The Wall Street Journal recently had an article about cohabitating couples and their ability to accumulate wealth versus married couples. The premise of the article was based around the question of WHY is it that married couples have roughly four times the net worth compared to couples that are not married but living together.
“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.“
WSJ
Now, at the risk of over simplifying things, I’m going to pose a question and would love for that question to be pondered:
Is it possible that the idea of a lifetime commitment to someone just MIGHT cause those individuals to make more long-term decisions and plan for life’s duration rather than looking at their relationship simply as the current boyfriend or girlfriend?
Okay, fine. Maybe I’m oversimplifying this. BUT IS IT REALLY THAT COMPLICATED?? Here’s an excerpt from the piece about a cohabitator the WSJ talked to.
“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.”
WSJ
The article BRIEFLY talked about long-term thinking but couched that thought in the idea of pooling money together. Some professor who was interviewed said that it’s easier to amass wealth if there’s a perceived feeling of stability. The idea is that combining finances is a big reason why married couples are better off financially.
Here’s a bit of personal experience: my wife and I have been married for almost 5 years. We own some property and while I don’t want to sound braggy, for the sake of this point, I’ll just say we align with the net worth findings the WSJ made at the beginning of their article. However, even after 5 years, we’ve failed to do the very thing that supposedly accounts for our financial success. We’ve yet to combine bank accounts. The physical, tangible, and visual experience of seeing pooled money in a single account is something we don’t have, yet we’ve built a strong financial base. Why is that?
I’m going to answer my own question from the beginning of this. It’s because we have a long-term mindset. In terms of relationships, barring a tragedy, this is it. We don’t have shared bank accounts but we have a shared vision of our future together because of a life-long commitment. You just don’t have that when you move in with your boyfriend or girlfriend. There is simply no substituting commitment in regard to life-long planning. And that’s what cohabitators apparently are failing to see. That’s not the say that cohabitators CAN’T build a happy life and financial stability. I’m just saying it’s easier to do when you’re married.
