It’s exciting to fantasize about all the assets you want to accumulate as a couple after the wedding—buying a new house and upgrading your car, getting a pet, and having kids. These new life stages are fun to think about, but it’s important to remember that they come at a cost. Establishing good savings habits early on can help you and your spouse figure out when you can realistically cross these goals off your to-do list, and how you might have to adjust your spending habits to accomplish them.
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The most important thing to understand is that you’re working as a team, says financial advisor Noah Estrin; you’ll also want to remember that one person’s financial decisions affects the other’s. Here, Estrin gives his insights into how couples can work together to become solid savers:
Create a joint financial vision.
Before getting into the routine of saving, couples should establish a shared vision for how they want to handle their money, says Estrin. “Financial honestly between partners is really essential,” he says. “What kind of lifestyle do they want to live together?” A shared financial vision reflects a couple’s common financial values. For some, the goal is to live entirely debt free, achieving financial independence, and not worrying about money daily; for others, the goal is having a comfortable enough savings that they know they are able to take care of family if someone gets sick, create estate plans, and have a cushion for emergencies.
Set attainable financial goals.
“Couples should communicate early about what that [shared] vision means in real terms—maybe enough to travel twice a year—and set tangible savings goals along the way,” says Estrin. Not all your goals have to be long-term, such as saving for retirement or a child’s college education. After all, habits are more likely to stick if you see some progress being made toward reaching your goals.
That’s why it’s just as important to focus on short-term goals, such as a vacation or buying a new car—ones that you can attain more quickly. “Small rewards go a long way,” says Estrin. “(They) will drive us to do more of those good behaviors.”
Create a budget.
Get to know what each partner’s expenses are on a daily, monthly, and annual basis. This includes other financial priorities, such as paying down student debts. Once you know how much cash flow you have each month as a couple, then you can understand how to use it on a daily basis, and how much you can habitually put into your savings. It also gives you something tangible to reference and measure yourself on if you feel yourself veering from your good habits.
Share the responsibility.
Each partner needs to take financial responsibility, holding each other accountable for following up with the savings goals and understanding that one’s savings habits impact the couple’s shared goals. “Some responsibility should be delegated to both of them so they can really have a partnership in their finances,” says Estrin.
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Automate as much as possible.
Just like setting up automatic bill pay, set up an automatic savings plan that puts money into a savings account each month. Use your financial goals to help guide you to what savings plan, for example, a Roth IRA versus a cash savings account, is best to most efficiently accomplish that specific goal, whether it’s buying a second home or saving for retirement.
Some apps can be used to monitor your spending, but Estrin warns that they aren’t always accurate. He suggests checking bank statements every three months to ensure each partner is on track with the path to reaching your goals, and re-evaluating the financial plan after a life change, such as changing jobs or moving out of state.