In my day-job, I mentor property investors. I’m currently working with about 65 clients who each pay AU$10,000 for a year’s worth of training and personal coaching. Including their partners, that's about 90 people I work closely with.
I say that only to make the point that these are very committed investors, and I've seen first hand in hundreds of test cases what makes some people do really well financially and others struggle.
As you might expect, some of our clients achieve their goals and others do not. There are many reasons for this, not the least of which is the 80/20 principal that 
Beyond that, there is one common thread I’ve seen in those who prosper long term. It comes down to agreement between partners on priorities and values. Obviously, we do a lot of work at the beginning of our mentoring program trying to get that foundation right.
Getting Priorities in Line
Here’s a photo of me with my amazing wife. I love her dearly.
My wife and I decided before we were married that our relationship with one another would be at the top of our list of what’s most important. In fact, we’ve been very clear with our six kids – yes, I said six – that although we love them, we’ve decided to love each other more.
The reason is simple: they are welcomed additions to our already existing family, and long after they move out, we will still be waking up next to one another. We believe the greatest gift we can give our kids is two parents who are passionately in love.
Just in case you didn’t believe me about the six kids, here they are…
Of course, it’s easier to talk about our values than it is to live them out. Life has a way of trying to move us away from what we say we care about. Like many couples, we’ve found that money stress has been one of our biggest sources of conflict.
Here are some statistics in Australia, but they’re pretty much in line with the rest of the western world.
One out of three first-time marriages in Australia end in divorce. In a study conducted just after the global financial crisis of 2008, Relationships Australia found that financial stress was the main cause of divorce for women. In fact, 40 percent of Australians rated concerns about finances as a “major pressure” on their relationship.
And if you think you’ve got financial stress now, just wait until the divorce is final. Long-term marriage and relationship breakdowns cost Aussies $60,000 on the average. Ouch!
If you’re married or living with a partner, the fact that money stress puts pressure on a relationship is no surprise. We’d all agree; if we could shore up some weaknesses in the ways that we handle and talk about money, then we could remove a major barrier to going the distance in our marriage.
Looking from a more positive angle, a healthy and happy marriage actually promotes financial success. According to this author, married people do better financially than singles, not because financially successful people are the ones getting married, but because married people who act as true financial partners reap the benefits of teamwork.
So here are my thoughts on how money and finances play into marital and financial bliss:
1. Seek to understand one another deeply.
One of the great challenges of marriage is to merge the differing identities and values that each of you bring into the relationship. If your marriage is anything like mine, the very things that attracted you to one another are the same things that, at times, make you want to rip each other’s heads off.
Nothing has shaped your mindset toward money and investing quite like the family environment that you grew up in. In other words, your views about money are inherited. But, the same is true for your partner. You’ve both come into the relationship with very different experiences and attitudes toward money.
In my home growing up, my dad was a big spender, and he didn’t hesitate to drop loads of cash, even cash he didn’t have, to give my sister and I the best stuff. My wife’s dad, on the other hand, was quite disciplined and, although he wasn’t super-tight, debt was a four-letter word in her home – no pun intended.
Our histories collided in marriage, and the conflict followed. Over time, my wife started to understand why I like to spend money on nice things. I started to realise why she feels guilty when she buys anything that’s not a necessity. But these insights didn’t come until we began to communicate with one another in a healthier way.
It would probably be helpful for you to talk with your partner about how money was handled in your homes growing up and how that has impacted your habits today. The more you can understand one another’s weaknesses and tendencies, the more cool-headed and merciful you will be toward one another when life-pressures arise.
2. Lay all your cards on the table.
I can still remember the time I told my soon-to-be wife that I owed the credit card company $12,000. That was a painful and humbling conversation, but I knew I couldn’t come into the relationship with any secrets.
Remember the story I told about borrowing off my credit card to go all-in on a tech stock in 2000? Well, that’s where this debt came from. It was a rough way to start our marriage.
Honesty and trust are the foundations of a strong and healthy relationship. Because of shame or mistrust, many couples keep financial secrets buried. If you want a happy marriage, commit to discussing your financial positions openly. Get all the secrets out.
Fully disclose how much you owe on credit cards, other outstanding debts, and any assets that you secretly hold separately. Your partner will find out sooner or later. It’s better if they find out from you. Humble yourself, take responsibility and if necessary, ask your partner to forgive you for not telling them sooner.
3. Consider your money, “our money”.
If you grew up in a controlling environment with overbearing parents, you may unknowingly be rebelling against your upbringing through a fierce independence.
Have you made a promise to yourself that sounds something like, “I will never allow my partner to control me like the way my dad controlled my mom.”
This type of fear and mistrust can often lead couples to keep their personal finances separate. Many feel, “if we combine our finances, I might lose part of my identity and fall under my partner’s spell.”
The problem is, if you’re married, you stood across from your partner in front of your family and friends and said something like, “What’s mine is now yours.” Marriage is a lifelong commitment that calls for unity and oneness, not selfishness and independence. Keeping your money separate will rob you of this joyful interdependence and put you in a position of separation.
Couples who manage their finances with separate bank accounts are a small step away from divorce. After all, what does a couple do just before getting a divorce? They get separate bank accounts.
If the “our money” concept freaks you out, just give it a trial run. Combine your finances for 90 days and see if your partner is the horrible and controlling person you feared they might be. Perhaps you’ll be pleasantly surprised and experience a deeper level of trust on the other side of this experiment.
Of course, if you want to remain independent, that’s fine. Just don’t get married.
4. Create your life goals together.
Having worked closely with hundreds of investors, I’ve seen first-hand the benefits of perfectly aligned vision and goals within marriage. The couples that are passionately working together toward a common financial vision are reaching their goals faster. The couples that lack alignment on their financial dreams seem to expend a lot of effort but don’t accomplish much.
The couples that are passionately working together toward a common financial vision are reaching their goals faster. The couples that lack alignment on their financial dreams seem to expend a lot of effort, but don’t accomplish much.
In our home, I’m the dreamer and my wife is the practical one. You would think we would complement one another well, but sometimes we just irritate each other, because we’re so different. I try to get her to believe in the impossible, and she just wants to know exactly how it’s going to happen. Then I get mad because she sounds negative.
Finding alignment on life goals is not always easy. For it to work, one of you needs to take the lead and initiate some discussions about your future. Sit down with a glass of wine and have a “deep and meaningful.” Here are some questions that can get your conversational juices flowing:
• What one thing would you most want to change about our lives?
• How long do you want to work?
• How much cash do you want to see in our emergency savings account?
• What do you see our lives looking like in our 50’s? What about in our 60’s?
• How much money do you think we’ll need per year in our retirement?
• Do you want to work toward a goal of retiring early? What sacrifices would that require?
Before you’ll ever have the motivation to spend less and save more, you’ll need to be clear on what you want, and have compelling reasons why you want it.
5. Agree on a budget and hold one another accountable.
I caught up with a couple recently to help them create a plan toward their investing goals. One of the first things we discussed is the importance of budgeting.
They’ve been earning $300,000 per year, and saving very little. Why? Because they never sat down to decide together to spend less. Now their goal is motivating them to dial back their standard of living. No more Louis Vuitton handbags!
Spending every dollar on paper before each month begins is foundational to wealth creation. If we’re going to make any traction toward financial goals, we must treat our personal finances like we would a business. Budgeting helps us to purposefully delay gratification for the sake of a longer term reward.
My wife and I use some helpful budgeting software called YNAB, short for “You Need A Budget.” 
Whether it’s this system or another, make sure you decide each month where all your money’s going to go before you spend it.
6. Make decisions together, but play to your strengths.
The ultimate goal of budgeting is obvious – to be deliberate about where we spend, so that we can direct more funds toward savings and investment, or debt reduction if necessary.
Because opposites tend to attract, in most relationships, there’s a creative and spontaneous one, and a responsible and organised one. One of you probably loves the idea of budgeting and the other one probably hates it.
One of you is a spender and the other one is a saver. You’re together because you subconsciously knew that you needed one another. Recognize this and be purposeful about playing to one another’s strengths.
It’s probably the responsible and organised one who needs to oversee the management of the finances. While you can delegate the budget preparation, you both must make decisions together.
If you’re the creative and spontaneous one, you need to push for some margin in the budget for fun. Without you, your marriage would be boring and your kids would hate being in your family.
7. Communicate monthly to review your progress toward the goal.
In Stephen Covey’s classic book, The Seven Habits of Highly Effective People, I learned that the most important tasks to schedule first are those that are important, but not urgent. Just like going to the gym, keeping a regular date-night and spending quality time with your kids, a monthly finance meeting with your partner falls in this important, but not urgent category.
This monthly finance meeting is your opportunity to review how you did last month living by the budget, to hold your partner’s feet to the fire if they spent too much, and to remember the short and long-term goals.
If you’re the responsible and organized one in the relationship, it’s your responsibility to schedule the meeting.
If you can get your creative and spontaneous partner to show up, that’s a huge win. Keep the meeting brief, because you have a small window of time before the creative one checks out and starts thinking about doing something more fun.
If you’re the creative and spontaneous one, your goal is not just to show up, but to be fully engaged and actually give some input. Oh, and because you’re probably the one who spent too much last month, try not to get offended when your partner rebukes you.
What’s the one thing that you could do better?
Few things reveal the condition of our hearts quite like money. How we handle our finances is one of the greatest visible representation of who we are, and what we value most.
Married people may statistically do better financially than single people, but doing marriage right is hard work. As you communicate well, live transparently, value oneness and work together toward a common vision, you’ll not only get closer to your goal, but you’ll enjoy the journey.
What’s the one thing that you could change about your money habits that would most improve your relationship?
I first shared many of these thoughts in an article I wrote for PropertyInvesting.com here.
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