If you want your relationship to be the best it can be, you’ll want to get on the same page with your partner about money. One of the best ways to do that is by setting some financial goals as a couple.
It’s hard to overstate the beneficial effects setting financial goals will have on your relationship. Not only will you have some reassurance that both of you want the same things financially, but you’ll also get to know more about each other in the process.
Talk About What you Want
When setting financial goals with your partner, your first step should be to talk about your individual financial goals. This might seem a bit uncomfortable, and honestly, it probably will be.
Most Americans have been taught not to discuss our finances with anyone else, and as a result opening up even to the people closest to us about money can be awkward. In addition, there’s always a risk in telling someone your dreams. They might not take you seriously, or they might try to explain to you why your dreams aren’t worthwhile.
Despite that, you should still be open with your partner when talking about your financial goals. Trust that your partner respects you and cares not only about you, but what you want. One good way to start this conversation is to talk about what you want in life, and from there you can segue into talking about your financial goals.
Set Your Priorities
Once you and your partner start talking about your financial goals, you’ll probably have a decent list of goals you and your partner agree on. Now it’s time for the next step—prioritizing those goals.
For instance, if you and your partner both agree that you’d like to have one house, a lakeside cottage and two cars, you might want to prioritize getting a house first if you already have one or two cars that are still running well, and delay saving for the lakeside cottage until after you’ve bought the house and two cars.
While you’re prioritizing your couples goals, though, you shouldn’t neglect your personal goals. If you’ve had your heart set on seeing the Great Wall of China at least once or you want to get a Master’s Degree to improve your career prospects, you need to let your partner know.
In many cases, you’ll be able to work towards multiple financial goals at the same time, although you and your partner should periodically discuss which goals are currently the most important. If you’re working on a Master’s Degree, for instance, you and your partner might decide to prioritize your degree and start saving for a house after you’ve received your degree and gotten a better paying job.
While there’s no hard and fast rule as to how to prioritize your goals, there are a few guidelines that can make the process easier.
The first guideline is to make your goals SMART—Specific, Measurable, Attainable, Realistic and Time-Bound. If you want to buy a new car, for instance, figure out how what kind of car you’d like to buy (Specific), how much money you’ll need for a down payment (Measurable), how you’ll be able to save up that money (Attainable), whether or not you’re able to put aside any money for a new car right now (Realistic) and how long it will take you to save up that money (Time-Bound). First Alliance Credit Union has a SMART goals worksheet that can make this process much easier.
After you’ve looked at your SMART goals, you can start to sort them out by how long they might take to achieve. Short-term goals are goals you can expect to achieve in the next five years, while medium-term goals might take longer to achieve, about 10 years. Any goals that will take longer than 10 years to achieve are long-term goals.
Once you have your goals sorted into these categories, you can prioritize your goals in each category and use the different time frames to start planning when you want to achieve those goals. Buying a house might be your most important goals, but you should be able to also save up for a trip to Paris without derailing your house goal.
No matter what the goals are, you should think about how to make sure both sides are comfortable moving forward. At the end of this discussion you will not only have a better idea of how to allocate your finances, you'll also have a better idea of who your partner is.
Head Toward Financial Success Together With First Alliance Credit Union
Setting financial goals as a couple can be awkward at first, but the results are worth it. Not only will you be able to achieve your goals, but you’ll also get to know your partner better in the process.
You can also get help achieving your financial goals when you become a member of First Alliance Credit Union today. In addition to the SMART goals worksheet you can find in First Alliance Credit Union’s resource center, you can also use a traditional savings account or a money market account to save for your financial goals.