5 Steps To Plan For A Financial Successful Marriage

The first months of a marriage
are when couples establish the
spending and saving patterns
that will determine whether they
will prosper or become lifelong
slaves to creditors. That's why
the time to work out a financial
plan is early, preferably before
you walk down that aisle. How
well you lay down the
groundwork in the first months
of your marriage will determine
whether your wedding will kick
off a lifetime of financial
struggles or a smooth journey
down the road to security, peace
of mind and a rewarding
retirement.
Before I suggest how you can
build a financially successful
marriage, let's agree on the three
hard realities of married life that
stand as the biggest hurdles to a
financially successful marriages.
Reality Number 1: Every young
couple want more than they
can afford.
It doesn't matter whether
both are professional superstars
earning in the mid six figures or
a pair of struggling artists barely
making rent on a loft. Despite
this fact of human nature, most
young couples, no matter how
intelligent and professionally
successful, fall into the trap of
wanting more than they need or
can really afford. They justify this
by telling themselves that they
are young and can start saving
for kids' college educations and
retirements once their earnings
start outpacing their spending.
The flaw with this strategy:
earnings never catch up with
undisciplined spending, much
less outpace it.
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Reality Number 2: Every
temptation feels like a
necessity.
How can you deny the spouse
and/or kids a dinner out, new
furniture, new car, new
computer system, trip to Hawaii?
Who has the heart to tell the
spouse, "I won't allow you that
pleasure because I'd rather save
the money." The desire to save
money in and of itself rarely
stand up to the temptations that
come down the pike. For most
couples the last and only line of
budgetary defense is the empty
checking account.
Reality Number 3: Saving is
easy to put off.
Given a million dollars to
spend within a year, most
couples would have enough
sense to solemnly resolve to
spend a twelfth of that each
month. Come July, most would
have spent well over half that
amount but justified it by
reasoning that once they take
care of all their deferred needs,
they will be able to get by on less.
Come Thanksgiving they will be
wondering how they are going
to afford Christmas gifts with
their few remaining dollars.
Coping intelligently with those
three realities of marriage is the
key to a financially successful
marriage. Here's a 5-step
strategy to help your marriage
beat the odds:
1. Establish your financial plan
early.
The best time to hash out
your long-term goals is before
you get married. No amount of
planning after marriage will
reconcile two people with
diametrically opposed views on
spending and saving. If you and
your prospective spouse
disagree fundamentally, it's best
to recognize early that you will
probably have to choose
between that person and your
financial goals.
2. Agree on areas to economize.
The most difficult aspect of a
financial plan is agreeing on
areas on which to economize.
Housing, cars, dining out,
vacation travel, home
furnishings, clothing, sports and
recreation, groceries, giftgiving,
charitable giving, computers and
electronics are all areas that
allow spending discretion. For
example, you may decide that
you are willing to drive small
cars, furnish your home
inexpensively, forego long
vacations and skip most types of
home electronics, but aren't
willing to live in a cramped
apartment, scrimp on groceries
or cut down on your reading
habits. It's neither realistic nor
desirable to deny yourselves all
material pleasures. What matters
is that you identify at least some
areas in which you would both
feel comfortable scrimping. For
example, even two small ways of
economizing -- driving small cars
and brownbagging lunches --
will save a couple about ten
thousand dollars a year or a half
million dollars in thirty years
when the compounding effect is
factored in! That's enough to pay
off the mortgage on a nice
second home!
3. Visualize the rewards you are
working toward.
They might include quality
educations for the kids, a
spacious house, a vacation home,
early retirement with regular
travel. It's important to visualize
these long-term rewards clearly
so they will motivate you to stay
the course. Get photos that help
you picture those rewards and
keep them in plain view around
the house and in your office. It is
much easier to tell people, "I'm
saving for a second home in
Maui" than to say, "I'm trying to
save a few bucks." Truly
worthwhile long-term rewards
are the very best defenses
against the constant temptations
of instant gratification. Write
them down and prioritize them.
4. Learn to share inexpensive
passtimes that improve your
mind and body.
Boredom encourages
frivolous impulse spending.
Shopping, amusement parks,
shows, skydiving, speedboats,
dining out and movies all have
their place, but many people use
them as escapes from their
general ennui with life. Routinely
spending money to be
entertained is a symptom of
spiritual decay rather than of a
healthy lifestyle. It also happens
to be a surefire way to keep
yourselves in indentured
servitude to creditors instead of
working toward financial
freedom. Satisfy your desire for
mental and physical stimulation
is through healthful, constructive
activities like hiking, running,
cycling, bodybuilding, reading,
taking classes, playing board
games, music, arts and crafts.
Cultivating these kinds of
passtimes will save the average
urban professional couple tens --
if not hundreds -- of thousands
of dollars over two or three
decades. And that doesn't even
count the many thousands that a
generally healthier, more
satisfying lifestyles will save in
medical expenses and lost
wages.