7 Steps to Jump Start Your Couple's Finances
One of the most popular New Year’s goals for couples is to get their financial house in order. Unfortunately, good intentions usually die quickly because most people don’t know where to start, let alone how to maintain solid financial habits throughout the year.
I wanted to publish some of Marlow and Chris Felton's material. They are a husband and wife team who help couples get on the same financial page and are authors of Couples Money, offer these seven tips for couples who are serious about their finances this year:
1. Break it down. Annual goals provide you with a set amount of time to achieve your end goal, but do it strategically. Break up your goals into manageable smaller goals with clear easy-to-achieve tasks. These attainable steps allow a more manageable view of what needs to be accomplished.
Think of this year’s financial goals like a diet. Most individuals approach it with an all-or-nothing attitude and end up burned. Smaller, incremental shifts are a more manageable and realistic way to take on new goals. Small efforts add up in the long run if approached with commitment and perseverance.
2. Adapt to different styles. It is likely you and your spouse differ in many ways. Learning methods and goal management are often where couples can find conflict if they don’t adapt. Understand that your partner may need to approach the same goal in a different manner. Keep communication open and fluid to stay on the same page. You never know what you might learn as a new method to achieve your goals together.
3. Take inventory. Note your monthly expenses through a frequent inventory. A little financial housekeeping will go a long way for you and your spouse with your new year financial goals. Write it all down. Every membership, meal and latte you purchase needs to be documented. It may sound extreme, but it gives you a clear picture of where you allocate your money.
If a month seems daunting, start with tracking your expenses for a week straight. Write down everything you spend daily. At the end of the week, determine which transactions are a must and which can go by the wayside.
4. Develop a spending strategy together. Your spending strategy is best developed after conducting a thorough financial inventory. You need to know where you spend your money in order to strategize for more achievable monetary goals moving forward. Communicate with your spouse thoroughly to understand which expenses each of you prioritize. Compromise may be in order to come to an amicable financial solution.
5. Track your net worth. This number is often overlooked and less often tracked. Wealthy individuals work off this number, and value its importance in accumulating wealth and setting financial goals. Your net worth is the truest indicator of where you are financially and where you are going. A simple equation to remember is: Net Worth = Assets – Liabilities.
Track your net worth number over time. Note the growth, and at which rate it is growing. Develop strategies to modify the growth to your ideal lifestyle and standard. If it is shrinking or flat, you need to seek a new strategy. Understand the changes you need to make in order to increase your net worth’s growth rate.
6. Develop clarity realistically. Clarity is one of the most important tools of goal-setting. If there is confusion present, goals become muddled. Develop a picture of where you would like to be at the end of the year. From there, set small monthly, and then weekly goals. Know what you want, and develop a clear path to achieve it.
7. Be open to possibilities. Be open to different ways you could increase your income. Most wealthy couples got that way from being entrepreneurial. Perhaps you’re not ready to open your own shop just yet, but there are smaller steps you can take to become more entrepreneurial, or in other words, find ways to make money. Even if you and your spouse hold down full time jobs, there are side businesses and other ways to earn more money. Start by matching your own talents, interests and abilities to solve problems for others. Even a little money here and there can go a long way in the bigger year-end financial picture.