You probably already spend quite a bit of time talking with your partner about your future together and what you both want out of life. Should you live downtown or move to the suburbs? Two kids or 3.5? Artificial pre-lit tree or a live one with string lights?
It may not seem like it in the moment, but these conversations are actually financial conversations. Just about every lifestyle decision you will make has a direct impact on your finances, which means that in order to make those dreams a reality, you’re going to create realistic financial goals that you can both agree on.
Getting on the same financial page as your partner isn’t always easy. And that’s particularly true when it comes to longer term life goals that can take years of joint effort to accomplish. So how do you set realistic financial goals? Here are some great tips to get you started.
Get In The Habit Of Having Regular #RealMoneyTalk
Figuring out what your financial goals are as a couple is not a one-and-done kind of conversation. It’s better to have regular check-ins with each other where you talk about the progress you have made towards your goals and make sure you are still on track.
These conversations are also the perfect time to talk about what’s not working in your current plan. It’s possible that financial plan that may have seemed perfect on paper feels way too restrictive when you try to implement it in your daily lives. Rather than let this frustration fester and potentially cause problems later on, you can address the issue together sooner and make any necessary changes.
Think of these talks as on an opportunity to get to know each other better as individuals. As time passes, your vision of your ideal lives can change. Having regular conversations about what you actually want out of life can help you and your partner course correct early, making it more likely that you can actually achieve the financial goals that you are aiming for and that they are actually something you both still want.
Take Time To Calculate The Actual Costs Associated With Your Goals
Planning for your financial future can sometimes feel pretty vague, which makes it much harder to create realistic goals. It can be really easy to over or underestimate what it will actually take for you to reach your financial goals. Or worse, it can make your goals feel unattainable (like amassing enough money for retirement) even when it’s not.
One easy way to avoid this goal-killing pitfall is to take some time to write down your goals and do some research to figure out what they will actually cost. Having hard numbers to work with makes it much easier to see how you can make room for those goals in your life.
Once you know how much money you need to hit your goals, you can plug the numbers into your budget to see what impact those goals will have on your lifestyle.
If you find that adding a certain goal tightens your budget too much, you might choose to adjust your timeframe for accomplishing that goal to minimize the impact it has on your finances. For example, you might decide to take an extra six months to save up for the downpayment on a house if it means that you will be able to continue traveling a few times a year. Putting actual numbers to your goals makes it easier to prioritize between competing financial goals.
The only way to know whether your financial goals are realistic is to take the time to put together the actual numbers. That way you have as much information as possible about your financial situation to help you make the best decision.
Creat Financial Goals That Reflect Your Vision For Your Life
As tempting as it may be to rely on a one-size-fits on financial plan, the reality is that every financial situation is different. Trying to follow a financial plan that doesn’t actually mesh with your vision for your life can be unbearably constricting–the financial equivalent of going on a crash diet.
A better option is to create a sustainable plan that gives you the flexibility to make room for the things that matter most and to deprioritize things that matter less. Setting realistic goals is a matter of finding the right balance between your competing financial goals.
While there are general rules of thumb that make good financial sense (like having an emergency fund and getting started on retirement savings sooner), creating a customized plan will make it that much easier for you to actually follow through on your financial goals.
Leave Space For The Things That You Value As Individuals
As important as it is to have joint couple goals, it’s also important to recognize that you will both have individual goals that are matter to each of you. Taking the time to learn about and support each other’s individual goals will help prevent potential friction in the future. Plus it shows that you value each other’s needs, which can go a long way towards building trust in your partner over the long term.
Leaving space for your individual wants in your financial plan gives you room to grow as individuals even as you are creating a joint life together. You can each be reassured that the things the things that are important to you are being heard and incorporated into your joint financial plan, which makes it a lot easier to compromise to help reach your joint financial goals.
Be Flexible And Keep The Lines Of Communication Open
Above all, remember that your financial goals are not set in stone. Priorities and goals can change over time. Just like ordering new dish off of a menu, you often won’t know for sure whether you’ll like something until after you’ve actually experience it. And life can be pretty unpredictable despite the best-laid plans.
Be prepared to tweak your financial goals as you go along, letting go of the ones that no longer mesh with your life goals and making room for the new ones that come along.