When asked, “what is the most important financial decision you’ve made?,” most people typically include items related to living within their means, saving for the future, investing, estate planning, insurance, and other personal finance topics. While these are all essential components of a sound financial strategy, I contend that the single most important financial decision most people will make is who they decide to marry. This may seem surprising to readers, but it’s the truth. Who you choose as your bashert is more important to your wealth than your asset allocation, retirement accounts, or pursuing a high paying career.
You don’t need to take my word for it. Legendary investor Warren Buffet seems to be of the same mind. At the 2009 Berkshire Hathaway annual meeting, he told the audience: “Marry the right person. I’m serious about that. It will make more difference in your life. It will change your aspirations, all kinds of things.”
Below, based on my observations over the nearly two decades I’ve spent working with families, I outline the ways in which choice of spouse can be the biggest force in creating wealth or eroding it over time. As you read through the article, be introspective on what you can do to improve your relationship and handling of money; and pay attention to financial red flags to consider when dating a potential life partner.
Spender or saver: The most obvious impact spouses have on the family nest egg stems from whether they are a spender or saver. There are some people who need to spend every dollar they have. They may love expensive things or just simply too many things. Every penny in their bank account will be spent if they see it. It’s a sickness that can force your family into the poor house. There are, on the other hand, people who ensure they always have an ample cash cushion, they clip coupons, live within their means, and actively look for discounts when they need to make a purchase. It only takes one spouse’s irresponsible spending habits to derail a family’s finances.
Money expectations: Some people are delusional about their finances. Avoid these people or spend the time to educate them.
I’ve met with couples with a primary breadwinner earning a decent salary and a second spouse either unemployed, working part-time, or at a low paying job. That spouse still envisions a life of luxury, vacations, and living in a large home in a nicer part of town. I share this dose of reality: “You don’t get a pass on math.” If you do not have a high household income, you can’t live an extravagant lifestyle. You will need to make compromises on where and how you live. I often play the bad guy when I tell couples that they are not entitled to a five-bedroom/five-bathroom house in [insert expensive frum community here]. You either both need to choose high paying careers, put in extremely long hours, or make personal sacrifices to make this feasible.
Spouses who don’t come to terms with this reality will likely saddle their family with an insurmountable level of debt and their financial struggles will only compound going forward.
Spouses who recalibrate expectations can make the conscious decision to live within their means. This may mean buying a smaller house, choosing a less desirable part of town, not going on vacation, never eating out, and wearing old clothes. Making these decisions with eyes wide open leads to enjoying living a life that they can afford.
Investor or hoarder of cash: Most people understand that they need to invest to meet future goals. It’s very difficult to be financially successful if you aren’t putting your capital to work in stocks, real estate, or other businesses that appreciate over time. Assets that aren’t growing will experience the corrosive effects of inflation. If your spouse insists on keeping a pile of cash sitting on the sidelines and is unable to take even a modest level of risk to grow your money, it will adversely impact your family’s future lifestyle.
Money mindset: It’s important to evaluate whether your significant other views money as a tool or a scorecard. Certain people have too much of their identity tied to their money and the things that money can buy. Sadly, this is not an uncommon characteristic, especially in some Jewish communities. This relationship with money will put your family on the hedonistic treadmill, where buying goods will spark temporary joy in your life, followed very quickly with losing interest, becoming depressed, and needing to buy something else. This is an expensive and futile way to live.
On the other hand, if your spouse views money as a tool that allows them to live a Torah lifestyle, enjoy themselves, help others, and do mitzvot, this will enhance one’s life and financial well-being.
Supportive or critical of professional pursuits: It’s rare for someone to leave high school, college, or even graduate school, and immediately start earning a high salary. Starting a business, working your way up the corporate ladder, or developing a reputation in your field doesn’t happen overnight. It’s common for careers and income to be built up over time. As the saying goes, “good things come to those who wait.” It’s imperative to have a spouse that can appreciate this reality and remain supportive during the process. Showing “support” doesn’t always mean agreeing with the approach you are taking; it may require offering constructive feedback when necessary. However, the key is for the couple to understand that most successful careers require playing the long game.
I have seen this play out on multiple occasions over my career. An impatient spouse who didn’t support the necessary time investment inhibited the other’s ability to reach their full career potential. This led to a stagnant income and an unfulfilling professional life.
I have also met with couples where both spouses are supportive of one another in their career pursuits. This has led to tremendous financial rewards, professional recognition, or both. Finding a partner who is willing to go on this journey with you and will remain supportive along the way can be a pivotal difference between earning a livable wage at a dead-end job versus creating a career and lifestyle of which you are both proud.
Dual income Life is full of financial speed bumps. A recession or sudden job loss can happen. Surprise expenses constantly arise, a leaky roof, legal dispute, unforeseen medical expenses, and so forth. These things happen to everyone over the course of their lives. If both spouses are working and contributing financially to the marriage, this can help ease the stress and financial burden and will help the household achieve their long-term financial goals.
Divorce is costly: A failed marriage is the quickest way to lose half your wealth. I used to think that day trading, gambling, or buying the latest cryptocurrency were the most effective methods of losing money. However, all these things pale in comparison to the cost of divorce, which, incidentally, is often precipitated by disagreements or strain over the family’s finances.
Not every marriage lasts and there is a system for handling divorce. However, it’s important to do everything you can to ensure that you and your spouse are on the same page about money from the onset, or it can lead to very unfortunate and costly consequences.
Personal finance is not a particularly romantic topic. Nor is it what most people think about when finding their bashert. But it should be! Money is a tool that will allow you to live the life you want. If you are dating, take the time during the courting stage of your relationship to ensure that you are both on the same page about money. If you are married, it’s worth investing time in discussions about your finances and the role it plays in your lives. Be honest and introspective on your views, behaviors, and history with money. It may make an extremely positive difference in your relationship.
