Setting financial goals as a couple can feel overwhelming, especially for busy dual-career couples like my wife and I. With competing schedules and priorities, it's easy to put money conversations on the back burner. However, a well-structured approach can make goal setting more straightforward and effective and even strengthen your relationship.
It's not uncommon to apply the SMART criteria to your financial goal-setting strategy. However, I believe such criteria fall short of what can help couples.
For starters, your attitude matters. A lot.
Research has found that it is key to come to a meeting about money with the mindset that you're going to figure out how to solve your financial challenge. The authors noted that "viewing conflicts as solvable rather than perpetual" mitigates anxiety and increases the likelihood that partners will talk openly about their finances.
Consider in its place applying the following framework to your goal-setting process:
1. Ensure Your Goals Are Under Your Control
A good financial goal is one you can directly influence. You can't control the ups and downs of the stock market, but you can control how your investments are allocated and how much risk you're willing to take on. You can't control how much your investments will grow, but you can control how much you invest each month.
Example: Instead of saying, "We want our retirement portfolio balance to be $150,000 by December of this year," try "We will invest $500 per month in our retirement accounts."
2. Emphasize Actions and Behaviors
Rather than setting vague goals like "We want to save more money," focus on what specific actions you'll take to make it happen. When managing money, the trick is automating your good habits and making bad behaviors inconvenient.
Example: Establish a savings account at a different bank or credit union from where you do most of your banking. Have a portion of your paycheck automatically deposited into that savings account.
3. Specify What You Will Do When on Track
A goal should include clear milestones that show you're progressing. A satisfying example is debt reduction milestones. The avalanche method is the most effective financial approach because it first tackles the highest interest-rate debts. However, it might not provide the motivating or satisfying feeling of natural milestones that allow for celebration.
An approach that could provide relationship relief and cause for celebration is to set a goal of eliminating a debt that is a point of contention in your relationship. It could stem from a regrettable decision or a debt one of you brought into the relationship.
Example: If your goal is to pay off a debt that is creating friction in your relationship, you might say, "We will make an extra $300 payment toward our debt every month and when it is paid off in 6 months, we will take a night to ourselves and celebrate over dinner."
4. Define When and How Your Behavior Can Be Observed
Money goals are easier to stick to when you create a routine for accountability.
Example: If you want to improve budgeting, commit to a monthly money date: "We will meet on the first Sunday of every month to review our spending and savings."
Related: What is a Money Date?
5. Make Your Goals Measurable
Your goals should include numbers, percentages, or deadlines so you can track success. Visuals are nice as well, digital dashboards with apps or spreadsheets can be motivating.
Example: If your goal is to build an emergency fund, state it clearly: "We will save $5,000 for emergencies by setting aside $500 per month for the next 10 months."
6. State Your Goals in Positive Terms
Frame goals in a way that focuses on what you will do rather than what you won't do.
Example: Instead of saying, "We will stop wasting money on impulse purchases," try, "We will set a $50 monthly fun budget for guilt-free spending."
7. Use Your Own Words
Goals should reflect your shared values and lifestyle. They should feel natural to you as a couple.
Example: Instead of saying, "We will reduce discretionary spending by 20%," make it personal: "We will cut back on online shopping by unsubscribing from retailer emails and only buying items on our wish list."
Final Thought: Aligning Your Goals as a Team
When setting money goals, communication is key. Discuss your financial priorities, write down your goals, and check in regularly. By making clear, measurable goals under your control, you'll create a financial plan that works for both of you—without adding extra stress to your busy lives.
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