by The Ascent Staff | Aug. 15, 2019
Setting big financial goals with your spouse can be simple and low-stress -- if you know how.
Couples often enter a relationship with their own financial goals in mind. Getting married doesn't mean ditching those goals. Instead, it means compromising to keep both you and your spouse happy and on the same page financially.
Before you start budgeting for your own financial goals, consider the following five steps to get your partner on board, too.
Choose a time to meet and discuss your financial goals. When you meet, both you and your spouse should bring your own list of goals to the table for discussion. Your list should include:
Share your lists with one another, staying flexible and understanding as you go through them. Setting financial goals as a couple doesn't mean you have to give up all of your own goals. Try to find your shared vision choosing goals that make that vision a reality while also including individual goals along the way. This helps make each partner feel like an equal in the process.
After choosing your shared and individual goals, you need to make them actionable. Together, you should discuss the reality of what it takes to meet the goals. This helps weed out the "pipe dreams." For example, anyone could dream of saving $1 million in the next five years, but if you only make $40,000 per year, it's probably not realistic.
Using the SMART method, set goals that are:
Using the SMART method helps make ie easier to eliminate unrealistic goals, putting the focus on the goals you can achieve. Aligning your goals and making decisions together can make you both feel empowered and in sync.
After creating your list of goals, it's time to get working on them. Together, prioritize the goals within each category (short-, medium-, and long-term). Remember to continue compromising throughout this process, prioritizing both shared and individual goals.
Next, you need to look closely at your budget. Starting with your net household income, deduct your total monthly expenses (e.g., mortgage, car payments, utilities, groceries, etc.). These non-negotiable expenses come first; your strategy for reaching financial goals begins with the money you have left after covering the necessities. Together you should decide how to divvy up the remaining money between your discretionary spending needs and your goals. And bear in mind that if you don't leave yourself any disposable income for occasionally enjoying yourself, then you may end up giving up on those goals.
Once you have a budgeted amount for your goals, look at each goal in your list, and break them down into specific steps. For example, if you want $20,000 for a down payment on a house in the next five years, you'll need to save $333 per month. Is this something that fits into your budget? Does it align with your other short-term and mid-term goals? If you find it unrealistic, go back to the drawing board to figure out whether and how you can make it realistic.
Keeping each other accountable for meeting your goals can help you stay on track. It's also a great reminder to stay flexible. Set up regular "meetings" to see where you stand. At each meeting, discuss the progress you've made and reassess your financial situation -- has anything changed, such as your household expenses or income?
Set up rewards to celebrate your successes, too. Each time you meet a milestone, reward yourselves. Showing one another the joy you have in achieving the goal can help keep you motivated moving forward.
Remember that life happens. Don't get upset if you experience a setback; just keep the lines of communication open. Staying flexible throughout the process helps you see the big picture. For example, if you or your spouse should lose your job, you may have to pause your strategy for a while until you get back on your feet.
Also revisit your goals often. You may achieve some goals and find that others just don't fit your needs any longer. For example, if you saved money each month to stock your emergency fund and now you have three to six months' of expenses in a savings account, you can move on to your next goal.
Creating shared goals with your spouse helps you stay connected and may even prevent unnecessary fights about money. With both partners on the same page, you can achieve shared and individual goals, cheering one another one throughout the process.
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