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5 STEPS TO A FINANCIALLY SUCCESSFUL MARRIAGE

ou're getting married soon. You know you should work out a financial plan at some point, but for now all you want to do is plan a perfect wedding and enjoy your honeymoon. You figure you'll have plenty of time to think about setting financial goals after you've settled comfortably into domestic bliss.

     Think again!

     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.
   
   
5. Have savings deducted automatically from your paychecks.
        As little as one hundred dollars deducated from each of your paychecks semi-monthly and invested automatically in an IRA or a second growth fund can produce a quarter-million-dollar nestegg over thirty years! This simple technique is especially valuable for those of you who seem to rely constantly on the zero-balance method of limiting spending.

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