The Step Process for Establishing a Couple’s Financial Strategy

Creating a shared financial strategy with one’s spouse is one of those parts of marriage that is seldom discussed. Improving as a married couple requires learning how to resolve conflicts amicably.

Marriage may be seen as a merger, a union, or a partnership, depending on who you ask. Communication is the single most significant aspect in determining your degree of happiness, regardless of the definition you choose to use. Decisions concerning your lifestyle, kids, sexuality, and, of course, money are all major topics that you and your partner will need to discuss openly and honestly. In fact, arguments over money are a major contributor to couples breaking up.

Budgetary Resolution

Money doesn’t have to be an argumentative subject. Whether you are “soon-to-be-married,” “recently-married,” or “have been in the trenches for some time,” having a financial agenda or budget is vital to good money management. Although budgets get a bad rap for being difficult and time-consuming, this is not always the case. A budget is just an estimate of the combined earnings of a couple for a certain time period, together with a plan for allocating those earnings. For budgeting as a couple it is important.

You need to start by writing out some approximate budget estimates. If you and your partner have made a budget, then it’s simply a matter of checking in on a regular basis to make sure it’s being followed. Using software that is either free or inexpensive is the best approach to track your ongoing financial success in a manner that is simple, accurate, and quick (you can learn more about this in Step 6). Here are the seven steps that must be taken.

Instead of merely being clever, goals should be clever.

Your financial goals should be broken down into three time frames: the immediate future, the mid-term, and the far off future. The overall budget you generate will be heavily influenced by your short-term, intermediate-term, and long-term monetary goals.

The time frame for a short-term goal is often between one and two years. Establishing an emergency fund sufficient to cover three to six months of costs, paying off credit card debt, and saving for a once-in-a-lifetime vacation are all examples of attainable short-term objectives.

Objectives such as saving for a down payment on a house, buying a new car with cash, and paying off college loans all come under the category of medium-term goals. It’s possible that this will take 10 years to finish.

Investing and saving money over the course of your whole working life, which may be forty years or more, is the single most important long-term goal someone can have.

You may have to postpone certain goals until you’ve reached a specific milestone, such as receiving a substantial raise in salary or a promotion.

Find Out How Much Money You Made

Once you know what you want to accomplish financially, you may assess your monthly income. The term “gross income” is used to describe one’s earnings before any deductions or taxes have been applied. That’s not helpful when you’re trying to figure out how much money you’ll need to create a budget, but it’s important to note any retirement, pension, or Social Security deductions you make. Use what’s left over after taxes and other deductions each month, often called “take-home pay,” to help you plan a spending strategy. This is the sum that enters your bank account before you make any withdrawals.

By Bart Lira