Financial planning as a couple
Planning is better together
- Start by dreaming together without any thought of limitations.
- Choose and work on goals you both love.
- Revisit your goals regularly to check your progress and make any necessary changes.
Successful financial planning as a couple can be both challenging and exciting, but not impossible. By following a few steps, you can make the journey an enjoyable and meaningful one.
Merging finances can be a big task. Before you jump into logical thinking and planning, take some time to consider your dream life. Be honest and open about what you want to accomplish. If you want to be a stay-at-home parent, open a home business, move across the world, or take lavish vacations every year, be open about it.
Skip being “realistic” for a moment and just dream without limitations. Write down everything you each mention on notecards, Post Its, or something similar, and place them all together in front of you.
Choose goals that you each love
Go through each one as a team and talk them out. Sometimes you will find that it is easy to make them work, and other times you will determine that another goal holds more value. Decide which ones you want to focus on for the next three to five years, then put the rest to the side.
You do not have to throw those dreams completely to the curb. Put them away so that you can pull them out for consideration during your next dream session. Do be sure that those you choose to focus on now is a mix of things you both want.
Map out your journey
Use your wall, a cork board, a table, or any other surface you choose to start hashing out your step-by-step plan. This is where you need to get logical. If your dream job requires a degree, then you obviously need to put the degree card or Post It before the job card. To buy a house, you need to save for a down payment and get your credit in good shape. Place your goal cards in a logical order.
Once you are through placing them in the desired order, start mapping out the smaller tasks you must accomplish to reach those goals. For instance, if one of the goals is a degree, you must first speak to schools and decide on one, apply, work out financial aid, decide how or if you will work during that time, and so on.
Get these tasks listed in order, then set dates for those tasks. One reason goals are never met is because they never make it past the planning phase. Take the time to turn it into an action plan, and put the tasks into a planner or calendar system you use. Dates can always be tweaked later if need be.
Set a savings and investing plan
Many say that it is not a question of if things will go wrong, but when. It is safe to assume that at some point, you will hit a rough patch. One party might get sick or injured, a company may downsize or shut down completely, or worse.
One of the smartest moves in couples’ financial planning is to start saving and investing immediately. There should be an emergency fund of at least three to six months of living expenses, just to start. The two of you should also set other savings goals for either a set amount of money or for specific things, like a home or vacation. Also, pick investments that meet the priorities of each of you.
As a team, you can work to reach these goals. Budget in your saving and investing goals, and contribute as often as possible. If either of you feels nervous putting a lot of money into joint accounts for your savings and investing, you can set your accounts up so that no moves can be made without both parties’ presence.
Even if you make a three- or five-year plan, it is always a good idea to revisit your goals regularly. By doing so every six months or so, you can check if any priorities have changed and rework your plan accordingly. This is also a good way to check if you are on track to meet your goals, or if any changes need to be made. Keeping an updated financial plan can be an incredible resource in building your dream life.
A deeper dive- Related reading from the 101:
- Fast and simple ways to manage your money | Living 101
Here are a few tips for smart money management.
- 5 ways to choose profitable investments | Finance 101
Read these tips for choosing where to invest.