Smart Couples Finish Rich — Book Summary

Smart Couples Finish Rich Book Cover

Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner

by David Bach

Published: 2018 | 368 pages
Rating Amazon:  stars rating 4.7 
Rating by reviewer:  stars rating 4.7 
Author of the article: Aysha Khan
Date of the summary: Nov 10, 2020

Smart Couple Finish Rich is a Financial Guide for couples. It gives practical tips on how to plan finances smartly and lead a financially-secure life.

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Smart Couples Finish Rich Book Cover

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The book "Smart Couples Finish Rich" is a comprehensive guide based on 9 steps. It teaches you the basics of financial planning and then goes deeper into the science of goal-setting, saving up, understanding your values, and then planning a secure future together as a couple. The best thing about this book is that it provides you with both inspiration and a plan of action. It is a book that can cater to couples of all ages and financial backgrounds.

Interesting quotes from the book

It’s not what you know about money — it’s what you don’t know that can wipe you out.

— David Bach, Smart Couples Finish Rich

Money is not an end in itself. It is merely a tool to help us achieve some particular goal. If the way we handle our money conflicts with our personal values, we are not going to wind up living happy and fulfilled lives.

— David Bach, Smart Couples Finish Rich

What determines your wealth is not how much you make but how much you keep of what you make.

— David Bach, Smart Couples Finish Rich

Summary of the book Smart Couples Finish Rich

Smart Couples Finish Rich is undoubtedly a very unconventional financial book: It isn't boring or full of incomprehensible figures and graphs; instead it is an interesting piece which contains easy, straightforward, practical advice step-by-step. The subject of financial planning has been approached by David Bach in a very casual yet logical way and it is also equipped with relevant and thought-provoking case studies. What more can you ask for?

Going further, I would also like to point out that the book has an element of motivation that can efficiently induce the reader's interest and make him want to jump up and get to business. However, I would recommend that you first go through the book thoroughly, make points if you deem necessary and later reflect on all the advices and think of whether you would like to involve your partner before actually acting on the practical steps. Moreover, this book has great food for thought so it can help you to first ask yourself questions relating to your own life and ambitions and serve as a catalyst to untangle the many knots and confusions in your life that you may have been struggling with. Having said that, let us have a look at the subject matter and explore the nine steps as put together by David Bach and see for ourselves if they really can change our lives.

Step 1: Learn the facts and myths about couples and money

The first step is all about learning money management as a couple and also to find a common ground. This step focuses on approaching the subject of financial planning in a smart way, learning the facts and myths about couples and money, planning a future together after knowing exactly HOW money should be spent. It deals with five basic myths and facts that are both the backbone as well as the summary of this chapter:

Myth no. 1

Where there is love, there are no fights relating to money.

Fact no. 1

Money has little to do with how much you love each other.

Myth no. 2

One needs money to make more money.

Fact no. 2

Money-making needs patience and discipline.

Myth no. 3

For investment, you need a big amount of money.

Fact no. 3

You have enough money to invest.

Myth no. 4

Taxes and inflation are under control.

Fact no. 4

It's impossible for taxes and inflation to be in control.

Myth no. 5

Not talking about money is a good idea.

Fact no. 5

Start talking about money unless you wish to die broke.

Step 2: Determine the true purpose of money in your life

The second step deals with one's value system and purpose in life. This is a major step towards financial planning; it not only helps you to clear your mind and reflect on your goals and objectives but also helps you to think of what you hold dear in your life. David Bach has provided a very neat way of determining your purpose and values in life, that is to draw a value circle and fill it with what's really important to you and what is the purpose of money in your life. It helps you to find out whether your financial and spending habits are in tune with your values. By drawing a value circle, you can stop for a while and ask yourself: "Am I really spending money on the right things and on things that mean the most to me? On things and people that I hold dear in my life?"

Step 3: Plan together … win together

The third step deals with organizing your paperwork, getting rid of the clutter and putting all your papers in their respective categories, for example Savings, Investment, Insurance, Debts etc. Then designing your financial plan based on the following rules:

Rule no. 1

Your goals should be in tune with your values.

Rule no. 2

Your goals should be precise, detail-oriented and with marked finish line.

Rule no. 3

Write down your top five goals.

Rule no. 4

You should start working on your goals in the next 48 hours.

Rule no. 5

Make a list of support.

Rule no. 6

Get a rough sketch of the money needed to finance your goal.

Rule no. 7

Your goals should be in tune with your values.…as a couple.

Next comes putting your financial information on paper so you can start with your financial plan, David Bach calls it ‘Purpose-Focused Financial Plan'… Sounds quite cool, isn't it? Make a list of your expenses, basically where the money is going. Then prepare an inventory planner with all information about your savings plan, net worth, real estate and so on. Finally, write down a Purpose-Focused Financial Plan based on all the information. A bit complicated? Well, not to worry, David Bach has you covered, here are the PDF-downloadable documents all ready for you to fill them out and start your journey of becoming rich.

Step 4: The couples' latte factor

The fourth chapter is a very important one. It teaches you to appreciate the power of money and understand its importance; it helps you to recognize how small amounts of money spent casually add up quickly and take the form of a big chunk of your hard-earned money. David Bach wishes to address this spending problem which he calls ‘The Couples' Latte Factor' and insists that this money can be invested and can lead to financial prosperity. In order to tackle this issue, there is a 7 Day Financial Challenge which basically means that you'll track your small spending throughout the day. In order to do this and for this to be useful, you need to do two things:

1. You'll pen down all your spending for the week.

2. You'll spend exactly how you spend no matter how embarrassing it may seem.

Step 5: Build your retirement basket

This step introduces the main idea of how to manage our money in such a way that we end up with enough after retirement. Bach refers to it as a Retirement Basket. He tells us readers that we can build one ourselves by following the pay yourself first strategy; which encourages us to save a portion of our gross income (the total pay we earn without any tax deductions), and invest it for future retirement.

He suggests that we can be considerably better off after retirement by transferring at least 10% of our yearly gross income to retirement accounts. Examples of such retirement accounts include 401(k) plan, the 403 (b) plan and traditional as well as ROTH IRA options. However, some employers do not readily offer these plans and the employees have to specially consult them to install one for them. Bach further supports his claim by providing evidence that our gross pay is at least 30% more than our tax account pay, he also gives examples of personalities who invested 20% yearly in these accounts and now, have nothing to worry about.

Step 6: Build your security basket

Bach, in the next step brings the concept of a security basket which he refers to as the family's financial home. He states that for unfortunate mishaps such as the death of the breadwinner, a divorce, or any health emergency, the couple must have enough money to survive until their financial situation becomes stable.

He tells us that we can build one by setting aside a cushion of cash, store them in banks which grant at least 1% or higher interest rates, so that we can earn on these reserves as well. He also mentions that the couple must sign a prenup before marriage, write a will or a living trust which considers the distribution of all the assets; such as the ownership of property, finances when either or both of the partners die. Bach stresses that the couple must be comfortable in making these decisions in order to avoid problems in future. Bach also recommends that the couple should issue health, life, disability insurances and long term care policies so that when an emergency strikes, the couple has a little less to worry about.

Step 7: Build your dream basket

This step revolves around how to set money aside for all the dreams which the couple had initially had for themselves. Bach encourages his readers to dream big and that they can effectively put those dreams to action if they plan smartly.

The first step is to maintain a Dream worksheet, in which both the partners list their top five dreams which they have long forgotten because of the responsibilities that come with marriage. This worksheet then classifies if the listed dreams are actually possible and if they can be put into action, it also signifies how the partner wants to benefit from the dream. He then encourages the couple to start filling the dream basket, by starting off with investing as little as $5 a month. An alternate way is to invest 3% of an after tax annual income. Bach inspires us to do this by setting up a mutual fund, which is cheap and manages our money efficiently.

Step 8: Learn to say goodbye to the ten biggest financial mistakes couples make

This portion of the book explores what the couple must not do, to ensure a healthy financial lifestyle. The first advice is not to take up on a 30 year mortgage plan. This mistake, Bach regards as not even a mistake but an outrageous scam, because sometimes, the interest rate on these loans make the commodity twice, or even more than twice expensive. A strategy to avoid making this mistake is to increase initial monthly payments, set up a bi-weekly mortgage, which allows you to make two payments in a month. Other solutions include making at least one extra payment each year and switching to a 15 year, instead of a 30 year mortgage plan.

Other mistakes include accumulating credit card debt, which becomes very heavy to off after considering all the interest payments as well; timing markets which Bach bluntly considers useless and not taking college saving plans seriously. He also emphasizes that children must be taught the importance of money and how to save it, which will groom them into becoming a little less dependent on their parents. He also discourages not signing up a prenuptial agreement, considering the number of rising divorces. Bach also encourages couples to discuss their long term goals with each other and divide the responsibilities, such as who is responsible for what portion of the monthly expenses. He also stresses upon the importance of getting professional financial advice.

Step 9: Plan a money date

This last step discusses the importance of planning a money date. It is important that the couples set up a specific date to thoroughly plan out all their monthly expenses. Oftentimes, Bach states that the financial discussion comes around when one partner talks about the amount of money spent on a certain activity when paying the bill. This untimely conversation is likely to lead to a fight and disagreement, disrupting the entire essence of marriage and confiding in each other. Bach also brings up the necessity of making a habit of the couple appreciating each other and how it builds up a healthy relationship. It is also important to act on all the plans the couple has made for their finances, rather than putting them off for a later time and procrastinating about them.

Key lessons from the book Smart Couples Finish Rich

Lesson 1: It is very important for couples to have an open communication about finances in an easy-going and friendly way.

Lesson 2: Both partners should take responsibility of planning, organizing, and keeping track of finances.

Lesson 3: Couples should plan and work together as a single unit for a healthy relationship and a secure future.

Lesson 4: It is crucial to self-analyze your priorities in life and then determine where you're spending the most money.

Lesson 5: You don't need to have a lot of money to start planning, investing and saving.

Lesson 6: You should keep some amount aside to have a happy and relaxedretirement life.

Lesson 7: You should save up so that you always have an emergency fund at hand, should the need arise.

Lesson 8: It is better to plan for long-term goals instead of running after temporary desires.

Lesson 9: Financial planning can be fun and exciting if both couples are on board.

Lesson 10: Having a good understanding in terms of finances makes the relationship stronger and life easier.

Review of the book Smart Couples Finish Rich

I think this book actually has the potential to touch and change lives for the better and for good. What I liked the most about this book is that it is atypical, interesting, and full of both innovative ideas and advices. While reading, I understood that a little planning and effort can really go a long way. Moreover, I feel that this book is not only amazing for couples but singles can also benefit from the wisdom shared by David Bach. It helps you start from scratch and gradually paves the path for a solid financial plan.


In a balanced and smart manner, this book tackles the issues that couples usually face when it comes to money. It contains very useful instructions on how to start the 'money talk', sit together and sort your paperwork and bills, devise a plan and finally, put it in action. This book is highly recommended for couples of all age groups (the earlier you read it, the better it is) and also individuals who wish to take charge of their financial future and get organized.

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