Book Review: Smart Couples Finish Rich

“Smart Couples Finish Rich” by David Bach

                Smart Couples Finish Rich is a nine step self-help book that helps create a better and rich future for you and your partner.  I was skeptical about reading this book at first mainly for the fact that it is probably a boring book that simply helps you with your finances.  However, I was completely wrong.  This book was easy to follow and understand.  David Bach is a great financial coach and he did a great job about discussing the topic that splits most couples up: money.  The whole point of Smart Couples Finish Rich is to help couples look at their financial picture and see where they are and help improve their financial standing.  Bach lists nine steps that he believes will help everyone couple “finish rich”.

1.       Learn the facts and myths about couples and money

“It’s not just about the money” (15), this is something that Bach brings up and states that this is something that most couples overlook and also says that “It’s not what you know…it’s what you don’t know” (16).  In this chapter, he lists five facts that couples need to know: 1) Money has very little to do with love…but with how much you fight, 2) It takes very little money to make money as long as you’re patient and disciplined, 3) Everyone makes enough to invest, 4) Taxes and inflation are never going to be under control, 5) If you don’t start talking about money, then you’ll die broke.  This chapter helps you understand the facts so that you and your partner are able to be on the same page when it comes to your finances.  At the end, Bach gives you and your partner a “Financial Knowledge” Quiz so you know how similar you are with your finances.

2.       Determine the true purpose of money in your life

This chapter explains that values that you and your partner each hold.  Bach has you create what he calls a Value Circle where he has you lists your five top values such as family, security, health, and etc.  This activity is so that you know what really is important to you and your partner.  These are the values that you are committed to and that shape your life even if it does not reflect finances at all.  This is important because this allows you to see what your life revolves around so you can shape it the way you want it and to see the values that you cherish.

3.       Plan together…win together

This chapter explains the importance of having an organized system to file your finances under in different categories.  This will help with not having to deal with the clutter that finances bring along.  This will allow you to categorize everything from important documents to receipts that you may need.  Bach also has what he calls a “Purpose-Focused Financial Plan”.  This focuses on the five core values that you listed earlier and lets you live your life in line with these values.  He lists seven tips that help you create your goals: 1) Make sure your goals are based on your values, 2) Makes your goals specific, detailed, and with a finish line, 3) Put your top five goals in writing, 4) State taking action towards your goals within 48 hours, 5) Enlist help, 6) Get an idea of how much money it will cost to achieve the goals, 7) Make sure you goals match your values, as a couple.  These allow you to create goals that are realistic and able to achieve while you and your partner share the same values.

4.       The Couples’ Latte Factor

The Latte Factor is when you make small purchases daily and you don’t know how it affects your personal finances.  Such as buying a Starbucks coffee daily, which is simply a $3 purchase, however that accumulates to $15 per week.  This is when Bach gives a Seven-Day Financial Challenge where he challenges you and your partner to write down everything you’ve bought within a seven day timeframe.  This shows where your money is actually going towards and how you can potentially cut these small purchases out of the picture. 

5.       Build your retirement basket

This chapter explains the importance of building your retirement basket; meaning your security during your retirement years and building up towards it.  Bach’s first principle is to “Pay Yourself First”, the idea of taking your income first and putting it in a savings account so it can be put towards something you want.  Bach explains the importance of retirement accounts such as 401(k) plans, IRA accounts and Roth IRA accounts, and the ways to investment properly.

6.       Build your security basket

This chapter explains the importance of building your security basket; meaning having the financial security you will need.  He lists six things to do to protect yourself: 1) Set aside a cushion of cash, 2) Must write up a will or living trust, 3) Buy the best health coverage you can afford, 4) Protect those you depend on you with life insurance, 5) Protect yourselves and incomes with disability insurance, 6) Consider Long-Term Care coverage. 

7.       Build your dream basket

This chapter explains the importance of building your dream basket; meaning that you will be working towards things such as buying a new car or a dream vacation.  In other words, they are simply just goals you want to achieve.  Bach gives you the knowledge of how to fund your dream basket and the ways to get more money out of things such as a Mutual Fund and discusses the different types of funds and stocks you may come across to help build your dream basket.

8.       Learn to avoid the ten biggest financial mistakes couples make

This chapter lists the ten biggest mistakes that couples make financially: 1) Having a 30-year mortgage, 2) Not taking credit-card debt seriously, 3) Trying to get rich quick by day-trading, 4) Buying stocks on margin, 5) Not starting a college-savings plan soon enough, 6) Not teaching your kids about money, 7) Neglecting to sign a prenuptial agreement, 8) Not having a greater purpose beyond the two of you, 9) Not figuring out who’s responsible for what, 10) Not getting professional financial advice. 

9.       Increase your income by 10 percent in nine weeks

This last chapter explains how you can increase your income by ten percent.  In which, Bach gives you a “Proactive Income nine-week plan” to let you be able to work towards increasing your income.  Week 1: Get real, Week 2: Write down exactly what you want, Week 3: Clean up the mess, Week 4: Get clear on how you add value, Week 5: Focus on the 80/20 rule, Week 6: Put yourself in play, Week 7: Practice asking for the raise, Week 8: Ask for the raise, Week 9: Celebrate your success.  Bach gives you the necessary tips to let you ask for a raise at work and to ultimately increase your income.

 Take in consideration, that I simply summarized and bulleted the main points of each chapter and not go into full explanation.  However, I highly recommend this book to you and your partner.  It gives you the insight on you can “Finish Rich” and gives you the “Smarts” to be a smart couple when it comes to finances.  It also gives you exercises, to put the advice that Bach gives you into application towards your life so you are simply not just reading the book for the purpose of reading.  I found that this book was very insightful and even though I am not married this gave me knowledge that I can use now and when I do get married.  I hope you do take the time to read this book as a couple so you can ultimately “Finish Rich”.

Bach, David (2002), Smart Couples Finish Rich