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How to Plan a Financial Future for Two

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We all love budgeting, right? No? How about budgeting as a couple? Yikes. I know, relationships can be complicated enough without adding the stress of personal finance into the mix. However, if you and your partner keep the lines of communication open and constant, then you may find that budgeting together can actually be fun! Think about it this way — it’s a chance to really talk about your dreams and your future together. When you look at it that way, there’s no reason not to do it!

Compare Your Goals

Ah, the fun part: start by creating a wishlist together. What kind of lifestyle do you want? What are you hoping to accomplish individually in the next year, five years, ten years? Now think about what you’d like to accomplish as a couple in the same time frames. One thing that may surprise you: your individual goals may actually be mutually beneficial.

How can individual goals be mutually beneficial? Let’s say you really want to have your kitchen redone. Although it’s your wish, both of you will get to enjoy the new kitchen. Or maybe your partner wants to go back to graduate school and the higher degree will increase his or her earning potential. Again, that’s ultimately good for both of you.

This is just one way to practice thinking together as a couple. In order to make sure the rest of the steps are smooth sailing, keep these three principles in mind: always communicate openly, reserve all judgement, and stay synced.

Compare Your Spending/Saving Style

Are you a spender, a saver, or some combination of the two? Most people fall into one of these two categories — but there can be variations of them. Maybe you’re usually great at budgeting yet you can’t help but splurge at the grocery store. At the same time, your partner may be a spender most of the time but has no problem being frugal when it comes to food. Or, let’s say you’re a saver who prefers to put the savings in investments, but your partner fears the stock market and so prefers the majority of your savings to be in a savings account.

Whatever the case may be, determine what your spending and savings styles are (including how you use credit cards) and then talk about how you can use your styles to complement each other. If you come out looking like opposites, don’t freak out. It just means you two can balance each other out and meet in the middle — you may find it to be even better that way!

Come Up with a Plan

It’s tough to achieve any goals without a clear plan. First you should decide if you’re going to create joint checking/savings accounts, keep everything separate, or do both joint accounts and separate. Then talk about how you will budget your money to reach both your combined and individual goals. For example:

You could decide to open a joint account for combined goals like purchasing a home and creating long term savings. Maybe each of you puts 80% of your income into those joint accounts, keeping the remaining 20% in your individual accounts for your own wishlist and daily spending. Now let’s revisit the mutually beneficial goals: if you determine that one or both of you has goals that could improve both of your lives, think about allocating a percentage of your combined income to save for them.

When coming up with a plan, keep one thing in mind: you will quickly become overwhelmed if you only shoot for the big goals without first laying out small steps to take each month. For example, if you want to have $6,000 in an emergency fund by the end of the year, that number could be so scary that you become paralyzed into inaction. However, if you think about it in terms of what you need to save each month to achieve that — $500 per month (or $250 each per month) then that may feel a lot more attainable. (And take small steps like lowering your credit card interest rate, which will save you money.)

Check in Together

Once you two have a plan set, it won’t do you much good if you don’t check in regularly. Set a date once a month to go over your goals, your setbacks, and your achievements. This is a simple step that’s easy to forget about and — even worse — can be uncomfortable to do. No one’s perfect so recognize now that you both will make mistakes — whether it be breaking the budget for an unplanned item or dipping into savings for an emergency.

To keep this step pain-free, talk to your partner and agree to reserve all judgement on the check-ins. Forgive quickly and determine what needs to be done to prevent future mistakes. Don’t keep secrets from each other just because you feel bad — this will cause cracks to develop in your plan, your communication, and maybe even your relationship.

Celebrate Together

Finally, the really fun part — celebrate your achievements together! Do this even if one of you did more to achieve the goal than the other or the goal is more important to one of you than the other. Remember that you are a team and you chose and reached your goals as a team. This is a great reminder of what you can accomplish as a couple and a chance to plan for even bigger and better goals in the future. So don’t just let those milestones go by without their due celebration!

Managing finances as a couple may seem scary, but if done right it is an opportunity to build a life together as a true partnership. It can’t be said enough — to ensure that this helps your relationship and doesn’t hurt it, you need to communicate openly, reserve all judgement, and stay synced. Now go get started and have fun with it!

Image: linh.ngan, via Flickr

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