Couples and money: Agreeing on financial priorities

This article is Part 3 of a series on couples and money. Part 1 is How to Talk about Finances Without Fighting. Part 2 is What is Your Personal Money Motivator?

One of the easiest ways for couples — or even business partners — to find themselves fighting about finances is when they don’t share the same priorities regarding how, when, and where to spend money.

Basically, you don’t realize that your goals for your money don’t match.

A productive way to identify these differences and open important communication surrounding these issues is by using a goals and values worksheet.

Examining your financial priorities

Some common personal goals are listed below. These life goals have been separated into categories for a more practical review.

Go through the list separately and indicate each item’s importance to you as low importance, medium importance, or high importance. Ask your partner or spouse do the same.

Lifestyle priorities:

  • Maintain or improve present standard of living (define what that looks like for you);
  • Start or increase emergency fund (how much would make you feel comfortable?);
  • Increase investments (do you agree on the type of investments to pursue?);
  • Pay off credit cards;
  • Pay off mortgage;
  • Pay off other debts;
  • Save for health expenses, dental, orthodontics, glasses; and
  • Move to a different state/country.

Learning priorities:

  • Private school for children;
  • College education for children (do you pay for all, part, or none?); and
  • Pursue own college education/advanced degree.

Labor priorities:

  • Start a business;
  • Change careers;
  • Work more or less; and
  • Have one partner be a stay-at-home parent (which one?).

Family priorities:

  • Have children/more children;
  • Support parents or in-laws;
  • Support adult children; and
  • Visit distant family/friends more often.

Social priorities:

  • Enjoy entertainment activities/eating out;
  • Join a gym or class;
  • Pursue personal hobbies; and
  • Travel.

Luxury priorities:

  • Purchase a cabin or recreational vehicle;
  • Buy a new car;
  • Get a new computer, furniture, etc.;
  • Remodel or update;
  • Buy a newer/larger/nicer home; and
  • International travel.

Retirement priorities:

  • Contribute (or contribute more) to retirement account(s);
  • Retire younger than age 65;
  • Retire at age 65;
  • Retire at 70+; and
  • Change to a smaller or different home / downsize.

Legacy priorities:

  • Contribute to a charitable or political cause;
  • Support surviving spouse and family; and
  • Pass wealth to heirs.

After you’re done, compare lists and use them as a starting place for the essential conversation about your priorities. Look for and focus on areas you have in common before tackling the harder discussion about your differences.

However, making these conversations more intentional may remove the constant disagreements about these trigger areas for years to come. As always, if any disagreement becomes entrenched, don’t be afraid to bring in the experts: accountant, financial planner, certified financial counselor/coach, or relationship counselor.

Discretionary funds

For most couples, the argument comes from shared funds or completely separate funds. Instead, consider establishing a discretionary fund for each person. In this scenario, most of the resources go into the combined budget for family finances. However, each person has a monthly budget of their own to make personal decisions about. Some possible ways that people use their discretionary funds:

  • Saving more to provide peace of mind and security;
  • Investment “play” as a way to give one partner the opportunity to choose more risk;
  • “Fun money” to save for travel more important to one or the other;
  • Shopping for non-essentials (upgrade your wardrobe, stereo system, massages, manicures, etc.);
  • Hobbies; and
  • Charity or “pay it forward” possibilities.

These discretionary funds enable each partner to make some financial decisions — within a budget — that don’t require agreement or approval. It provides an opportunity for freedom without creating larger problems in the overall budget.

Getting on the same page

While no two people will agree 100% of the time on every budget item, there is great benefit to getting on the same page and understanding each other’s major priorities. When you identify the areas where you agree and differ, it will be easier to find common ground and compromise on the things you know really matter.

Ellen Bernards is assistant vice president-mortgage loan officer at State Bank of Cross Plains (SBCP) serving Cross Plains. Bernards brings a wealth of experience to her role, having specialized in the housing industry since 2004 as both a mortgage lender and counselor, assisting and educating countless Wisconsinites along their personal journeys toward homeownership.

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