Skip to main content

Financial Integration and Relationship Transitions of Young Adult Cohabiters

Abstract

Despite increasing rates of pre-marital cohabitation, the majority of research on household financial practices in the United States has focused on married couples. This study explored ways young adult cohabiters (N = 691) financially combined their lives and the associations with subsequent relationship outcomes. Results indicated cohabiters were intertwining credit histories and bank accounts, and acquiring assets such as purchasing homes together. Sharing a mortgage was associated with an increased likelihood of marriage, whereas joint credit card accounts increased the odds of dissolution. Cohabiters with an intent to marry were much more likely to start integrating their finances prior to marriage. This study sheds light on the heterogeneous ways that a recent cohort of young adult couples manages their finances and navigates relationships.

This is a preview of subscription content, access via your institution.

Notes

  1. 1.

    https://www.nlsinfo.org/content/cohorts/ NLSY79-Children.

  2. 2.

    There is one exception, the ten states that permit common law marriages: Alabama, Colorado, Iowa, Kansas, Montana, Rhode Island, South Carolina, Texas, Utah, and the District of Colombia) (Cornell Law).

  3. 3.

    Community property laws only recognize marital unions. There are currently nine community property states in the US: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin; Alaska requires both partners opt-in (IRS).

  4. 4.

    There was a 2012 wave of data, however, only 88 of the 340 still cohabiting with their partner in 2010 were also interviewed in the 2012. Such high attrition makes incorporating this information into the analysis prohibitive.

References

  1. Addo, F. (2012). Ethnoracial differences in early union experiences among young adult women. Review of Black Political Economy, 39(4), 427–444. doi:10.1007/s12114-012-9138-2.

    Article  Google Scholar 

  2. Addo, F. (2014). Debt, cohabitation, and marriage in young adulthood. Demography, 51(5), 1677–1701. doi:10.1111/j.1741-3729.2010.00612.x.

    Article  Google Scholar 

  3. Addo, F., & Sassler, S. (2010). Financial arrangements and relationship quality in low-income couples. Family Relations, 59(4), 508–523. doi:10.1111/j.1741-3729.2010.00612.x.

    Article  Google Scholar 

  4. Ashby, K. J., & Burgoyne, C. B. (2008). Separate financial entities? Beyond categories of money management. Journal of Socio-Economics, 37(2), 458–480. doi:10.1016/j.socec.2006.12.035.

    Article  Google Scholar 

  5. Avellar, S., & Smock, P. J. (2005). The economic consequences of the dissolution of cohabiting unions. Journal of Marriage and Family, 67(2), 315–327. doi:10.1111/j.0022-2445.2005.00118.x.

    Article  Google Scholar 

  6. Bellah, R. N., Madsen, R., Sullivan, W. M., Swidler, A., & Tipton, S. M. (1985). Habits of the heart: Individualism and commitment in American life. New York: Harper & Row.

    Google Scholar 

  7. Bennett, F. (2013). Researching within-household distribution: Overview, developments, debates, and methodological challenges. Journal of Marriage and Family, 75(3), 582. doi:10.1111/jomf.12020.

    Article  Google Scholar 

  8. Beverly, S. G., McBride, A. M., & Schreiner, M. (2003). A framework of asset-accumulation stages and strategies. Journal of Family and Economic Issues, 24(2), 143–156. doi:10.1023/A:1023662823816.

    Article  Google Scholar 

  9. Blakely, S. S. (1981). Credit opportunity for women: The ECOA and its effects. Wisconsin Law Review. 655-696. Retrieved from http://heinonline.org.

  10. Bowman, C. G. (2010). Unmarried couples, law, and public policy. New York: Oxford University Press.

    Google Scholar 

  11. Brines, J., & Joyner, K. (1999). The ties that bind: Principles of cohesion in cohabitation and marriage. American Sociological Review, 64(3), 333–355. doi:10.2307/2657490.

    Article  Google Scholar 

  12. Brown, S. L. (2000). Union transition among cohabitors: The significance of relationship assessments and expectations. Journal of Marriage and the Family, 62(3), 833–846. doi:10.1111/j.1741-3737.2000.00833.x.

    Article  Google Scholar 

  13. Brown, S. L. (2003). Relationship quality dynamics of cohabiting unions. Journal of Family Issues, 24(5), 583–601. doi:10.1177/0192513X03252671.

    Article  Google Scholar 

  14. Brown, S. L., & Booth, A. (1996). Cohabitation versus marriage: A comparison of relationship quality. Journal of Marriage and the Family, 58(3), 668–678. doi:10.2307/353727.

    Article  Google Scholar 

  15. Burgoyne, C. B., Clarke, V., Reibstein, J., & Edmunds, A. (2006). ‘All my worldly goods I share with you’? Managing money at the transition to heterosexual marriage. The Sociological Review, 54(4), 619–637. doi:10.1111/j.1467-954X.2006.00663.x.

    Article  Google Scholar 

  16. Burgoyne, C. B., & Morison, V. (1997). Money in remarriage: Keeping things simple and separate. Sociological Review, 45(3), 363–395. doi:10.1111/1467-954X.00069.

    Article  Google Scholar 

  17. Burgoyne, C. B., Reibstein, J., Edmunds, A., & Dolman, V. (2007). Money management systems in early marriage: Factors influencing change and stability. Journal of Economic Psychology, 28(2), 214–228. doi:10.1016/j.joep.2006.02.003.

    Article  Google Scholar 

  18. Coleman, M., Ganong, L., & Fine, M. (2000). Reinvestigating remarriage: Another decade of progress. Journal of Marriage and Family, 62(4), 1288–1307. doi:10.1111/j.1741-3737.2000.01288.x.

    Article  Google Scholar 

  19. Cornell Law Marriage Laws: Marriage Laws of the Fifty States, District of Columbia and Puerto Rico. Retrieved from https://www.law.cornell.edu/wex/table_marriage.

  20. Dew, J. (2007). Two sides of the same coin? The differing roles of assets and consumer debt in marriage. Journal of Family and Economic Issues, 28(1), 89–104. doi:10.1007/s10834-006-9051-6.

    Article  Google Scholar 

  21. Dew, J. (2011). Financial issues and relationship outcomes among cohabiting individuals. Family Relations, 60(2), 178–190. doi:10.1111/j.1741-3729.2010.00641.x.

    Article  Google Scholar 

  22. Dew, J., & Price, J. (2011). Beyond employment and income: The association between young adult’s finances and marital timing. Journal of Family and Economic Issues, 32(3), 424–436. doi:10.1007/s10834-010-9214-3.

    Article  Google Scholar 

  23. Dynan, K. (2009). Changing household financial opportunities and economic security. The Journal of Economic Perspectives, 23(4), 49–68. Retrieved from http://www.jstor.org/stable/27740555.

  24. Evertsson, L., & Nyman, C. (2014). Perceptions and practices in independent management: Blurring the boundaries between “Mine”, “Yours” and “Ours”. Journal of Family and Economic Issues, 35(1), 65–80. doi:10.1007/s10834-012-9348-6.

    Article  Google Scholar 

  25. Gibson-Davis, C. M. (2009). Money, marriage, and children: Testing the financial expectations and family formation theory. Journal of Marriage and Family, 71(1), 146–160. doi:10.1111/j.1741-3737.2008.00586.x.

    Article  Google Scholar 

  26. Gibson-Davis, C. M., Edin, K., & McLanahan, S. (2005). High hopes but even higher expectations: The retreat from marriage among low-income couples. Journal of Marriage and Family, 67(5), 1301–1312. doi:10.1111/j.1741-3737.2005.00218.x.

    Article  Google Scholar 

  27. Guzzo, K. B. (2014). Trends in cohabitation outcomes: Compositional changes and engagement among never-married young adults. Journal of Marriage and Family, 76(4), 826–842. doi:10.1111/jomf.12123.

    Article  Google Scholar 

  28. Hayford, S. R., & Morgan, S. P. (2008). The quality of retrospective data on cohabitation. Demography, 45(1), 129–141. doi:10.1353/dem.2008.0005.

    Article  Google Scholar 

  29. Heimdal, K. R., & Houseknecht, S. K. (2003). Cohabiting and married couples’ income organization: Approaches in Sweden and the United States. Journal of Marriage and Family, 65(3), 525–538. doi:10.1111/j.1741-3737.2003.00525.x.

    Article  Google Scholar 

  30. Internal Revenue Service Publication 555-Introductory Material. Retrieved from https://www.irs.gov/publications/p555/ar01.html.

  31. Kennedy, S., & Bumpass, L. (2008). Cohabitation and children’s living arrangements: New estimates from the United States. Demographic Research, 19, 1663–1692. Retrieved online from http://www.demographic-research.org/volumes/vol19/47.

  32. Kenney, C. (2004). Cohabiting couple, filing jointly? Resource pooling and U.S. poverty policies. Family Relations, 53(2), 237–247. doi:10.1111/j.0022-2445.2004.00014.x.

    Google Scholar 

  33. Kenney, C. T. (2006). The power of the purse: Allocative systems and inequality in couple households. Gender & Society, 20(3), 354–381. doi:10.1177/0891243206286742.

    Article  Google Scholar 

  34. Kuperberg, A. (2014). Age at coresidence, premarital cohabitation, and marriage dissolution: 1985–2009. Journal of Marriage and Family, 76(2), 352–369. doi:10.1111/jomf.12092.

    Article  Google Scholar 

  35. Lauer, S. R., & Yodanis, C. (2011). Individualized marriage and the integration of resources. Journal of Marriage and Family, 73(3), 669–683. doi:10.1111/j.1741-3737.2011.00836.x.

    Article  Google Scholar 

  36. Lichter, D. T., Turner, R. N., & Sassler, S. (2010). National estimates of the rise in serial cohabitation. Social Science Research, 39(5), 754–765. doi:10.1016/j.ssresearch.2009.11.002.

    Article  Google Scholar 

  37. Lundberg, S., & Pollak, R. A. (2013). Cohabitation and the uneven retreat from marriage in the US. In L. P. Boustan, C. Frydman, & R. A. Margo (Eds.), Human capital in history: The American record (pp. 1950–2010). Chicago: University of Chicago Press.

    Google Scholar 

  38. Manning, W. D. (2013). Trends in cohabitation: Over twenty years of change, 1987. Studies, 54, 29–41. Retrieved from http://www.bgsu.edu/content/dam/BGSU/college-of-arts-and-sciences/NCFMR/documents/FP/FP-13-12.pdf.

  39. Manning, W., & Smock, P. J. (2005). Measuring and modeling cohabitation: New perspectives from qualitative data. Journal of Marriage and Family, 67(4), 989–1002. doi:10.1111/j.1741-3737.2005.00189.x.

    Article  Google Scholar 

  40. Nock, S. (1995). Commitment and dependency in marriage. Journal of Marriage and the Family, 57(2), 503–514. Retrieved from http://www.jstor.org/stable/353702.

  41. Oropesa, R. S., & Landale, N. (2005). Equal access to income and union dissolution among mainland Puerto Ricans. Journal of Marriage and Family, 67(1), 173–190. Retrieved from http://www.jstor.org/stable/3600144.

  42. Oropesa, R. S., Landale, N. S., & Kenkre, T. (2003). Income allocation in marital and cohabiting unions: The case of mainland Puerto Ricans. Journal of Marriage and Family, 65(4), 910–926. Retrieved from http://www.jstor.org/stable/3599899.

  43. Pahl, J. (1989). Money and marriage. London: Macmillan Education Ltd.

    Book  Google Scholar 

  44. Pahl, J. (2008). Family finances, individualisation, spending patterns and access to credit. The Journal of Socio-Economics, 37(2), 577–591. doi:10.1016/j.socec.2006.12.041.

    Article  Google Scholar 

  45. Painter, M. A, I. I., & Vespa, J. (2012). The role of cohabitation in asset and debt accumulation during marriage. Journal of Family and Economic Issues, 33(4), 491–506. doi:10.1007/s10834-012-9310-7.

    Article  Google Scholar 

  46. Perelli-Harris, B., & Gassen, N. S. (2012). How similar are cohabitation and marriage? The spectrum of legal approaches to cohabitation across Western Europe. Population and Development Review, 38(3), 435–467. doi:10.1111/j.1728-4457.2012.00511.x.

    Article  Google Scholar 

  47. Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891. doi:10.3758/BRM.40.3.879.

    Article  Google Scholar 

  48. Robins, J. M., Rotnitzky, A., & Zhao, L. P. (1994). Estimation of regression coefficients when some regressors are not always observed. Journal of the American Statistical Association, 89(427), 846–866. doi:10.1080/01621459.1994.10476818.

    Article  Google Scholar 

  49. Rohe, W. M., & Watson, H. L. (Eds.). (2007). Chasing the American dream: New perspectives on affordable homeownership. Ithaca, NY: Cornell University Press.

    Google Scholar 

  50. Romo, L. K. (2014). “These Aren’t Very Good Times”: Financial uncertainty experienced by romantic partners in the wake of an economic downturn. Journal of Family and Economic Issues, 35(4), 477–488. doi:10.1007/s10834-014-9389-0.

    Article  Google Scholar 

  51. Rubin, D. B. (1996). Multiple imputation after 18+ years. Journal of the American Statistical Association, 91(434), 473–489. doi:10.1080/01621459.1996.10476908.

    Article  Google Scholar 

  52. Rubin, D. B. (2004). Multiple imputation for nonresponse in surveys (Vol. 81). New York: John Wiley & Sons.

    Google Scholar 

  53. Sassler, S. (2004). The process of entering into cohabiting unions. Journal of Marriage and Family, 66(2), 491–505. Retrieved from http://www.jstor.org/stable/3599850.

  54. Sassler, S. (2010). Partnering across the life course: Sex, relationships, and mate selection. Journal of Marriage and Family, 72(3), 557–575. doi:10.1111/j.1741-3737.2010.00718.x.

    Article  Google Scholar 

  55. Sassler, S., Addo, F., & Hartmann, E. (2010). The tempo of relationship progression among low-income couples. Social Science Research, 39(5), 831–844. doi:10.1016/j.ssresearch.2010.06.001.

    Article  Google Scholar 

  56. Sassler, S., & McNally, J. (2003). Cohabiting couples’ economic circumstances and union transitions: A re-examination using multiple imputation techniques. Social Science Research, 32(4), 553–578. doi:10.1016/S0049-089X(03)00016-4.

    Article  Google Scholar 

  57. Sassler, S., & Miller, A. J. (2011). Class differences in cohabitation processes. Family Relations, 60(2), 163–177. doi:10.1111/j.1741-3729.2010.00640.x.

    Article  Google Scholar 

  58. Schneider, D. (2011). Wealth and the marital divide. American Journal of Sociology, 117(2), 627–667. doi:10.1086/661594.

    Article  Google Scholar 

  59. Stanley, S. M., & Markman, H. J. (1992). Assessing commitment in personal relationships. Journal of Marriage and the Family, 54(3), 595–608. doi:10.2307/353245.

    Article  Google Scholar 

  60. Stanley, S. M., Rhoades, G. K., & Markman, H. J. (2006). Sliding versus deciding: Inertia and the premarital cohabitation effect. Family Relations, 55(4), 499–509. doi:10.1111/j.1741-3729.2006.00418.x.

    Article  Google Scholar 

  61. Stanley, S. M., Rhoades, G. K., & Whitton, S. W. (2010). Commitment: Functions, formation, and the securing of romantic attachment. Journal of Family Theory & Review, 2(4), 243–257. doi:10.1111/j.1756-2589.2010.00060.x.

    Article  Google Scholar 

  62. Tach, L. M., & Eads, A. (2015). Trends in the economic consequences of marital and cohabitation dissolution in the United States. Demography, 52(2), 401–432. doi:10.1007/s13524-015-0374-5.

    Article  Google Scholar 

  63. Tach, L., & Halpern-Meekin, S. (2009). How does premarital cohabitation affect trajectories of marital quality? Journal of Marriage and Family, 71(2), 298–317. doi:10.1111/j.1741-3737.2009.00600.x.

    Article  Google Scholar 

  64. Treas, J. (1993). Money in the bank: Transaction costs and the economic organization of marriage. American Sociological Review, 58(5), 723–734. Retrieved from http://www.jstor.org/stable/2096283.

  65. Treas, J., & De Ruijter, E. (2008). Earnings and expenditures on household services in married and cohabiting unions. Journal of Marriage and Family, 70(3), 796–805. doi:10.1111/j.1741-3737.2008.00522.x.

    Article  Google Scholar 

  66. Vogler, C., & Pahl, J. (1994). Money, power and inequality within marriage. The Sociological Review, 42(2), 263–288. doi:10.1111/j.1467-954X.1994.tb00090.x.

    Article  Google Scholar 

  67. Waller, M., & McLanahan, S. (2005). “His” and “her” marriage expectations: Determinants and consequences. Journal of Marriage and Family, 67(1), 53–67. doi:10.1111/j.0022-2445.2005.00005.x.

    Article  Google Scholar 

  68. Williamson, O. E. (1981). The economics of organization: the transaction cost approach. American Journal of Sociology, 87(3), 548–577. Retrieved from http://www.jstor.org/stable/2778934.

  69. Xiao, J. J., & Anderson, J. G. (1997). Hierarchical financial needs reflected by household financial asset shares. Journal of Family and Economic Issues, 18(4), 333–355. doi:10.1023/A:1024991304216.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Fenaba R. Addo.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Addo, F.R. Financial Integration and Relationship Transitions of Young Adult Cohabiters. J Fam Econ Iss 38, 84–99 (2017). https://doi.org/10.1007/s10834-016-9490-7

Download citation

Keywords

  • Cohabitation
  • Debt
  • Investment
  • Marital intent
  • Pooling
  • Young adult