In a recent survey by Fidelity, a whopping 44 percent of respondents said they argue with their spouse about money, with one in five citing money as their biggest relationship challenge. Generally, these couples—many of whom are millennials—disagree on fundamental financial moves, like the age they plan to retire, how much savings is needed to reach retirement, how much risk they are comfortable taking on in their investments, whether they are savers or spenders, and on their family’s next big savings goal.
Here’s the problem, though: For long-term success, both parties need to be committed to their financial well-being—both individually and collectively. So what can you do to get on the same page with your partner and create a budgeting plan that works equally well for both of you? Here’s what you can do to move forward, together:
The best way to establish common ground? Have an open, honest conversation with one another. We like to call it a “Money Date.” A Money Date is like any other date—a block of time you devote to one another. But in this case, instead of going out to dinner or a movie, you’re setting aside time to have a dialogue about your finances.
While you can certainly do this in any fashion, the most effective way is with The Money Dat Box for Couples, since it takes all the guesswork out of the equation. The Money Date Box is a set of cards split into eight sessions. Each week, you set a “Money Date” to work through the contents of your box with your partner. Topics cover everything from budgeting and cash management to retirement and estate planning. And at the end of eight weeks, you’ll walk away with the foundations of a financial plan, which you can continue to build upon.
2. Find Out How Much You Really Need
Make a list of your collective household needs. Since you may not fully agree on what’s non-negotiable, it’s a great idea to write down all of your expenses. Then, go through the full list together, marking each line item as essential or non-essential. Total your essentials. This is how much you need to cover your everyday expenses after cutting out anything non-essential.
3. Identify Ways to Cut Expenses
As you go through your list of expenses, do a quick audit on some of the bigger numbers. Is there any wiggle room? Think about whether you might be able to save a bit by switching insurance providers, buying a less expensive car, or switching from a traditional gym to virtual classes.
4. Prioritize Saving
Money problems—and therefore conflict—are more common when you’re spending too much and not saving enough. In order to make sure this doesn’t happen to you, make sure you’re not spending beyond your means. This goes beyond setting a budget for yourselves—in order to prioritize saving, consider automatic payments. Open a separate savings account for specific savings goals, then set up direct deposit from your paycheck into that account—5 to 10 percent is a great goal, if you can manage it, but remember: every little bit helps.
5. Don’t Forget to Establish an Emergency Fund
Do you have at least three (but hopefully closer to six months) of liquid cash to carry you through job loss or any other unexpected expenses? If not, take a hard look at your budget. Are there areas you can button up in order to put more towards your emergency fund? When it comes to life, you have to expect the unexpected, and having enough liquid cash to cover you in the event of a large and unexpected expense or a pause in cash flow is essential.
6. Set Long-Term Goals
While it’s great to get a handle on your immediate circumstance, couples, in particular, should always be looking forward—especially if you plan to expand your family. With forward thinking, you’ll be better prepared for life’s biggest events, like saving enough money to buy a house or saving for a child’s education. Why? When you have specific goals you’re working toward each month—and know exactly how much you’re contributing to said goals every month—it’s easier to stick to your budget and to actually save for the things you’ll need money for later. If you’re walking blindly and constantly justifying overspending, you’re more likely to find ourselves struggling to play catchup later—and that can be a very stressful place to be.
7. Be Kind to One Another
Remember: Though you may be a couple, you are two individuals who have their own desires. It’s important to recognize this—and be ready to compromise if you don’t agree. Though your gut instinct may be to give your partner a hard time about their clothing rental subscription or their more expensive car lease, you both work hard to make your money and deserve some nice-to-haves.
If you’re struggling to find common ground, consider setting up individual allowances. This way, you’re both free to spend their allocated “fun funds” on whatever you each want
8. Consider Hiring a Professional
According to the Fidelity survey, though just 35 percent of couples say they work with a financial planner, those who do work with a financial advisor are more likely to agree on their vision of retirement, find it easier to start money conversations, and feel confident about their financial health. What’s more, millennials who work with a financial professional say it helps open up the lines of communication, since they find it easier to talk to their advisor about immediate financial needs, major life events, and broader planning needs/retirement versus their partner.
9. Resist the Urge to Go on Autopilot
Your financial plan isn’t set in stone—it should be fluid. Check in with each other—and the numbers—regularly to ensure you’re always making the smartest money moves for your family. At the very least, consider an annual review of your finances—or sooner, if there’s a major change in your life.