Financial Goals for Couples
There are two parts of setting financial goals for couples which can be tricky. The first is the “setting financial goals” part, and it comes with its own rewards and challenges. It’s the other part of financial goals for couples that’s often the trickier of the two, however – it’s that part about “for couples.” We’re going to start with that.
Let’s assume if you’re talking about your financial future together that this is a pretty serious relationship. You may be married, or living together, and you no doubt know each other rather well by now. Maybe you get along most of the time, or maybe you have your moments (what couple doesn’t?) when things get a bit heated. Either way, what I’m about to say is not a reflection on your relationship so much as a hard reality of the topic itself.
It’s hard for most couples to do the money talk.
Maybe that’s natural, or maybe it’s cultural. Maybe some things were more straightforward when one party controlled everything and the other made dinner and kept quiet. (I didn’t say they were BETTER – I said they were more STRAIGHTFORWARD.) Whatever the case, the reality is that money discussions are often some of the most emotional and potentially volatile of any relationship.
They’re particularly difficult if the couple is having money trouble, but even something positive and forward-looking, like discussing financial goals for couples like yourselves, can open up unexpected emotions and reveal some uncomfortable differences in how we process money – and maybe life along with it.
First Steps for Setting Financial Goals (As a Couple)
I’m going to assign you a little pre-discussion reading to help you get started. Find a time and place to sit down together without interruption or distraction and talk about them when you’re done. You’ll each summarize what you’ve read and share your thoughts and feelings about it. It’s a wonderful way to begin wrestling with something as big as financial goals for couples by starting on “neutral ground” and building from there.
Start Reading
The first article is “Financial New Year's Resolution Goals for Any Income” by my collegue, Katherine Davis. Don’t let the title fool you – this is great, practical advice for any couple trying to take more effective control of their short AND long-term financial lives, no matter what time of year it happens to be. Katherine will walk you through setting goals which are neither too ambitious nor too “safe,” and creating a household budget which can start moving you towards those goals NO MATTER WHAT YOUR HOUSEHOLD INCOME. After you’ve read it, bookmark it in your browser’s “favorites” for easy reference moving forward.
If you’re the person reading this post right now, this is your assignment. Be prepared to summarize it for your cohort in love.
The best time to start setting your goals is now. the goalry mall is here to help.
The second article is for your amazing partner – the one you liked so much before you started trying to establish good financial goals. It’s called “Financial Goal Definitions and Examples: Money 101,” by my colleague and inspiration, Brandy Woodfolk. Brandy is the master of taking big ideas and making them manageable and clear, and of talking about big changes and scary choices in ways that make them seem so... DOABLE for the rest of us. (And honestly, that’s a big part of what the Goalry family is all about.)
Here she talks about financial goals through the SMART lens – Specific, Measurable, Achievable, Relevant, and Time-bound. She talks real talk about making it all happen and the practical things within our reach to get there. Her post contains a half-dozen potential conversation-starters for yourself and your significant other, not to mention the good times you’ll have as he or she tries to summarize and explain what they read and what they thought about it.
Honestly, you can’t help but talk about all the many ways of thinking about financial goals for couples at that point. And if there’s any initial discomfort in the topic, you have the articles to blame and/or reference while you work through those emotions. Don’t stuff them down – they’re part of the process. Just don’t let them take over. They’re the pickles and onions, not the burger.
Be Willing to Budge(t)
Once you’ve established a list of mutual goals (they don’t ALL have to be the same), it’s time to talk about how to get there. If you’ve done the assigned reading (see above), you already have some ideas about how to start. Many details may vary, but ten times out of ten, reaching short or long-term financial goals for couples means sitting down together and making a real household budget.The kind that you use, and discuss, and adjust, and reference, and apply. Consistently. For real.
I’ve written elsewhere about what it takes to put together a useful budget. Keep in mind that no matter how much you genuinely like one another, talking about money can be emotionally loaded. Just acknowledging this in advance can go a long way towards helping you both keep things on track and away from whatever personal land mines may be hidden within. It is in any case a TERRIBLE time to try to address unrelated sore spots in the guise of “budgeting.” If you’re not both on board with the same basic goal, it won’t work.
Remember, we’re talking about financial goals for couples – not “financial goals for individuals who happen to be in a relationship but whatever it’s not really his/her business what I do with my money.”Just trying to talk real talk, my friends. And don’t worry – I’m mostly talking to those OTHER couples. I’m sure the two of you are doing GREAT!
Control The Parts You Can
Once you have a budget going, it’s time to look at the short-term things you can do to build towards your financial goals. Obviously the ideal situation has you both depositing into some sort of savings account or investing together with the endgame in mind. If you have the disposable income to do so without dramatically altering your current lifestyle, that’s awesome. Enjoy the process; usually, working towards financial goals for couples requires more focused change and maybe a little sacrifice.
Many of us, however, are living more or less paycheck-to-paycheck. Hopefully we have some form of retirement through our employer, but other than that, many Americans are simply doing what we can do to get by. Honestly, we consider it a win if we’re not actually behind on anything important most months.
There are ways to shave your monthly expenses which require little more than time and commitment to make them happen. Utility bills can be reduced with a little care and attention. Your cable and cell phone bills are usually up for negotiation, especially if you’re willing to cut back on features you don’t actually use very much. Obvious things like taking your lunch to work more often or making coffee at home instead of stopping for an $8 cup every morning add up quickly.
These changes aren’t DIFFICULT so much as they are DETAILED – they require focus and daily attention, not actual suffering. If your long-term goals are truly important to you, start making the little changes that can help get you to them.
Like, today.
Of course, it may be that bigger changes are called for.
Refinancing your mortgage to reduce your monthly payments (or raise them to pay your home off more quickly).
Taking out a debt consolidation loan to knock out high interest credit cards or other outstanding high-interest debt and replace it with a single monthly payment on better terms.
Moving to a smaller place or to a different location.
Buying a used car and keeping it until it won’t run anymore instead of replacing new vehicles with newer ones every few years.
Mutual Support
It doesn’t hurt to periodically take notice of the things your partner is doing to contribute to your long-term goals. If he’s taking his lunch to work more often even though you know the guys usually go out almost every day, thank him from time to time. If she’s paying attention to credit card statements to catch surprises or fix errors, or spends two hours renegotiating your cable and internet package, tell her how amazing that is.
I don’t mean to go all couple’s counseling on you, but accomplishing financial goals for couples means paying attention to the “couples” part as much as it does the “financial” stuff.
Financial Goals for (Other) Couples
What are other partners talking about by way of THEIR long-term hopes? Think Advisor was wondering the same thing recently and turned to a survey by the financial group Truist to find out. This particular survey focused on Millenials:
As the oldest millennials turn 40 this year, many members of this generation are pursuing life milestones different from their parents’. According to the survey, the top three goals for those with a financial plan:
Debt repayment – 57%
Travel – 48%
Increasing the amount they save for retirement – 45%
These priorities outpace milestones such as homeownership, cited by 40%, and starting or expanding a family, cited by 30%.
Fewer than half prioritized owning their own home, and fewer than a third mentioned making more little people? Who would have guessed! And that’s not even the most interesting part:
Eighty-six percent of millennials in the study said they had established personal financial goals for the next five years. At the same time, 69% reported that they had not created an emergency fund and 68% did not have a non-retirement savings account.
Golly jeepers, kids – I don’t want to seem judgey or anything about other people’s financial goals for couples, but this strikes me as a fatal flaw in planning. I love the idea of paying down debt and increasing your savings for retirement, but emergencies don’t usually wait until your other needs are taken care of to start turning things upside down. If we were able to anticipate them accurately, they wouldn’t be emergencies!
I respectfully suggest getting a bit more serious about some liquid savings starting NOW. Once there’s a little cushion built up you can get back to all that traveling and whatever else is on the priority list. Below, you can take a look at some of the best savings account options out there:
Of course, those are what OTHER couples are prioritizing. I’m certain the two of YOU are being far more practical, yes?
He Wants; She Plans
I’ll give an example from my own life a decade or so back. I’d just married the most amazing woman and we were just starting to work through the realities of being an “us” instead of a “she” and a “me.” Naturally, we’d talked about our respective dreams and long-range plans before, but this time we were doing so as two people with our names on the same checking account.
My basic strategy was simple: I wanted to travel someday, and be able to eat out without having to check my balance every time, and maybe see a few Broadway shows when they came to Chicago. I wanted to pay off a few credit cards and my car, and help my kids with college when they were ready. Oh, and I wanted to buy a dart board for the basement. (That last one wasn’t quite on the same scale as the others, but I really couldn’t stop obsessing about it now that we had a basement.)
My plan for making those things happen? Well... I WANTED them, and as a hard-working American, I figured they had to happen sooner or later. I honestly felt like I was doing what I could already. What difference would writing stuff down or making a spreadsheet or whatever actually make? That would just take time away from shopping for dart boards.
My wife was fine with my list, which I figured meant we’d mastered financial goals for couples and that should be the end of it (so let’s order pizza and see what’s on cable!) Her list didn’t include a dart board and there were a few details she’d have phrased differently, but those were things we could work out easily enough.
She was less impressed with my “plan” for getting there.
Suddenly... Spreadsheets!
Her plan, as it turned out, had all of these... NUMBERS on it. She knew exactly how much she had in savings (well, I did too – except for me it was “zero”) and what her bills were every month. She knew how much she set aside from each paycheck and what interest rate it was earning, and had a rough idea what it would cost to replace the garage (oh, yeah... add that to my list, too, I guess). She knew what was involved in terms of time and money to get tickets to a real show in Chicago, and what she currently owed on her credit cards (now it was HER turn for the answer to be “zero”!).
She did math and everything. It was impressive, at least until she announced that at the rate we were going, most of the stuff I wanted to happen simply wasn’t going to be affordable without some changes to our lifestyle and spending habits. She had a few ideas about saving on utilities and helping me put together a workable budget and maybe I could start taking my lunch a few days a week if helping my kids with college was still important to me.
I didn’t much appreciate this approach – not even a little. I found it negative and discouraging and far too much emotional and practical work. Before she’d even finished offering me her thermodynamic lunch bag, my emotions had taking over and I mostly just wanted to yell and maybe throw something. Thankfully, this remained largely internal. Actually breaking things sets you back financially, and too much yelling isn’t good for your relationship.
Wanting stuff is, unfortunately, not the same as setting financial goals. Being honest with one another about what you want is super-important, but it’s not an actual PLAN. Be aware that talking about financial goals for couples can be unexpectedly emotional because it’s not just about what each of you want; it’s about what each of you are willing to do to get there, and how that will begin to impact you both, starting right now.
Oh, and in case you’re wondering, we reached a successful compromise in our discussion about setting financial goals. We decided to do it her way, with a few minor adjustments (I got the dart board). I still feel pretty good about OUR solution. You’ll have to work out your own with YOUR significant other.
Conclusion
Unless they’re truly outrageous, your financial goals are attainable. No matter what your current financial situation, it can be improved. And no matter what the statistics say, if you decide to make it work together...?
You got this.
Let us know if we can help.