Seven Financial Rules For Marital Bliss

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An overwhelming number of failed marriages cite financial troubles as a major factor in their breakup. This is no surprise because the way we use our time and money reflects our values. Without a strong set of shared values, marriages drift apart. But, dealing with finances together can bring a couple closer. Here are seven principles of how you can build wealth and your marriage.

Start young. June is the most common month for weddings, and 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 this month, so send them a copy of this article. It may 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 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 within 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 (just $6,000 a year) at 11.5% each year will 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.

Limit the amount you spend unless you both agree. One big mistake can undo months of frugality and sacrifice. Therefore, big purchases require both members of the team to agree. Honoring each other in this way helps avoid resentment and disgust.

When a couple is just starting out, this dollar limit may be very small, perhaps only fifty dollars. As the couple matures, they will grow to anticipate each other’s wisdom and values; plus, they will likely be able to increase their discretionary spending limits.

Separate needs from wants. In the United States, nearly all of our purchases are wants, not needs. We really need little more than food, shelter and clothing to survive. It is easy to fall into the misconception that we deserve nice things because we work hard. But wealth is what you save, not what you spend. The textbook definition of capital is deferred consumption, and wealthy people learn to value financial security over immediate gratification.

We have worked with families with very modest incomes who through saving and investing have grown to be millionaires. On the other hand, we have worked with couples who spent every dollar of dual six-figure incomes. The difference is separating needs from wants.

Enjoy a frivolous slice. Both members of a marriage should have a slice of the budget which is completely at their discretion. So long as their spending stays within this thin slice of the budget pie, they can be completely frivolous. Perhaps it is only 0.5% of your total budget, but it will provide a place to put purchases that otherwise might cause marital strife.

If one member collects ceramic pink pigs and the other signed collectable hockey cards they can both enjoy their frivolous expenditures without jeopardizing budget items that are more important to the family.

Couples that learn to live proportionately maintain their balance whether they are rich or poor. No matter the circumstances, they include some fun, some gifting, and some investing as a reflection of their shared family values.

Seven Financial Rules for Marriage

  1. Start young.
  2. Work as a team on the budget.
  3. A budget gives you more freedom, not less.
  4. Always pay yourself first.
  5. Limit the amount you spend unless you both agree.
  6. Separate needs from wants.
  7. Enjoy a frivolous slice.

Photo by Ben Rosett on Unsplash

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. Favorite number: e (2.7182818...)