How Couples Can Create a Plan for Shared Financial Goals

 

shared-planWhether you’re married or in a long-term relationship, managing your finances together can be a daunting task. Maybe you’re just starting out and trying to find a system that works for you to split shared expenses. Maybe you’ve fully merged your finances with joint bank accounts and joint credit cards but can’t escape the day-to-day budgeting long enough to get on the same page about your longer-term financial goals. Regardless of your situation, it can be helpful to sit down with your partner to talk about your shared goals, individual goals, and a plan for how you can get there together.

Some tips before you get started

Share the load

It’s common to find in relationships that one person is more financially motivated than the other. In that case, it might be easy to relegate management of financial duties to the person who feels more strongly about its importance in the relationship. While it doesn’t hurt to play to each other’s strengths, each partner should be an active participant. Managing household finances and acting as the CFO of the relationship comes with its own mental load. Sharing in these responsibilities can ensure that you’re both in-the-know about where you are, as well as what you’re working towards. Active participation will also show your partner that you acknowledge and share their desires for your future together.

Tried-and-true may not always work

Keep in mind that what works for others may not work as well for you and your relationship. Talk to your friends and loved ones about how they manage their shared finances with their partners. Listen to their tips, but don’t be discouraged if the same methods don’t pan out for you.

Plans can also change over time as your financial situations and priorities shift. What’s important is that you and your partner can agree on a system and remain flexible when it comes to adapting it to changing circumstances.

Put yourself in your partner’s wallet

You and your partner may have very different attitudes and approaches when it comes to money. It’s important to enter these planning discussions with an open mind. Much of that difference in opinion may have been shaped by your upbringing, influenced by how your parents spent and saved money. While you may not be able to understand how or why your partner views money in the way that they do, you might better understand their motivation once you’ve heard their side of the story. Keep judgments to a minimum.

Don’t forget about your individual goals

When talking about your shared priorities, don’t forget to also talk about what is important to you individually. It’s important to compromise, but it’s also important to acknowledge that you each have your own goals, needs, and desires.

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How to put together a plan

Visualize your goals

  • What are your short-term goals?
  • What are your medium-term goals?
  • What are your long-term goals?

 

Having specific goals for the future can make it easier to stick to a budget each month rather than just trying to curb your spending and save without a goal in mind. Set clear financial goals and timelines with your partner. Discuss when you’d like to buy a home, start a family, or retire.

Agree on a strategy

  • Which of these goals have the highest priority?
  • What do you need to make these goals happen?
  • How can you work your goals into your budget?

 

Talk about which of these goals are most important to you so that you can prioritize if you don’t have room in your budget to save for all of them right now.

Then, determine what your monthly household budget is for living expenses, including (but not limited to) rent, utilities, groceries, car payments, other debt payments, etc. Subtract this monthly household budget from your monthly income and determine how much you have left over to save for your goals.

As previously mentioned, don’t forget to address your individual needs as well. If you and your partner have fully merged finances (you pool your money in joint bank accounts), consider setting up an allowance for each person to spend without being accountable to the other person. Make sure that you each have money to spend on things that are most important to you, outside of your shared goals.

Come to an agreement on how much you’ll each set aside each month for your shared goals. How you split the total amount is up to you. Depending on your preferences, an even split down the middle might work best or perhaps a proportional split so that whoever has the higher income will contribute a little more to the shared goal. Talk to your partner about which method feels right for your situation.

Check in with each other often

  • How did we do this week/month?
  • What kind of expenses do we have coming up?
  • Have our goals or priorities changed?
  • How are we feeling?

 

Set up a regular meeting to track your progress towards your shared goals together. This may sound very formal and cheesy, but it’s a good way to stay on the same page, keep each other motivated, and revisit your plan to tweak it if something’s not working well. Expenses, income, and other factors may change over time, so this is also a good time to discuss making adjustments your budget and savings plan as necessary. As you get better at following your set plan and keeping each other updated, you might not need to meet as often.

Don’t approach this weekly check-in as a report card or a chance to bring up slip-ups along the way. If you fall behind or one partner makes a mistake, talk about how you can come up with a solution

Just because it’s a serious conversation doesn’t mean that it has to be taken too seriously. Feel free to pair this conversation with an affordable date night idea.

Be prepared for a setback

Having a plan is great, but even then, you might fall off track. Whether it’s due to lack of motivation or an unforeseen circumstance, don’t be discouraged. Give yourself a break and find a way to catch up or be comfortable with pushing your goal target dates back a bit.

Building some cushion into your goals with an Emergency Fund is always a good idea. Not only will it give you some peace of mind, but when unexpected expenses do occur, you’ll be able to stay on track with your goals.

Managing finances solo is tough. It may feel even harder to do so with a partner, but Twine makes it easy for couples to collaborate. With Twine, you can save towards your shared goals with your partner (and even contribute different amounts). Twine also keeps your individual goals private, allowing you the flexibility of having all of your goals in one place. Read more about how Twine helps couples collaborate on financial goals.

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