By Ted Halpern
Learn more about Ted on NerdWallet’s Ask an Advisor
A money date may sound like the nerdiest, least romantic thing you could possibly do for Valentine’s Day. But money is involved in almost all of the choices we make in life, so even if it’s a little geeky, such a discussion can be a great way to achieve more of your goals with your partner, transforming money from a source of stress to a powerful tool.
Your financial life is like a business you manage with your spouse or significant other. You may take on debts to finance an opportunity, have goals you want to achieve, and complete daily responsibilities. Yet few couples review their financial statements as a business owner does.
If cash were sitting on the sidelines while a huge debt loomed over a company, or a CEO didn’t have a plan for future growth and investment, shareholders would not be happy. But you and your partner are both the shareholders and executives of your life together. You have complete freedom to set and achieve your goals.
A check-in to define those goals and regularly take stock of your progress is a valuable tool to make sure you are on track. Whether you call it a “money meeting” or a “money date,” here are a few helpful tips to help it run smoothly.
Agree on joint goals and write them down.
Give a set period of time (perhaps three or four minutes) for each of you to write down your goals. Don’t talk or allow any other interruptions. Then categorize your individual goals as follows:
- Short-term (under a year), such as vacations, medical expenses and gifts
- Medium-term (1 to 5 years), such as car purchases and paying off debts
- Long-term (5+ years), such as creating and preserving wealth together
When the time is up, compare and discuss your individual goals to create a shared goals list. Some may be very important to your partner, even if they are less of a priority to you. With the final list, develop a plan to achieve the goals. You should plan to reach short-term goals and most medium-term goals by saving. Goals with a long time horizon can be reached with an investment strategy.
Keep (some) emotions out of it.
This is not the time to place blame or stir up old arguments, but a certain amount of emotion can be motivating. What are you passionate about, and to what lengths will you go to make sure certain things happen? Use your passion and strive to improve in the future as opposed to focusing on the past.
Agree on a plan and individual responsibilities.
What are you going to do to make your goals happen? What is the highest priority, and how much money should be allocated to various goals? Set deadlines for yourself, and decide who is going to take certain actions.
And remember, a goal without a deadline is merely a wish.
Automate as many steps as possible.
Make the right decision easy and the wrong decision hard. For example, you can overcome the natural tendency to spend now rather than save for later by using automatic bill pay and automated savings online. If you have to move money from account to account to buy something that is not in your plan, that may be enough of a barrier to make you think twice.
Keep yourselves accountable by meeting periodically to review how your spending and saving match up to your written plan. If you aren’t quite on track yet, how can you make the process easier? The time period for your check-ins should line up with your goals; for example, you could meet to review short-term problems such as overspending monthly or quarterly and review your investment strategy and planning for big-ticket items once a year.
Key questions to ask in a money meeting:
- How does our spending compare with our plan?
- Can we find additional savings, such as shopping around for insurance or cable-Internet-phone packages?
- Are we saving enough to achieve our goals?
- Were there any unexpected setbacks since our last meeting, and how can we catch up?
- Which tools or professional advice will help us achieve our goals?
The bottom line
If you have a good process, you will find that being a good steward of your money becomes a habit, and you will meet your financial goals more easily. May your next money meeting help you get closer to the one you love and to meeting your shared goals together!
Ted Halpern is the president of Halpern Financial in Maryland and Virginia.
Image via iStock.