Communication is a vital part of our relationships. Some feel being able to speak with your spouse about any subject is a sign of trust and healthy marriage. However, certain subjects tend to be more sensitive and cause more concern.
This includes money, which is a common challenge for different couples. Families of all income levels differ over how and where money is spent. Wealthy couples may battle over where to invest and what is or is not wasteful spending. Couples with money challenges must prioritize scarce resources.
Thankfully, there are similar best practices for various situations.
Here are smart strategies for couples to set financial goals:
Set Common Goals:
The concept of achieving something together is powerful. Setting financial goals teaches us to compromise and better understand how our sweeties’ view money. You must communicate to truly separate wants and essentials. While opinions vary; debt reduction, emergency funds and retirement planning are wise goals for all couples.
Be Specific and Measure Success:
Avoid generic goals and set specific targets. Investing, saving and debt are broad terms that should be defined for your situation. This includes budgets, timelines and being accountable. For instance, aim to save $200/month at $100 apiece in a joint account at XYZ Bank over the next year. The goal is more likely to be achieved since each person has a stake in the success.
Divide the Goal Fairly:
We can keep the peace by adjusting for differences in income and time. The higher earning spouse may invest a greater share to retirement accounts or a child’s college fund. Time is also a valuable asset. Stay- at-home spouses may research and choose investments or track progress on savings goals. These are crucial aspects of success that do not require money.
Review Your Progress:
Check how you’re tracking towards the goal in stages to ensure each person is committed. A 1 year goal can be reviewed every 3 months. In cases where your hubby/wife is not meeting their commitment, use some tact and don’t jump to conclusions. Was there an unexpected expense or pay cut? If so, you can adjust the goal to more realistic levels. You can also earn karma points and step up your own contributions to make up the shortfall.
Collaborate Your Skills:
Separate skills can be meshed for financial goals. As an example, a couple can combine money skills and social media savvy to stay informed on financial topics. Teaming up has value for business opportunities, as well. Film Financier Elliott Broidy joined his wife Robin, a movie producer, for the film ‘Snake and Mongoo$e in late 2013. The pair blended unique skills to create a project together. You too can enjoy building something in tandem by matching different skills.
Don’t Keep Money Secrets!
Your money history can cause unpleasant surprises in direct and indirect ways. A spouse’s spotty credit report may require more money for a mortgage down payment than a couple planned for. You don’t have to drown each other in details, but be candid about money.
If you are prone to risky impulses when investing, be upfront or consider hiring a financial planner. We also risk losing trust if these surprises prevent us from closing on a mortgage or effective savings. Short term setbacks such as job loss, wage cuts or surprise expenses should all be discussed.
Make sure to toast your success, no matter how small. If you’ve reached your savings target for the past 6 months, enjoy a romantic dinner or family day trip. We get instant gratification by enjoying small milestones along the way to long term goals.
Money is a topic that affects nearly all couples. By setting and achieving financial goals, money brings us closer together.