One of the keys to marital bliss may come, in part, from finding financial harmony with your spouse. Ideally, you and your partner want to agree on some of the major financial and life goals, like how much to spend on a home and how to pay for your children’s education. You may be able to help accelerate the progress toward these goals when you and your partner work together as a team.
How can you and your spouse find common financial footing? Start by talking about these three important topics:
Consider discussing with your partner the type of life you’d like to share in one year, five years and 10 years. Do you want to travel internationally? Buy a second home? Upgrade your vehicle? Estimate how much each of these goals might cost, then divide by your timeline to calculate how much to save. For example, if you plan to buy a new car worth around $12,000 in 5 years and you’d like to stay debt-free, then you’ll need to save $200 per month for the next 60 months.
After you go through this exercise with every goal, you may find that you can’t save enough money to achieve everything. At this point, you and your spouse should discuss which goals take priority and which ones take a back seat. To help reach financial harmony as a couple, first collaborate on creating a common vision. What type of life would you like to share together? Then use money as a tool to help you reach those goals.
You may want to think about creating a list of the debts, including the mortgage, student loans, vehicle loans, credit cards and money that you’ve borrowed from family and friends. Write both the balance and the interest rate. Then discuss a strategic plan and timeline that could help you and your significant other reduce these debts. You both might decide, for example, that you want to contribute extra money toward the debt with the highest interest rate. Or you might agree to focus your extra payments on the loan with the smallest balance, so that you can wipe that debt off the books quickly.
No matter what approach you choose, you and your spouse should agree on three points: the timeline, the contribution amount, and — if you have separate or partially-merged finances — whether one or both of you are responsible for repayment. You might also consider discussing the criteria to use when making decisions about future debt. What new debts are you willing to take on, and under what circumstances? How will you make these decisions? What are the boundaries?
Finally, you may want to start talking about retirement goals, beginning with the question of “when.” When do each of you want to retire? Do you both want to plan to retire at the same time? Next, try to identify some specifics. What type of retirement lifestyle would you like? Do you anticipate any major expenses like traveling or buying a second home? Do you want to help support your children or grandchildren’s education or wedding costs? Do you plan to downsize or remodel your home? What might your health and long-term care expenses look like? By having this discussion, you and your spouse will create a shared vision for the future. Then you start estimating how much money you and your partner might need to save for retirement.
You and your partner can help strengthen your financial future by working together. And you might even discover that you enjoy your money meetings.