Financial Freedom Plan for Couples
It’s hard to map out something without some sort of destination.
Having a financial game plan is a big part of reaching your goals and it can help you two develop ways to communicate effectively.
Start with Your Why
You can start off by creating a list of goals you two wish to achieve in 1, 5, and 10 years.
You two really need to think about what you value as individuals and as a couple.
- Do you want to eventually own a house in the country or do you want a condo in the city?
- Do you want to not lay roots and travel?
- Do you like to have some gadgets or do you want to save to go have unique experiences?
- Do either one of you want to start a business?
- Do you guys want kids down the road?
Asking these questions can allow you to build something together instead of making it up as you go.
It can save you some headaches in the long run. You also learn about each of your money personalities.
Use this opportunity as a way to talk about the differences up front.
What Are Our Financial Goals?
- Have no debt except for our mortgage. Currently we don’t have credit card debt or car payments. The only debt left right now are my student loans, which have a low interest rate.
- Have a steady mobile income of $50,000/year or more. If we have no debts except a mortgage this would work well for us as we live a pretty simple life. This income can from freelance work (which is my main source of income now), working remotely, or passive income developed from products we create.
We’re going to explore options as they become available. Our time frame is 5 years, so we have some work to do.
Building a Financial Plan Together
- Share with each other a list of your debts and assets. You need to have a clear idea of what your starting point is to have a plan as a couple. Don’t lie about the amount of debt you have, if you’re on the same page you can both work down on paying down your debt.
- Create a budget or spending plan together. Your first couple of times doing a budget together will be wrong. All couples have to go through this as they are merging their money, bills, and goals. My personal tip is to add 15% to your budget for things like car repairs, rental insurance, etc. Both of you should have a say on where the money goes.
- Open a joint account together. Our main accounts are joint accounts and we both have access to the individual accounts in case of emergencies. I know some couple have separate accounts, but having some money pooled together encourages you two to talk. Consider having a joint savings account for some mutual goals, like a house down payment. I also recommend saving up for at least an annual vacation for the two of you. It doesn’t have to be grand or exotic, you just want to get away from it all and spend time together.
- Make paying off debt a priority. Look again at your spending plan and see how much money each month goes towards debt. If you can eliminate that, you can spend that money instead on your dreams and goals. Use either a debt snowflake, snowball, or even an avalanche to work your way to being debt free.
- Build an emergency fund. Start small and tuck away one months’ expenses and then automate a small deposit into your savings while you eliminate your high interest debt.understand that marriage, just like life, has some unexpected events. An emergency fund can relieve a lot of stress and tension in your relationship.
- Rent an affordable apartment. Please try to keep your rent as reasonable as possible. If you are in a marriage with a lot of debt already, having a modest amount for rent can be a huge way for you to have money to pay down debt. You can always upgrade later, but it hard to downgrade. We had a very small first apartment (ask our friends), but we were able to pay off the car loan faster and later we upgraded to a more spacious place.
- Drive used cars. I wish I didn’t have that car loan when we first got married. It was an annoying monthly bill that decreased our cash flow and slowed us down on building our savings. Owning a car also means car insurance, gasoline, and maintenance bills. If you have a car that is relatively dependable and you own it, that’s a great win. If you live in a city with a good transportation system, then use it.
- Set up free online bill pay with your bank. Most banks and credit unions offer this money and time saving feature. Spend an hour setting up your free online bill pay with your bills, account numbers, due dates, and amounts, and you’ll only need a few minutes a month to keep it up. Automating our finances has a great step for us.
Do you have any stories about what worked and what didn’t work with you?