Better marriage for better investing success

​A better marriage leads to better investing success…which contributes to a better marriage. So, consider bringing your spouse on board with your investing.

Money issues rank just a bit behind infidelity as one of the major causes of divorce. And a contributing factor in that may be keeping separate finances. Individuals who keep and manage their money separately from their spouse often find it easier to consider leaving the marriage. In contrast, working together to create, work toward, and achieve your financial goals can substantively deepen and strengthen your bonds as a couple.

It’s really just common sense. Consider two scenarios:

- A good investment that pays off hugely: You’ll celebrate it more joyfully if you made the investment decision together.

- A bad investment that loses money: Do you think you’ll fare better if it was a joint decision…or if it was just an instance of you lost a pile of money, while your spouse had nothing to do with it.

Managing money together creates more togetherness

Research at Indiana University’s Kelley School of Business found that couples who merge their finances in joint accounts and make financial decisions together stay together longer and report being happier overall in their marriage. They fight less frequently about money, and they feel better about their finances. The study found that many couples who worked together on their finances reported that they felt more of a sense of commitment to their marriage, more of a feeling like “we’re in this together”.

In contrast, data from the US Census Bureau shows a correlation between the increasing divorce rate and the trend of couples not combining their finances.

Spouses who merge their finances and make investment and other financial decisions together tend to have financial goals that are more closely aligned and to do a better job of achieving those goals. They experience less overall stress and enjoy greater emotional well-being.

Making your spouse your investment partner

So, how do you bring your spouse on board as your investment partner? – Start with the basics and then work your way up. Having open, honest conversations about money is the first step toward empowering you, as a married couple, to create wealth for yourselves. Good communication is essential to the success of any relationship, and that includes communicating about money.

The following is a brief “how to” guide for making your spouse your co-investor:

1. Find out what money means to each of you. To some people, money represents financial security – to others, it means freedom. Talk with your spouse about each other’s attitudes and beliefs in relation to money. Find out whether they’re more of a natural “saver” or “spender”. Understanding each other’s “money mind” will help in finding common ground from which you can align your financial goals and map out a plan for building wealth.

2. Set financial goals together. Now that you know each other’s basic viewpoints on money, you can talk about what you want money to do for you and how you want to use it.

You’re going to have a number of financial goals, some short-term and some long-term. If a financially comfortable retirement is one of your long-term goals, then you might, for example, want to make some of your investments in a tax-advantaged Roth IRA. Maybe you want to make a few short-term trades to pay for a nice vacation. Perhaps you want to dedicate some conservative investments in bonds to help fund your children’s education.

The financial goals you set will influence your decisions on what type of investments you want to make. You might try using a few short-term commodity futures trades to fund a nice getaway weekend together…but you probably don’t want to bet your child’s college education on whether pork bellies open higher Monday morning.

3. Create a budget to finance your investing. Sitting down and crafting a monthly budget is one of the simplest – and smartest – steps you can take toward building wealth. Unfortunately, it’s also a step that’s overlooked by many people. It’s essential to track your income, to be aware of all your expenses, and to craft a specific plan for saving money – dedicating a specified part of your income every month to be funneled into investment accounts. Couples who simply take the time to work out a monthly budget are often rewarded by finding some “free money” – like discovering that you’re both paying for an Amazon Prime membership when you only need one for the two of you.

A savings plan that DOESN’T work: Too many people approach saving and investing with the attitude of, “Well, I’ll just wait and see how much money I have left over at the end of the month.” The vast majority of people who take that attitude never seem to find any money left over at the end of the month. In order to be a successful investor and build wealth, “savings/investments” has to be a specific item that’s included in your monthly budget just like every other financial obligation. If you don’t make investing a specific priority, it’s very doubtful that you’ll ever make it a success.

4. Keep becoming better investors. One of the potential benefits of making your spouse your investment partner is that you may discover that they’re just naturally a really good trader – maybe even a better natural trader than you are. Bringing them in on your trading might significantly bump up your winning trade percentage.

But regardless of which one of you has a better natural feel for investing, or comes to the marriage possessing more knowledge about investments and trading, you should both dedicate yourselves to continuing your investing education. You’re never going to hit a point where there’s nothing else left for you to learn about investing.

Don’t be discouraged if your spouse or partner arrives at the altar with virtually no knowledge of investing. We were all at that rank beginner point at some time. But you learned about trading the forex market, and your spouse can, too.

You may even want to occasionally set some specific goals for increasing your investment knowledge and expertise. For example, you might agree on a plan for one of you to spend the next month becoming an expert on the Swiss Franc or on China’s importing of silver.

Two heads are better than one

While you’re busy watching every tick to see if the British pound is going to fall off the cliff that it’s been teetering on the edge of for the past hour, your spouse just might save the trading day by spotting the fact that, “Hey, I think Chevron might have bottomed out here.” Being able to cover more investment ground is just one of the many advantages of working at investing as a couple, rather than just on your own.

Money can either be a sore point and a source of stress in your marriage – or it can be the vehicle that you and your beloved use to build wealth and create the life of your dreams. Working together to craft and execute investing strategies will make it more likely that you enjoy the latter scenario there.

Make investing a game of life that the two of you enjoy playing together. A nice side benefit from doing that will be a stronger, more fulfilling and meaningful marriage.