechanisms for shading have greatly improved in recent years allowing people to fully embrace seamless indoor/outdoor living.”

3). The integration of smart technology

Integrating smart home technology throughout your home continues to gain traction with homeowners. As we increasingly look to rely on technology to make our lives all the more seamless, smart technology throughout allows homeowners to control a variety of tasks and zones remotely, enhancing convenience, security, and even energy efficiency. This can include controlled heating and cooling from your phone, automatic lightning, voice control commands, and more.

“The technology for seamless appliances has come a long way. At Salone del Mobile Milano this year, we experienced the new Gaggenau fully integrated induction bench top, which in terms of kitchen design, is a huge advancement,” said Ms Wilson.

Gaggenau, the German manufacturer of high-end home appliances, is at the forefront of smart home technology, paving the way for intelligent cooking appliances that learn and adapt to user preferences. Gaggenau’s essential induction cooktop, the functional and seamless cooking surface Ms Wilson speaks of (pictured below), is designed to be “seamlessly integrated into a kitchen’s worktop”.

4). Health and wellness features

Prioritising health and wellness in 2024 is paramount, and home design that can include features like air purification systems, dedicated exercise spaces, recovering hubs—like saunas and ice baths—and relaxation areas to support physical and mental wellbeing will go a long way in not only adding value to your home, but providing a space that is architecturally on-trend and with the times.

“I’m seeing a lot of demand for in-built saunas, both traditional and infrared, particularly in the homes of our US clients,” said Ms Wilson.

“Bathroom suppliers such as Kohler, Duravit and Toto are offering increasingly sophisticated products that incorporate an almost spa-like experience in your at home bathroom. Examples of this are fantastic multi-nozzle showers and steam showers, Japanese toilets incorporating bidet technology, and elegant and serene bathroom furniture that can be fully customised for clients.”

5). Sustainability is key

A common goal among homeowners and future buyers alike is to own a property that is flexible enough grow with them. Futureproofing your home with sustainable measures will not only ensure its longevity, but it will help homeowners to play their part in addressing their carbon footprint.

“The current cost of living crisis is leading to a lot more multigenerational living, meaning families are prioritising durable materials and sustainable power sources, like solar,” said Ms Wilson.

Consider adding solar panels to your home, utilising sustainable materials in any upcoming renovations or builds, like recycled timber, and utilising energy-efficient lighting throughout your home.

6). Minimalist design

Do as the Scandinavians do – introduce minimalist design into your home. Embrace simplicity and clean lines with a focus on interior design. Decluttering in main living spaces is surprisingly effective. Adopting the approach of ‘Swedish Death Cleaning’, which essentially involves slowly ridding your house of unwanted or unused items once you reach the other side of 50, will also help you whittle your possessions down to the beautiful and the necessary.

Minimalist design in home appliances is also making a resurgence in 2024 according to Ms Wilson.

“What I’ve been interested to see at Salone del Mobile Milano in 2024 is a huge return to stainless steel finishes, and more and more seamless integration of appliances,” said Ms Wilson.

“We’re seeing timeless materials in reimagined applications: copper baths and stainless steel basins are emerging trends with the potential to be timeless. These materials are so practical, and pair beautifully with natural stone and timbers.”

Above all, maximising different spaces through efficient and effective storage options will also do wonders in achieving that minimal aesthetic.

7). Multifunctional spaces

As we move towards greater efficiency of space, it’s useful to consider multifunctional spaces throughout your home. In 2024, we are seeing more homes incorporate multifunctional spaces and trends. This includes using multifunctional furniture in main bedrooms or living spaces—furniture that can act as storage ottomans or convertible sofa beds—as well as transforming wasted space, and open up indoor to outdoor living.

“Multifunctional spaces in homes are a great idea. Particularly in small homes, it makes a lot of sense to achieve maximum value out of the limited space available. The way you use a space can change as your family evolves over time, so it’s always good to design in such a way that allows for flexibility,” said Ms Wilson.

“Make sure that the functions you allocate to a single room are compatible with the space available and each other. For example, it works really well to combine a living room, a dining room and a kitchen in one open plan space because these are all public, lively spaces. It doesn’t work very well to combine, say a study, with these spaces because you will want control over the visual and acoustic privacy in a study.”

8). Think about biophilic design

A buzz word among architects and interior designers, biophilic design is one of the strongest trends in 2024 thanks to its benefits in garnering a sense of harmony and connection between your home and the environment. Consider incorporating natural elements into home design, such as large windows to maximise natural light, indoor gardens, and natural materials like wood and stone.

“Biophilic design is a timeless principle, in that home design should connect people in a positive way with their natural environment by maximising access to, and the ability to control, natural light and ventilation, which really helps to create an enjoyable (and healthier) environment to live in,” said Ms Wilson.

“Increasingly, there is a demand for this positive relationship to the natural environment; by leaning on the principles of biophilic design, you can create a haven and retreat at home that can help with the daily stresses of life.”

Ways to foster that indoor-outdoor connection can be through the addition of smaller internal courtyard spaces filled with greenery, or incorporating indoor plants and adding greenery into different rooms throughout your home.

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Moving In Together Doesn’t Match the Financial Benefits of Marriage, but Why?

Married couples are four times as wealthy as unmarried couples who live together

Photos: Teaming Up for the Homeownership Dream

Futureproof your home and maximise your return with design directions that focus on contemporary ways of living