5 Tips To Help Couples Achieve Financial Success
For anyone in a relationship, money is a topic that you’ll need to cover with your partner in depth, and frequently, to create a solid foundation for the future. The thing is, dealing with finances solo is hard enough, and sharing your financial situation with another person? For many of us, that’s just scary as hell. According to a survey by Sun Trust, couples say finances are the number one cause of stress in their relationships. Financial arguments are also the top predictor of divorce, according to a study by the Huffington post. So how do you get in financial shape AND get your partner on board?
Achieving financial success with your partner might seem overwhelming at first. But, with patience, a plan, and commitment, your fiscal future can be promising. And the cherry on top? A recent Money Magazine survey revealed that couples who trust their partner with finances felt more secure, argued less, and had more fulfilling sex lives. Well then, let’s get to it!
Here are five tips on how to work with your partner to avoid potential financial landmines, and set yourselves up for success:
1. Be transparent about your financial situation
If you’re in a serious, committed relationship that you want to work, it’s important to share everything (yes, everything) about your personal finances with your partner. This can be scary because many of us have made mistakes or poor decisions when it comes to finances, but transparency is the first step to understanding the reality of your situation as a unit. This exercise will take patience and understanding from both of you, and will become an important building block for a foundation of trust. Remember, it’s important not to hold back any information, as you’ll need a clear picture of where you are before you can get started with your goals and eventually, progress.
2. Commit to specific savings goals
Establish short-term, mid-term, and long term financial goals. This could include an emergency fund savings, paying off credit cards, a new house fund, and/or retirement. A goal setting exercise is a great opportunity to learn more about each other’s vision for the future. And after what may have been a tough conversation about where you are, it’ll be fun to pivot and talk about the possibilities of the future.
3. Agree on a sustainable monthly budget
Create a weekly or monthly budget that includes a specific amount of money that is automatically saved each paycheck, and also allows each of you to have spending “freedom.” Once you’ve figured out your savings goal and your overhead, you’ll land on what that “freedom” number is. This tactic will dramatically increase your savings, help you reach the goals you’ve set, while also allowing for some fun. A budget will also help keep you both accountable, and undoubtedly force the financial conversations to occur more regularly – which leads me to tip #4.
4. Set a weekly money appt with your partner
This is a best practice that my wife and I practice religiously. At least once per week, we sit down to review our weekly budget, spending and savings progress. At this time, we also talk about any adjustments that need to be made based on how we did with our budget. For example, we generally try to have our meetings on Fridays because this day works well for us, and it also gives us a good check before we head into the weekend. If we review our budget and it looks like we are close to our weekly allocations and “freedom” number, we will go into the weekend more mindful about how we spend our money.
5. Hold each other accountable
To achieve your financial goals you need to support each other. You’re a team! You need to help each other be fiscally responsible. Sometimes you may need to course correct your partner when they veer from the financial plan. In my experience it’s perfectly normal to occasionally drift from the plan, no one is perfect. If you can recognize abnormal spending behavior or see that you are getting off track, just review your plan together, and reset.