For Richer, For Poorer

Ah, marital bliss! You’ve found that special someone, or someones (I’m looking at you, Utah) that you want to spend the rest of your life with. To have and to hold, for better, for worse, for richer, for poorer…There’s obviously more, but in this post, we’ll stop there and just examine that “for richer, for poorer” part because the truth is, if you’re not on the same financial page, “for better” can flip to “for worse” real quick.

Aligning Up Front

Toward the end of those standard wedding vows, there’s a part in there that says “…til death us do part.” And no, that’s not a typo. The words are actually “til death us do part”. Don’t worry, I had to look it up, too. Anywho, the point is, marriage is [supposed to be] “til death”. And until someone comes back from the other side to tell us otherwise, that means forever in human time. If someone told you that you’d have to pick someone to carpool with forever, you’d probably do some research to find out some critical info on your potential riding buddy. You’re not going to select someone solely based on the fact that you like looking at them or because they make you laugh. Of primary importance in this scenario, some things that come to mind are, where do they work? This one seems obvious, but you probably don’t want to carpool with someone that works on the other side of town. What do they like to listen to? Are they more classic rock or country rap tunes? Or are they more of a podcast or audiobook person?

What it boils down to is, you’re going to search for a carpool buddy that’s compatible with you in areas that matter. Marriage is no different. As much as people focus on love as the cornerstone of marriage, practical and alliterative things such friends, family, and finances play a critical role. Your now spouse may have initially attracted you when he pulled up in that nice car and tailored suit and treated you to those fine dining experiences, but those things become way less attractive when you find out that he’s been indulging in those things at the expense of funding retirement accounts and that you can count his credit score on one hand.

Given the gravity of such a decision as choosing a life partner, it makes sense to ask the hard questions up front. In fact, there’s literally a book called The Hard Questions that I highly recommend for any couple considering marriage or any similar arrangement that merges your lives. This book encourages couples to do just what it says, ask the hard questions, about the big things that typically cause major conflict in marriages. This includes money. Understand where your partner stands with regard to money before making that til death commitment. What’s their current financial situation? How do they think about money? How do they manage money? Who should manage the money? It’s not the most romantic thing in the world, but do yourself the favor of getting to the nitty gritty of credit scores and net worth. When you get married, their stuff becomes your stuff, the good and the bad, so know up front what you’re signing up for.

Full disclosure, this exercise doesn’t always yield the result you might want, but it’s best in the long run. This book is my wife’s favorite engagement gift to give to friends and family. As a direct result, it’s had about a 50% breakup rate. In fact, the top five star review on Amazon as of this writing reads, “My boyfriend and I broke-up after reading this book!” That seems dismal on the surface, but it probably saved that couple a lot of heartache and money in the long run.

Here are a few examples of where my wife and I aligned up front. We decided to merge our primary finances, meaning that most of our take home pay goes into a single checking account. From there, we pay all bills, transfer to savings, contribute to after tax investments, and do any discretionary spending…in that order. We decided to merge our finances because our goals were bigger than us individually. We wanted to buy investment property, we wanted to have kids and set a financial foundation for them, and many other “big” things. But more on goals in the next section. Then, the small amount that we agreed on up front from each of our paychecks that doesn’t go to our joint checking goes into our individual “slush” funds. This is money that we can use to spend however we want. For example, I choose to spend some of my slush money on overpriced beer. This works for us, but take some time to discuss and see what works for you.

Setting Goals

Let’s talk about setting and achieving financial goals. For pretty much anything, if you want to do it well, you need to have a plan. First , figure out what you want to do financially as a couple. Are you trying to buy a house? Do you have debt that you want to eliminate? What are your savings goals? These are the types of important questions you should be asking. Then, once you have your list of questions, you need answers to those questions. Sit down with a whiteboard, notepad, or a spreadsheet and physically write down your financial goals. I specify writing the goals down because these visible artifacts serve as a reminder of what you’re trying to achieve. I was intentional about listing a whiteboard first because this is something you can walk by every day. It won’t get lost in a drawer or in a digital filing system…or worse yet, in the clutter that is our own heads.

A goal without a plan for achieving it is nothing more than a wish, so now it’s time to formulate a plan for each goal. The plan, too, should be written down. For this step, I like a spreadsheet. This allows you to keep track of specific action steps, due dates, their status and owners. If you want to get fancier, you can use something like Trello. I’ve used Trello to keep track of both personal and work-related tasks. The plan should consist of small, achievable tasks with definitive start/end dates and owners. Each task should move you towards the goal you set.

A goal my wife and I set early on was to take a nice vacation every year. Based on what we knew the average cost of a tropical getaway for us was, we committed to putting away an additional amount of cash every month beyond our emergency savings to ensure we could take a trip without having to worry about whether we could afford it when the time came. The plan was simple. I took the estimated price of the trip and divided it by the number of months there were until we wanted to take the trip. Whatever that quotient was, we committed to saving that amount each month. In some months, that may have meant sacrificing a smaller “want”, but your choices should generally favor the things you really want to achieve vs. those impulse desires. In our case, our real “want” was that annual vacation. Going advanced and referring to my post on credit cards, we put the vacation charges on our card and used the cash we’d saved to pay the card off immediately. That way, we earned the credit card points. A few vacations later, we’d earned enough points to cover a good chunk of a future vacation. #winning

Following Through

If a goal without a plan is just a wish, a plan without action is a well documented wish. Like just about everything I talk about in this blog, nothing happens if nothing’s done. The easy part is reading and learning about what to do. This step is important. Planning is important. But doing is critical. Take action on your plan. Even if it’s a small action, it moves you toward your goal. This goes back to creating your plan. For me, it’s very helpful to break my goals down to small, bite-sized, actionable chunks. Not only does this keep things from feeling overwhelming, it keeps us motivated by hitting interim milestones. Little wins lead to bigger wins. And don’t forget to celebrate those little wins as a couple along the way. Winning is great, but winning together builds a bond that keeps you together.

Commit to taking action and start talking to your partner right now. Agree on a goal, create a plan, hit that first milestone, and treat yourselves to a fancy cupcake to celebrate. Let me know how it goes.

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