Take 5 Financial Steps to a Closer Marriage Cooperation, among other things, is one way to get on the right track. BY AL JACOBS
Whenever you make an important financial decision, be sure to discuss it with your spouse.
When I proposed to my bride-to-be many years ago, finances were not the highest priority on my mind. However, within weeks following our exchange of vows, economic considerations appeared. With things to buy, bills to pay and monetary decisions to consider, money quickly became important. As matters turned out, I was lucky. I married a woman with a sense of financial responsibility. My wife also lucked out; she didnít marry the last of the big spenders. I suppose neither of us can take credit for our brilliant stewardship, as we came by our frugal traits naturally.
There are countless couples not nearly as fortunate. Far too many American families live from one economic crisis to another. Sadly, these persons never develop the habit of living within their means. They seem destined to remain at war with their billfolds and pocketbooks, with all the marital misery possible. Luckily, itís correctible. Stick to these five fundamental rules and you and your spouse can live life without making financial mistakes.
1. Pay bills promptly. When a bill arrives for payment, one of two things can be done with it. It can be paid promptly or set aside to be paid later. (Admittedly, thereís a third optionónot paying it at allóbut letís not go there.) The habit of selecting the end of the grace period as the appropriate date for payment is a troublesome practice. Human nature is such that late charges, damaged credit and aggravation will be your reward. The best way to function is by making your payments within twenty-four hours. The results will be serendipitous; youíll find the people with whom you do business will be more attentive, your phone will ring less insistently and your days will become less frantic. Living in the financial pending basket is a tough row to hoe.
2. Donít spend what you donít possess. Marketing in this country came of age in the 1920s. Back then the advertising industry developed a sophistication, which enabled it to foist off an unbelievable aggregation of commercial junk on a gullible public. One of the techniques perfected involved convincing a buyer a product unaffordable today would surely be affordable at some later dateóso sign on the dotted line now and breathe easily, secure in the knowledge tomorrow never arrives. This disavowal of the future sells a lot of stuff, but gets many couples into serious trouble. Itís important you realize todayís expense may not be more easily paid tomorrow. Without the money in hand today, donít commit to spending it.
3. Avoid paying interest. The single factor at the root of many couplesí financial woes is the payment of interest. Whether the source of trouble is from the time-purchase of furniture, a vacation financed on the cuff, an auto loan or that overbearing scourge, the credit cardóthe drain on family income flow tends to go on forever. Itís my belief, with the exception of mortgages on sensibly-priced real estate, interest should never be paid to anyone . . . anywhere . . . anytime. This is particularly true since implementation of the 1986 federal tax law changes, which ended the tax deduction previously given for interest payments. There is no rational justification to go into hock for consumer items, regardless of the interest rate offered. As I said in the prior paragraph, donít spend what you donít possess. Iíve never forgotten the response I received many years ago from an elderly investor whom I asked what he considered to be a fair and reasonable interest rate to pay on borrowed money. With a shocked expression, he blurted out: "Interest is not something you pay; itís something you receive."
4. Maintain a reserve. Nothing can be more devastating to a relationship than insolvency. At such times, affection easily turns to animosity, often accompanied by recriminations. I still remember a slogan expressed frequently during the Great Depression of the 1930s: When poverty walks through the door, love flies out the window. One way to forestall this problem is to set aside assets when times are good, so when leans times come, as they invariably do, you and your spouse will enjoy a cushion upon which to fall back. Profit from the negative examples set by the political officials of my state, California. Tax money rolled in during the early part of this decade, as real estate values soared. Our leaders managed to spend every dimeóand then some. When prices collapsed, our state government went into shock. California now faces a $24 billion shortage and former allies are at each othersí throats. This may be the way to run a governmental operation, but not a successful marital relationship.
5. Make spending decisions together. Never forget that marriage is a partnership. Just as with other important considerations, major financial decisions must be a joint effort. Itís true, of course, one of the partners may possess a better feel for money than the other. Nonetheless, as they share the final outcome, each deserves a say. Iíve found over the years when my wife and I truly cooperate in important financial matters, the decisions usually satisfied us both. The alternative is an invitation to resentmentócertainly not a way to live life.
Al Jacobs has been a professional investor for nearly four decades. He is a nationally syndicated columnist and appears regularly on ProducersWeb.com, DrLaura.com and SheKnows.com. He draws on his extensive expertise in real estate, mortgage, and securities investments to counsel millions on how to invest wisely and spend prudently. He is the author of "Nobodyís Fool: A Skeptics Guide to Prosperity." Subscribe to his financial column, "On the Money Trail," at no cost or obligation at, and sign up for his "Life Stages Report" by visiting www.onthemoneytrail.com.