They say finances cause most marriages to fail, but what specifically is the disconnect between couples? More importantly, how can we prevent these issues from causing a division between the lovebirds?
My wife, Kristina, and I have been married for 17 years, and we are on the same page financially. When we didn’t have “the information,” we were on the same page, but it was in the wrong book.
Once we learned to save, invest, and create more income properly, we “magically” got out of debt, designed new income streams, and built a $300,000 investment portfolio.
Fire Writer: Retire & Write
Your marriage, your way. You can run your marriage any way you’d like. You can travel, get into debt, buy new clothes daily, and treat your kids to amusement parks every weekend.
However, once the debt bell rings, it’ll destroy your marriage. As humans, we can’t have it all, at least not early in a marriage. We used to believe in delayed gratification.
When I was a kid, my mom put our toys on “layaway” at KMART. She would make monthly payments until she owned the item one day.
Today, credit cards allow us to live like rock stars early in life. We can also add long-term car loans, student loan debt, and home equity lines of credit, and it’s a recipe for living outside our means.
What is Quiet Quitting?
Before you can get on the same page as your spouse, you must control your own spending. You also must understand the value of living below your means.
Why is living below your means (LBYM) essential? You can only create wealth once you live below your means. LBYM protects you from lifestyle inflation, but more importantly, it stops you from WANTING.
Wanting is the most difficult part of living in a consumerist society. You can EARN your new things by living below your means and maintaining a strict budget.
“I DESERVE” are the two most dangerous words in American society. You deserve nothing. We earn everything by living humbly and modestly. We save for what we want and work together as a team.
Your household should have AT LEAST three budgets (if not more). Your home should have at least three budgets: Spouse #1 individual budget, Spouse #2 individual budget, and household budget.
Your Retirement Planning Guide 3
All these budgets should combine and be well below your total income. Let’s say our hypothetical couple makes $10,000/month.
Spouse #1 budget can be $1,500, Spouse #2 budget can be $1,500, and the household budget can be $4,000. They can use the remaining $3,000 for saving and investing.
The individual budget. I like to divide my individual budget into daily allotments. $1,500 per month equals $50/day. I use this money for food, gas, and entertainment. I cover my budget in “Living on $3,000/month in San Diego.”
The individual budget is key to getting what you want safely. If you want something that costs $300, you can easily save that throughout the month. Instead of eating sushi every day, you can switch to Top Ramen.
Sleep Easy: Make Money While You Sleep
My individual budgeting plan works exceptionally well, and I feel freer than ever. On days when I stay home, my leftover money grows by $50. On many occasions, I find myself having $300 in excess cash that I decide to spend on video games and Blu-Ray discs.
The household budget. You can divide the household budget into smaller budgets. I would split them into at least “expenses” and “food” categories. Run these budgets with an iron grip.
You can run your budget tightly without becoming a tightwad or a cheapskate. You always want to keep your hands open and give freely so that one day you can receive.
But, you want to follow every penny leaving your household. It is very simple to lose track of $100s per month. I write more about my budgeting method in “10 Steps to Save a $1,000 Emergency Fund.”
Saving and protecting wealth. You want to save at least $1,000 per month in your emergency fund. A Tier 1 emergency fund is $1,000, and Tier 2 is $10,000. Once you hit $10,000, you want to strive to reach Tier 3—consisting of six months of expenses.
The Magic of Marriage
Invest to build wealth and grow income. Now for the fun part, increasing your income. With the remaining $2,000 per month, we want to invest for cash flow. I call this income investing.
Most couples need help getting on the same page for budgeting and saving. They have yet to start income investing; however, it is the true path to building wealth (along with real estate).
With the $2,000, the couple can invest in high-yielding products on the stock market, including preferred shares, business development companies, mortgage REITs, dividend ETFs, closed-end funds, and blue-chip dividend-paying stocks.
Investing for income gives you more income. For example, my wife and I received $1,800 in dividends in December 2022—a life-changing amount of income!
How the Rich Buy Their Bling
This is where you can begin to use your money to create cash flow. The cash flow you make is your proper spending budget and how you can live the lifestyle you truly desire.
Your real discretionary income. I wrote an article titled “The Truth About Discretionary Income, You Have Been Lied To” about two years ago.
At the time (May 2021), we earned $423 (without rents) in passive income. That is the amount of money we could spend on ourselves without feeling guilty.
Last month (Dec 2022), our passive income number (without rents) was $2,132. I treated our family of four to a pizza place that cost $125 in total.
I told my son we could return to this pizza place 17 times this month on passive income alone. You must grow your discretionary income by living on a budget.
Budget your way to passive income. Most couples do it the wrong way. They go to work, don’t have a solid budget, use credit cards, and never build passive income.
Real Men Understand Finances
My wife and I went from zero passive income to over $3,600/month (including rents) in less than four years. Now, we use a portion of our passive income to enjoy the finer things in life.
We both have dividend debit cards that funnel our dividends directly to our Cash App accounts. Plus, I am only 41, and my wife is 38. We look forward to growing our discretionary income to $10,000/month or even $20,000/month.
Living on a budget is fun. Your mind loves to create, and creating under constraints is even better. How can you treat your family if you only have $100 in your monthly budget?
Do you grab some McDonald’s and go to the beach? How about going to a national park? Your brain loves to solve problems, so give it a chance.
How We Plan to Retire on Dividends 3
Conclusion. Credit cards provide the easy answer that becomes hard to solve later as you’re swimming in debt. I was married almost 13 years before I got “the information.”
I could have cried when I saw $1,800 in dividends in one month. Even if my dividends never grew from that number, it represents a fantastic achievement for my wife and me.
Coming from $77,000 in debt to becoming debt free and creating $3,600 in passive income is a beautiful story. I hope this article finds you and yours well. Budget, save, and income-invest your way to financial freedom. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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