One of the best things Jordan and I have ever done is sit down and create goals together. While we’ve always talked about what we wanted in the future, setting financial goals as a couple helped us to create something concrete and put our money where our dreams are.
We’ve gone through the process of setting goals often: we created joint goals right after we got married, refreshed them again when we created a DIY retreat in the English countryside, and most recently, we answered three questions that helped us get very clear when setting financial goals (and life goals) as a team.
Setting joint goals helps us ensure that we are working towards a shared vision. It has helped decrease the questions and money conflicts that come up. Because we’re both working towards a shared idea, questions about how to handle day to day situations are often easy to solve.
Setting financial goals together should be something that happens as a part of your joint financial plan. But how exactly do you go about creating these shared goals? Let’s break it down.
Financial goal examples
What are financial goals? These are the big-picture dreams that you have for your life. They’re what help you determine how you should spend and save your money and give you a blueprint for creating a life you love.
Some financial goals include:
- Buying a house
- Sending your child to college
- Paying off debt
- Saving to travel
- Starting a business
- Working a less demanding schedule
- Saving for an emergency fund
But don’t worry, your goals don’t have to look traditional in order for them to be valid. Jordan and I decided last year that our financial goals were to have him leave his job, move 7,000 miles from London to Hawaii, and have a once in a lifetime adventure. We had unorthodox goals that we worked to set and achieve together.
How to set financial goals
It’s easier to create a strategy to help you set financial goals as a couple if you know how to set financial goals as an individual. Setting financial goals helps close the gap between where you currently are and where you want to be.
If you want to buy a house but you have mediocre credit and no savings, you’d create financial goals to take you from where to are today to walking through the threshold of your very first home.
The steps for setting financial goals include:
Determining what you want
Don’t breeze through this step. In fact, I would disproportionately allocate time here — if you know what you really, truly want, the process of getting there becomes that much easier. For example, when I had $120k in student loans saying, “I want to get out of debt” did pretty much nothing to help me with that goal. When I wanted to leave my career and work for myself, things changed. Suddenly, I wanted to get out of debt because I wanted the freedom to choose a different path. My debt was gone, quickly.
Take money out of the equation for a moment and think about what you really, truly want, and why. If you’re stuck or coming up with some goals that leave you feeling less than inspired, try this three-question exercise that Jordan and I did last year. As a result of those questions, we completely transformed our money and our life.
(You might also want to listen to our podcast episode: how we answered “what are we doing with our lives.”)
If you have too many goals and not enough money or time to achieve them right now, prioritize them. Some goals will stand out as being the most important thing that you can’t imagine not doing, while others may be less exciting.
Calculate the cost
Nearly everything you want will have a dollar value attached to it. Maybe you want a house or you want to travel. Or maybe you want to change careers, go part-time, or spend time writing a book. Those last ones may not seem like they have much of a financial implication, but they do.
Calculate how much money you need to earn or save to make those dreams come true. Don’t shy away from the numbers. You might be pleasantly surprised to find out that what you want isn’t as expensive as you think.
(See: podcast with spending plan template)
Create a plan
To close the gap between where you are and where you want to be, you need to put a plan in place. Unfortunately, a Charles Schwab study tells us that while most millennials have lofty financial goals, few have a plan in place. With money, you have two primary options: to earn more or to spend less (or, more powerfully, a combination of the two).
What are you going to do to close that gap? Depending on your goal, it might just require a small change. For example, if you want to write a book but you need to hire a babysitter 10 hours per week to make that happen, you might look at your budget and see what you can trim. Maybe you stop eating out or you deactivate your Amazon account (no more impulse buys).
For bigger changes, you might want to get creative. Maybe your goal is to leave your job and travel the world for a year. Your plan might include starting a side business to save up extra money and be able to earn an income while you’re on the road.
As Paula Pant says, you can afford anything but not everything. So, what’s it going to be?
How do you set goals with your spouse or partner?
How does this goal-setting approach differ when you have another person to consider?
It comes down to creating shared goals. Each person should take some time to think about what they want, before sharing their goals with each other. Don’t rush this process! Again, if you’re stuck, I highly recommend starting with these three questions to help you figure out what you truly want to work towards in life.
Once each person has had time to go through their goals, sit down to share them. Listen to what the other person wants without judgment. Get inspired! And then create joint goals. You’ll likely have a mix of short term (one year or less), mid-term (1-5 years), and longer-term (over five years) goals.
The joint goals should inspire and excite you both and be something that you’re eager to work towards as a team.
Create systems that support your goals
Once you have your goals sorted — financial and otherwise — it’s a good idea to create a system to help you achieve it.
If you are relying on willpower alone to achieve your goals, it’s going to be so much more difficult. That’s why financial professionals recommend automation to help you save. When we’re left to our own devices and have to think about saving, we save less. If we have an automated system that saves for us, we’re likely to save more.
Think about what systems you can put in place to help you reach your goals. If you’re trying to save money for one of your goals, and your food spending is too high, consider creating a meal prep system. If you want to have more time to work on bringing in another stream of income, what type of system can you bring into your life to create more time?
(Listen to the podcast: Systems – our goal-setting secret)
Creating financial goals together is an iterative process: goals change as you change. That’s ok! What’s important is that you’re actually setting financial goals as a couple to create a joint vision that you’re excited by. Life is a whole lot more fun that way.
Erica Gellerman is a CPA, MBA, personal finance writer, and founder of The Worth Project: personal finance and family travel. website. Her work has been featured on Forbes, Money, Business Insider, The Everygirl, The Everymom, and Lifehacker. When she's not writing about personal finance you can find Erica exploring Europe from her temporary home base in London.
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