Smart Couples Finish Rich by David Bach

Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner by David Bach is a personal finance book published in 2001.

Money is the leading cause of divorce, and it’s no surprise given that many couples avoid discussing finances until they’re arguing about them. Bach’s book addresses this issue by emphasizing the importance of couples working together on their finances.

Too often, couples assume they’re on the same page without actually discussing their goals and plans. Being aligned with your partner on financial matters is crucial. When couples collaborate on their finances, they can achieve their goals much faster than if they try to tackle them alone.

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Enjoy!

Step 1 – Understand The Facts & Myths About Couples and Money
Step 2 – Determine the True Purpose of Money in Your Life
Step 3 – Plan Together = Win Together
- Determine your goals:
Step 4 – The Couples’ Latte Factor
Step 5 – Your Retirement Basket
Step 6 – Your Security Basket
Step 7 – Your Dream Basket
Step 8 – Avoid the 10 Biggest Financial Mistakes Couples Make
Step 9 – Plan a Money Date

Step 1 – Understand The Facts & Myths About Couples and Money

When you work together on your finances, you can compound the results. If you don’t, you compound the mistakes you’ll invariably make.

Myth #1: If we love each other, we won’t fight about money
- Truth: Love does not mean no conflict
Myth #2: It takes money to make money
- Truth: It takes discipline and patience, not wealth, to build wealth
Myth #3: We don’t make enough to invest
- Truth: Everyone can invest — even small amounts matter when consistent
Myth #4: Taxes and inflation are under control
- Truth: They’re constant variables — always plan for them
Myth #5: If we don’t talk about money, it’ll be fine
- Truth: Avoiding money talks leads to bigger issues later

Step 2 – Determine the True Purpose of Money in Your Life

Your values guide all life and money decisions
- Ask: “What is the purpose of money in my life?”
Be → Do → Have
- Focus on who you want to be, not just what you want to do or have
List top 5 values
- Not goals or stuff — think freedom, security, family, etc.
Match each value with
- 5 “Do” actions (habits/choices aligned with that value)
- 1-2 “Have” outcomes (tangible goals reflecting those actions)
Review spending
- Does it align with your top values?
- Misaligned spending won’t fulfill you for long
Values rarely change — they stay consistent even as life evolves

Step 3 – Plan Together = Win Together

First, you have to know where you’re starting from. Have a separate file folder for each of these:

Tax Returns
Retirement Accounts
Social Security
Investment Accounts
Savings and Checking Accounts
Household Accounts
Credit Card Debt
Other Liabilities
Insurance
Family Will or Trust
Children Accounts
Real Estate and Other Investments
Finishrich Inventory Planner

What’s the best way to start if you and your partner have never worked on your finances together? Set up a money date (see step 9) + Don’t be too aggressive

Determine your goals:

Rule No. 1 – make sure your goals are based on your values
Rule No. 2 – make sure your goals are specific, detailed, and have a clear finish line
Rule No. 3 – put your top five goals in writing
Rule No. 4 – start taking action towards your goals within 48 hours
Rule No. 5 – enlist help
Rule No. 6 – get a rough idea of how much money it will cost to achieve your goals
Rule No. 7 – make sure your goals match your values as a couple

Step 4 – The Couples’ Latte Factor

The issue isn’t income, it’s spending
- Americans often underestimate how much they waste daily
$5–$10 a day adds up to millions in retirement
- Most think they can’t save it, but usually can
Track daily expenses
- Small costs (coffee, lunch, parking) quickly add up
Society encourages spending constantly
- Fast food and coffee are marketed as “needs,” but they aren’t

Step 5 – Your Retirement Basket

3 Baskets:

Retirement Basket (safeguards your future)
Security Basket (protects against the unexpected)
Dream Basket (fill desires that make life worthwhile)

For retirement, read How To Retire before Mom & Dad and invest – consult a financial professional

Step 6 – Your Security Basket

Safeguard No. 1 – set aside a cushion of cash
Safeguard No. 2 – both of you absolutely must write a will or set up a living trust
Safeguard No. 3 – buy the best health coverage the two of you can afford
Safeguard No. 4 – protect those who depend on you with life insurance
Safeguard No. 5 – protect yourself and your income with disability insurance
Safeguard No. 6 – if either of you is in your 60’s, it is time to consider long-term care coverage

Step 7 – Your Dream Basket

Don’t fall into the “I don’t have a dream” trap – make your life worthwhile and enjoyable
Short Term (dreams of two years or less)
- Put it in a money market account because you need that money soon
Mid Term (dreams 2 to 4 years)
- Invest in short term bonds, funds, or balance funds, depending on your risk appetite
Long Term (dreams 4 to 10 years or more)
- Consider putting your money into growth oriented investments
- Author suggests S&P 500 index funds or Total Stock market funds (look at Vanguard)

Step 8 – Avoid the 10 Biggest Financial Mistakes Couples Make

Mistake No. 1 – Having a 30-year mortgage
- Pay off quickly to save on interest; one extra payment can save tens of thousands
Mistake No. 2 – Not taking credit card debt seriously
- Check your credit rating and take steps to improve it
Mistake No. 3 – Trying to time the market
- Missing just a few key days can halve your wealth
Mistake No. 4 – Buying stocks on margin
- Avoid borrowing to buy stocks due to risk of magnifying losses
Mistake No. 5 – Not starting a college savings plan soon enough
- College is expensive! Use tools like 529 plans to start saving early
Mistake No. 6 – Not teaching your kids about money
- Educate your children on finances to prepare them for adulthood
Mistake No. 7 – Neglecting to sign a prenuptial agreement
- Discuss and sign a prenup to protect individual assets and avoid future conflicts
Mistake No. 8 – Not having a greater purpose beyond the two of you
- Focus on shared goals or charitable causes beyond personal finances
Mistake No. 9 – Not figuring out who is responsible for what
- Define financial roles and responsibilities clearly within the relationship
Mistake No. 10 – Not getting professional financial advice
- Seek advice from a qualified financial advisor, know how they’re compensated (commission vs. fee)

Step 9 – Plan a Money Date

“Couples that plan together win together”
David Bach

A Money Date is a designated time during which the two of you agree to discuss your financial life and work on it
- Does not have to be stressful; it should be fun to evaluate your position in relation to your goals and see how close you are to your dreams
On your first date, clean out the money files
- Think of it like cleaning out the garage – easy to put off but you feel great after you get it done

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