The report, Can We Afford Not To?, was undertaken by youth homelessness charity Depaul UK and launched today (25 March) at its homelessness prevention conference in Kent.
It found that, on average, £9,000 could be saved for every young person that was prevented from falling into homelessness, although the cost varied between areas.
As well as saving councils money and reducing homelessness, the research found that prevention schemes such as family mediation and parenting classes can improve the emotional and physical wellbeing of young people facing family breakdown.
Una Barry, deputy chief executive of Depaul UK, said: "This research highlights that we need to spend a small amount of money now to make real savings in the long term. At a time when money is tight, we all have to make cuts, but if we can work across departments and schools to pool budgets we can really make savings for the future."
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