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Kubiak's Rules For a Financially Happy Marriage

by Thomas Kubiak

An overwhelming number of failed marriages cite financial troubles as a major factor in their breakup.  As sad as this is, it really shouldn't be too much of a surprise, because the way we use our time and money reflects our values.

And, of course, without a strong set of shared values, marriages drift apart.  But dealing with finances together can bring a couple closer. After working with married couples for so long, I thought I should share four principles I've seen for building wealth and your marriage.

Start early
There's no better time to establish the rules of a relationship than at the beginning.  And every seven years you delay starting a savings plan cuts in half your ultimate net worth in retirement.  Chances are you know someone who's getting married soon, so forward them this email ... it may well be more valuable than the check you write.

Work as a team on the budget
Shared activities help you build and integrate your values and keep your finances in sync with the rest of your life.  Couples that share church activities or philanthropic causes typically do better financially, because their common vision allows them to work together, instead of pulling in different directions.  They do well, while doing good.

The more opportunities to forge shared values, the better the marriage team.  Even the simple process of creating and adjusting a family budget provides a forum for discussion of what is really important to the family.

A budget gives you more freedom, not less
Couples without a budget can, and often do, fight about every dollar spent.  Every purchase is an opportunity for values and priorities to clash.  But couples who have worked together on a budget are already in agreement on the big picture.  Once the difficult decisions are made about what will help further the family's values, the specific purchases in each category are much less critical.

Couples with a budget do not get concerned about spending until a category goes over the budgeted amount.  Having decided how much money the family can afford to spend on clothes for him and for her, it doesn't matter as much if he prefers lots of inexpensive clothes and she prefers a few nice pieces, or vice versa.  A budget allows discretion and freedom to prevail, with cooperation and teamwork.

Always pay yourself first
The best way to achieve your financial goals is by moderating your spending and staying on track with your savings needs.  Only after you have saved several times your annual salary does the rate of appreciation become more important than the rate of savings.

To pay yourself first, set up an automatic monthly transfer from your checking account to an investment account where your contribution is automatically invested in a diversified portfolio.  Even a small amount makes a big difference. Just five hundred dollars a month (that's just $6,000 a year) at 11.5% annual interest would compound to a million dollars by the middle of the 26th year.

Money makes money. And the money that money makes, makes even more money. 

Posted December 31, 2015