Tips on Setting Personal Finance Goals for Married Couples
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Play to Your Personalities
Money can be a source of conflict for many couples. A key step in avoiding arguments is understanding your financial personalities. While it might be easier for two savers to get along financially than a saver and a spender, both personalities can be accommodated through the use of a household budget. A household budget shines a light on where money is coming and going -- and who is spending it. "When setting goals of any kind -- including financial ones -- you'll have to show a little give-and-take with your partner," says Patrick Summar, Los Angeles-based executive and life coach. This doesn't necessarily mean that you have to live with an absolute 50-50 spending split, notes Summar: "Talking about how, when and why you're going to spend is half the battle. For example, you might want to have an agreement not to spend more than $500 without consulting the other. But there is no one right way." Agree to a budget with your spouse, and stick to it.
Consider Individual Accounts
If you keep all of your assets in a joint account, you're like the majority of married couples. A joint account can establish a spirit of cooperation when it comes to focusing on your financial goals: you're in this together as a team effort. However, in some circumstances keeping separate accounts can help you achieve your own personal financial goals. For example, if you want to set aside money for a distant relative's college expenses, but your spouse is not especially interested in that goal, you can use the money in your personal account to save for that purpose. Likewise, if your spouse wants to save up for a giant new television that you neither need nor want, he may feel more free to do so if he has his own account to draw upon -- and you might mind less. "Having at least some money in single-name accounts broadens your ability to reach financial goals and can also reduce stress in a marriage," notes Summar. In other words, spouses have some freedom to do as they wish without asking permission.
Think Big and Small Picture
When you're single, it can be hard to set financial goals for the long run. Since you're only responsible for yourself, the only real long-term goal is to save for retirement. When you get married, however, you suddenly have additional considerations. You might start thinking about putting money down on a house. You may consider buying life insurance or saving money for future educational needs, especially if you have children. In the meantime, you'll still want to enjoy your life and meet short-term financial goals as well, such as buying a new car or upgrading your furnishings.
Have a Backstop
Regardless of your financial goals, investment philosophy, or saving strategy, financial experts unanimously recommend setting up an emergency fund. Even in the most stable financial situations, a sudden illness, an accident or an unexpected job loss can occur. Once you're married, any unfortunate events can be doubly damaging, so you'll want to be prepared with some cash reserves. For some couples, three to six months' worth of living expenses make for an adequate emergency fund; for others, a full year's worth of savings may feel more comfortable.