Book Review: Smart Couples Finish Rich

If you do much personal finance reading, and as you might guess from the fact that I spend a sizable portion of my free time writing a personal finance blog, I do, you come across the same names of commonly cited personal finance advisers again and again.  Names like Orman, Kiyosaki, and Ramsey start to line your shelf, appearing again and again.

David Bach also starts to show up multiple times.  I’ve already reviewed two of his books, and now I’m going back to one of his earlier books, Smart Couples Finish Rich.  Is it a worthy read, even after going through his later follow ups?  We’ll have to read on to find out!


Smart Couples Finish Rich starts with an introduction that recalls how David and his (then) wife Michelle had trouble organizing their finances when they first got married.  He notes that even though they were both financial professionals and very smart, neither of them had any knowledge about how to combine their finances as a couple.  His book is an attempt to provide that knowledge to other couples.

The rest of the book is broken up into nine steps to help couples get their money under control.  The first step looks at breaking some of the myths that surround couples and money.  From ‘if we love each other, we won’t fight about money’ to ‘it takes money to make money’, there’s several fallacies that take hits throughout the chapter.  The chapter ends with a quiz, to help determine how knowledgeable you both are about your finances.

Step two involves looking at the values that are important to you, to find out what role money should play in your life.  Bach recommends constructing Value Circles (TM), where each partner notes five values that are important to them, to help guide the rest of their financial goals.  The third step looks at putting those values into practice, creating financial goals to help meet their needs.  There’s also discussion of how to get your financial information in order, so you could have a better way to keep your things organized.

Step four looks at one of Bach’s most famous concepts, the Latte Factor(TM), specifically looking at couples.  The Latte Factor, in case you haven’t heard it, is the ability of a ‘small’ daily purchase (say, that morning coffee) to turn into a substantial sum if saved and invested throughout your life.  To find your Latte Factor, Bach recommends keeping track of your finances for seven days to see where you tend to spend too much (and no cheating by changing your financial habits).

The next three steps look at creating three baskets of savings and investments to meet your goals: the retirement basket, the security basket, and the dream basket.  Step five is about building the retirement basket, mainly by paying yourself first using pre-tax retirement accounts.  Bach focuses first on 401(k) plans and similar employer provided plans, but also covers IRAs (including Roth IRAs) and the retirement plans available to self-employed people.  The chapter ends with a series of steps to make the most of your retirement account(s) once started.

Step six looks at the security basket.  It starts by sharing tips on how to build up an emergency fund, from how much to save to where to put it.  There’s also discussions on creating wills (or setting up a living trust), getting health coverage, and building up other insurance policies.  The seventh step covers the dream basket, encouraging each couple to make a list of their five biggest dreams as well as how much they would cost.  There’s also quite a bit of information about the types of investments available for different time frames.

Step eight looks at mistakes that couples make with their money.  From taking a full 30 years to pay off a 30 year mortgage (Bach recommends making extra payments to pay off the mortgage earlier) to buying stocks on margin to not consulting with a financial adviser, there’s a lot of advice provided here in a variety of areas.

The ninth and final step in the book looks at a plan to increase your income, by building up your worth in your employer’s (or clients’, for the self-employed) eyes and then asking for a raise after numerous weeks of preparation.  The book ends with a reminder that as important as money is in life, it’s nothing compared to the love we have for our partners.


Bach’s writing style is easy to follow, with a relaxed tone and no unnecessary financial terms (and the necessary ones are fully explained).  The book is filled with great ideas and other concepts, even moreso than his later books.  The emphasis on communicating with your partner makes the book much more valuable to anyone in a long-term relationship.


One of the biggest problems with Bach’s books is they tend to be repetitive; if you’ve read The Automatic Millionaire, many of the same concepts are covered (the Latte Factor, automating your investments, etc.), not providing you with much more information.  If you are not (yet) in a long-term, stable relationship, the emphasis on working with your partner is likely to be frustrating, at least.


Smart Couples Finish Rich is a very solid, well-organized book that should help couples get on a more solid financial footing and get on the same page, money-wise.  If you’ve read some of Bach’s other books, there’s much in here that is going to sound familiar.  That said, if you are part of a couple, this book will definitely have some unique points for you to consider.

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