How To Set Financial Goals Together

According to a 2017 LendEDU survey, 32.25% of people shared that honesty about money is more important than honesty about fidelity in a relationship. That may be surprising, but real talk about financial health and what you each want to achieve on the money front is crucial to keeping the relationship strong.

Secret bank accounts, hidden spending, and poor planning will create long term relationship hurdles. Whether you've been in a relationship for countless years or you're new to your relationship status, there are certain things you and your partner should take the time to discuss. According to the same survey, couples who put it all on the table when it comes to their finances and their goals are less likely to fight about money in the future.

Here's are a few ways to get your financial relationship on the right track.

How to Set Financial Goals Together

Being on the same path toward financial well-being starts with an honest conversation about where you and your partner are currently with your finances. It would help if you took the time to gather details about your financial picture now, including debts, savings, retirement plans, and personal goals. Having this information will help you both know where you stand and where you're going, both together and as individuals.


Once you have your details, discuss how you will prioritize your objectives for the future. The needs and wants of couples vary from one to the next, but there are a few general rules of thumb to help you create a plan of action and reach your goals effectively.


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Prioritize What is Important in Your Relationship

The foundation of financial health starts with an understanding of what it takes to feel confident in your financial life. That often includes having an emergency fund set aside for a rainy day, paying off debt, and then saving for the goals you and your partner want to achieve together.

Saving for an Emergency Fund

According to a 2017 survey by CareerBuilder, 78 percent of American workers are living paycheck to paycheck. And a similar study by GoBankingRates found that 61 percent of Americans do not have an adequate emergency fund.

If you or your partner do not have an emergency fund set up, this may be where you want to begin toward building a financial life together. An emergency fund is meant to provide a cushion should an unexpected bill or loss of income take place in the future. If you don't have this savings cushion ready to go when a financial disaster strikes, you're likely to run to debt to cover it. This can be an expensive endeavor, and could contribute to additional unnecessary stress in a relationship.

An emergency fund should have somewhere between three and six months of expenses set aside, typically in an easy-to-access and liquid FDIC backed savings account. Work with your partner to understand your expenses individually and as a couple, and aim for hitting one month, then two, then three in savings.

Paying off Debt

Debt is also a high priority item for many couples as they work on their financial well-being together. For many Millennial couples, student loan debt is a significant burden that can delay moving forward toward other financial goals, like buying a home or planning for a family. On average, individuals leave campus with student loan debt nearing $30,000, and that equates to monthly payments totaling hundreds of dollars each month. And for many Americans, credit card debt may also be an issue that needs to be addressed. With high interest rates and an average revolving balance of over $8,000, credit card debt can add up to a serious expense over time.

Talk with your partner about the debts you both have, including interest rates, monthly payments, and total balances. These details may not feel comfortable to discuss, but it is crucial to be open and honest about them so you can come up with a plan together. In your plan you can prioritize paying off debt with the highest interest rate, and consider refinancing (ex. student loans) to lower interest rates when possible. Most debt can be refinanced including student loans, credit cards, auto loans, mortgages, and more. Paying more than the minimum might be difficult, but over the long term interest savings can be allocated to long term financial goals.

Saving for Big Financial Goals

The most exciting part of planning for the future with your partner comes when you start discussing big-picture financial goals. Buying a home, planning a wedding, or preparing financially for a child all require some discussion as to how much you want to spend or save for that particular goal, and how you will accomplish the task. Start by understanding the cost of whatever it is you're planning to do in the future.

For instance, the median purchase price of a home in the U.S. is just over $226,000, with far higher home prices in metropolitan areas. That purchase would require a down payment, typically no less than 3.5%, as well as closing costs that can range from one to several thousand dollars. Understanding these costs can help you develop a plan for your big purchase with your partner, including how much you can realistically save each month or each year toward that big-ticket item. Next, set up a savings account with an auto-savings feature. You can set up the account to automatically save a percentage of your paycheck for this financial goal.

Setting financial goals in a relationship is an important part of being financially healthy, and it can improve the connection you and your partner have over time. Be prepared to talk openly about where you stand now with your finances, and expect the same from your loved one. Once you have an idea of where you are and what you want to achieve, come up with a plan to make your financial goals a reality.

Oh yea, and you should probably avoid secret bank accounts too.