How do cohabiting couples with children spend their money?

Increasing rates of cohabitation in the United States raise important questions about how cohabitation fits in with the definition of family. Answers to this question depend in part upon the extent to which cohabitors' behavior differs from that of other family types. Using data from the Consumer Expenditure Survey, we compare the expenditure patterns of cohabiting-parent (n = 1,804), married-parent (n = 33,159), divorced single-parent (n 7,641), and never-married single-parent (n 2,893) families. We find that cohabiting-parent families, compared to married-parent families, spend a greater amount on 2 adult goods (alcohol and tobacco) and a smaller amount on education. Cohabiting-parent families also differ in their spending patterns from divorced single-parent families and from never-married single-parent families. Overall, our results show that cohabiting-parent families allocate their budgets differently than do other families.