Joint Financial Goals

7742378_sJoint Financial Goals

Does your vision of a financial future match your spouse’s? Do you dream of an apartment in Paris while his or her paradise is an RV and endless open roads?

Setting goals–and achieving them together–is a wonderful way to bring your marriage to new heights. Why do you need to set joint financial goals? Most couples find that though the process of setting financial goals can be challenging, it brings them closer and reduces tension over money.

Do your visions of a financial future match your spouse’s? Do you both plan to retire early to a cabin in the woods, or does he or she dreams of a sailboat while you have your sights set on a condo near the beach? Sharing goals and dreams is a necessary first step towards figuring out exactly what it is you want.

Below you will find a few worksheets and methods to help facilitate your discussions with your spouse.

  • In our Financial Health section, you can review some helpful tips to follow while setting specific and action-oriented goals.
  • You can also use our two-step Goals Formulation Worksheet (also introduced in the Financial Health section) that helps you project your goals for the next 3 years and come up with the top 5 from that list for the coming year.
  • Don’t forget careful planning for retirement. A solid financial foundation is the basis for your other dreams. Check out our Retirement Planning section for help.

While setting goals, you may find it helpful to set separate goals across different time horizons, either as a means to spur discussion or to clarify exactly what you’re shooting for and when.

  • Discuss the short-term goals that you’d like to achieve in the next 12 months, like reducing credit card debt and saving for a summer vacation.
  • Compare the medium-term goals that you’d like to achieve in the next 5 years, like paying off student loans and starting your investment account.
  • Share the dreams and long-term goals that you’d like to achieve in the next 5 to 20 years, like buying a larger house, taking a year-long sabbatical, or retiring early.

You may not have the time or inclination for worksheets, but setting specific goals, writing them down, creating a plan to achieve them, and having ways to measure progress is the best way to ensure you reach them.

When discovering and clarifying goals with your spouse, the most important thing to figure out is where your goals don’t match up, and then to clarify and resolve any significant differences. Couples who don’t divide their energies between different agendas not only to be more harmonious but also to reach or exceed their goals more quickly.

Achieving Your Goals

To achieve your financial goals, you need a sound plan. To create this plan, you can follow these steps:

  1. Determine your actual cash flow. Knowing your cash flow is the foundation for step two–making a budget. By learning where you and your spouse spend your money, you can quickly identify ways to reduce your spending in order to save more for your long-term goals.
  2. Make a realistic budget. To learn more about how the Expenses & Cash Flow Tool can be used to make a realistic budget, read through’s Where You Stand.
Categorizing Expenses

Making a good budget depends on being able to accurately track, plan for, and measure your expenses. By considering different ways of categorizing your budget, you should be able to create the most accurate picture of your current spending.

Spending Items

Expenses can be grouped by categories of expenditure, such as home, food, transportation, etc. as they are in’s Expenses & Cash Flow Tool.

Time Based

Another way to group expenses is by how often you have them. Thinking about your expenses over different lengths of time will often help you remember expenses that many people don’t plan for, such as yearly birthday gifts:

  • Monthly expenses include your mortgage or rent payments, utility and phone bills.
  • Quarterly expenses can include your estimated tax payments and insurance payments.
  • Annual expenses may be yearly birthday expenses or vacations.
Expense Type

Another powerful way to categorize expenses is by the type you incur, whether compulsory or discretionary.

Compulsory Expenses
  • Obligations are large, regularly occurring fixed commitments that are largely a function of your lifestyle. Examples are house payments, rent, property taxes, insurance, daycare or childcare, car payments, and professional dues.
  • Necessities are the consumable items that maintain your lifestyle. Examples are groceries, utilities, cell phone, medical expenses, home maintenance, pest control, TV/Internet, kids’ school lunches.
  • Pocket expenses are the small, incidental expenses that occur throughout the month: gas, snacks, newspapers, street parking, and fast food. For the most part they are necessary but too small to budget individually.
Discretionary Expenses
  • Family allowance is a budgeted amount for discretionary expenses such as entertainment, recreation, outings, photo finishing, and gifts. These expenses are incurred for the family–not individual members.
  • Personal allowance is like the family allowance but for each individual member. Like the allowance received as a kid, it is the amount that each family member can spend as they please, in a given time period–but no more.