Negotiation, Budgeting & Setting Financial Goals for Couples


Negotiation, Budgeting & Setting Financial Goals for Couples

financial goals for couples

If you and your partner don't see eye-to-eye on money issues, establishing a joint budget can take work. Even if you're both smart with money management, you may disagree on, say, whether buying a house is higher priority than saving for retirement. Certified Financial Planner Craig Schmith says typical goals include saving for college and retirement, buying a new house or changing careers.

See Where the Money Goes

Knowing how you spend your monthly income is the first step to understanding how much you can save and where you need to cut back. One way to do this is to track your joint income and spending for a month, then sit down together and review it. Schmith says he sees clients who budget tightly and those who have no idea how they spend their cash. "They need to know where the money is going," he says, "so they can know if it's spent on things they're getting their money's worth for or not." Using personal finance software can help you to easily track your expenditures and see where your money is being spent.

Talk About Your Goals

Talking about money can be awkward, but it has to be done. One way to start the conversation is for each of you to draw up a list of short and long-term goals, then compare lists and decide which items to prioritize. Once you set your mutual goals, try scheduling regular meetings to talk about your progress. If problems crop up, it's usually better to talk about them than hide them. "I encourage people to be on the same page" when planning, Schmith says.

Consider Setting Up a Joint Account

A Redbook survey found 64 percent of married couples have joint accounts. The magazine says while this approach isn't right for everyone, it can make it easier to track spending and savings and avoid debates over whose account pays which bills. Schmith says it's a healthy sign if his clients are comfortable with a joint account. A couple whose different spending styles make a joint account impossible can have trouble making financial plans. "Ultimately you need to be in it together," he says.

Consider a Range of Options

Usually it's not a matter of choosing one or the other -- say, house or retirement -- but how much you can and want to spend on each. Schmith says he often gives clients a matrix with more than a dozen options: if the breadwinner is looking at a job change that cuts her salary, the matrix can show the consequences of, say, a 10 percent, 20 percent and 50 percent cut. Multiple options give you more flexibility in negotiating a plan you can both live with.