How to Reach Your Financial Goals as a Couple
When you decide to get married, it’s more than just the blending of your families. It’s also the merging of your finances, which if not done properly, can lead to more than endless squabbles. Getting your finances in order as a married couple doesn’t need to cause strife. Here are five tips on reaching your financial goals as a couple.
Work as a Team
Marriage is all about teamwork, so when it comes to managing money, you need to find the right balance. Have an honest conversation about your individual financial goals and how you plan on making them happen. When you are combining funds as newlyweds understand that this is a process and will take time trial and error. You also need to talk about your current spending habits. If one of you is a super saver while the other tends to buy whatever they want, this might cause undue tension down the road.
Create a Budget
You also need to create a budget together. Both of you should write down the household expenses. These should include your monthly rent or mortgage, utilities, car payments, credit cards and if applicable, student loan amounts. You then need to factor in the cost of groceries and savings. Aside from the set amounts every month, look for ways to cut corners.
For example, you can clip coupons and shop for certain products in bulk to save money on groceries. Cooking at home is one of the easiest ways to save money, so you can also limit eating out to once or twice a month as opposed to once or twice a week. Just be sure that you both have enough mad money to enjoy the occasional coffee or lunch out during the week. The goal is to find ways to save money, not live without life’s simple pleasures.
Plan for the Future
Your joint financial strategy is just as important as your individual one. Before you talk about the future, you need to look at the present. If one or both of you have credit card debt or outstanding student loans, how are you going to get these paid off? The financial decisions you make now will impact your future financial goals.
Define Your Financial Goals
As a couple, it can be tough defining your financial goals. However, you are likely having discussions about getting your life in order in other ways, so including financial goal setting should not be difficult to work into the conversation. Even if you have different kinds of debt and spending habits, below are the three most common goals couples have:
Paying off Debt
It doesn’t matter whether it’s from credit cards or student loans, having outstanding debt can be stressful. As a couple, you need to tackle each debt to free up your money. You can either pay off the smallest debt first or tackle ones with the highest interest rates.
Live with Less
Living with less doesn’t mean going without. It means not putting yourselves into a financial hole you can’t get out of. To make this happen, you both need to become savvy shoppers. When shopping for clothes, look for pieces that can transition from one season to another. You should also avoid buying the least expensive option you can find. Clothes that only last one season will cost you more in the long run.
Create an Emergency Fund
Life is full of surprises, so you never know when you’re going to need extra cash. Having an emergency fund separate from your savings should be one of your goals. Together, decide on how much you can stash away each month into the account and have it automatically transferred when you get paid. Another way to improve financial security is with a life insurance settlement. Depending on the company, you can get a percentage of the total cash value. If you’re not sure how the process works, there are plenty of free guides online you can review together.
Common Financial Mistakes
We all make mistakes, so it’s easy to slip up with your finances. But when you’re married, it’s important to be as transparent as possible with what you’re spending. Be honest about your purchases and never hide it from your spouse. Even if you try to play it off as a joke, this behavior only leads to resentment and distrust.