Her Financial IQ classes and workshops always draw out intriguing conversations from the ladies. Recently my students were discussing how expensive housing was, and for many of them, home ownership was out of reach.
The subject of cohabitating came up, families pitching in to buy a home together that they could not afford on their own. This topic was intriguing because I had just had a similar conversation with some divorcee friends of mine. We discussed cohabitating to pool resources - not just for the housing but the communal aspect of helping each other.
We pontificated what it would be like to watch each other's kids, share carpools, subscriptions, and all household costs. It might be a little crazy household, but it could be fun; we would be a tribe that helps each other and save money along the way. So this brings up my question of the week. Could you cohabitate to save money?
Cohabitation and Multigenerational living have risen in the last few years- from 7% in 2011 to 26% in 2021. Cohabitation involves people living under one roof while splitting bills and house chores, although they could have separate living spaces. Multigenerational living is more specific to members of the same family from two or three generations.
Cohabitation is a great way to save money on housing costs and affordable care for children and aging parents.
In June 2022, CNN published an article covering Harvard University's annual State of the Nation's Housing Report with a headline that stated: "The dream of owning a home is out of reach for 4 million Americans." According to Harvard University's annual State of the Nation's Housing Report, the increase in home prices, rent, and rising interest rates worsened the affordable housing crisis in the US.
A recent report from rent.com shows that the national average rent prices for a one-bedroom and two-bedroom are up by 25% and 26.5% year over year, respectively. What's also interesting is they made a list of the cities with the highest increases, including Austin, Texas, with a 108% increase year over year, Jersey City, New Jersey, with a 51.6% increase, and Tempe, Arizona, with a 49% increase among others.
With housing and all other associated costs becoming so expensive, it's no surprise that we hear these conversations about cohabitating.
Generations United put out a study in 2021 with the following statistics;
👉One in four Americans live in a multigenerational household.
👉 Multigenerational living nearly quadrupled in the past decade, with the pandemic playing a significant role.
👉Nearly 6 out of 10 people (57 percent) say they continue to live together because of the COVID pandemic.
👉7 out of 10 people currently living in multigenerational households plan to continue doing so long term.
Factors Leading to Multigenerational Living
👉Elder care.
👉Child care and educational needs.
👉Job loss/change in job status or underemployment
👉Healthcare costs for one or more family members
👉Cultural and family expectations
👉Education/retraining expenses
Benefits of Cohabitating
👉 Home Ownership, i.e., pooling resources together and investing in a home you wouldn't be able to invest in by yourself.
👉 Cutting down living expenses; cohabitating can be more affordable as each member pays lesser bills than they would if they lived alone.
👉 Improved relationships among family members; Families living under one roof enjoy the benefit of seeing each other daily, thus creating closeness and attachment.
👉 Affordable and effective child or adult care; A family living in the same household means the older kids and adults can look after young kids or the aged parents/grandparents.
👉 Improved finances for family members; Pulling resources together and consolidating expenses such as utilities and subscriptions help improve finances for everyone in the household.
👉 Positively impacts individuals' physical and mental health; The sense of belonging and social support individuals get from a multigenerational household improves their overall mental health.
👉 Makes it possible for a family member to enroll in school or job training; When expenses are brought together and addressed as a family, it is easy to get financial ducks in a row and allocate finances to more important things like education.
Cohabitation is an excellent way for families to save on housing and childcare costs. To get its full benefits, individuals living together should set expectations, create rules and respect each other's boundaries. A good example is my brother and sister, who have cohabitated for many years. My sister was able to buy a house, with my brother helping to pay the mortgage and utilities. He also pitched in with chores around the house. A bonus was the feeling of safety and someone looking out for each other.
So, I ask again, could you cohabitate to save money and get your financial ducks in a row?
👇Share your thoughts in the comment section below 👇
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