Developing a Shared Financial Vision

Money Problems and Financial Concerns:   Couples often enter into relationships with different financial expectations, desires, goals, habits and ways of communicating.  Some people have debt, savings, and commitments to paying for extended family members needs.  Marital bliss typically involves developing a shared financial vision about the way money is viewed and used.

Developing a shared financial vision

Write out all of your current non-negotiable yearly expenses

• Rent or morgage payments (including real estate taxes)
• Household repairs (plan for the next ten years, and then estimate the yearly cost.... the reason we suggest planning for ten years is that your roof typically needs replacement every ten years, refridgerators, washing machines, dishwashers, hot water tanks will all need replacements and all of these expenses need to be budgeted for).
• Electric
• Gas
• Cell phone
• Internet connection
• Health insurance (including deductable - you never know when you are going to get sick)
• Car payments / car maintence (repair & gas) or Transportation costs if you don't have a car and take the bus to work.
• Food (assuming you only shopped at the grocery store and did not go out to eat)
• Educational costs for children
• Loan payments
• Feel free to add more categories

If your expenses exceed your income - you need to scale back on your housing costs.  For some this means selling their home(s), getting a roomate who pays you rent, others it means moving into a cheaper rental apartment, or moving back home.   In addition, consider downsizing your car or selling your car and getting a bike. Lastly, find a new job that pays more (wish it was always that easy).

Assuming that you have money left after your basic expenses have been met, whatever is left is what I consider to be your "flexible" money and depending upon what you value will determine where you spend the money.

Write out all of your current "flexible" spending habits

• Clothing
• Food & Enterntainment (resteraunt, live shows, massages, dance lessons, voice lessons, cooking classes)
• Gym membership / sports dues, sports equipment
• Counseling
• Transportation costs (cabs, trains, buses, parking garages)
• Furniture
• Vacation / travel
• Landline / cell phone / cable
• Retirement money savings
• Feel free to add more categories

Ask yourself if you are comfortable with this allotment. Are you saving enough for the future on your current plan?

Once you and your partner have EACH completed the above tasks share your notes.  What looks the same on each of your lists? What looks different?  Why is that?  How do the two of you make sense of your differences?  BEFORE ATTEMPTING TO RESOLVE THESE DIFFERENCES EACH OF YOU NEED TO PUT YOURSELVES TO TASK by determining how accurate your projections are.  Each of you should track your money habits for the three months and see what really is happening.  Then each ask yourself if you are happy with your findings. If you are, keep on going. If you are not, then you at least know what spending habits are problematic in this relationship.

Making Sense of the Financial Data:

Complete the following questions

1. In the next one year my financial goals are . . . .
2. I imagine my partner's financial goals are . . . .
3. In the next five years my financial goals are . . . .
4. I imagine my partner's financial goals are . . . .
5. In the next 10 years my financial goals are . . . .
6. I imagine my partner's financial goals are . . . .
7. In the next 20 years my financial goals are . . . .
8. I imagine my partner's financial goals are . . . .
9. To retire, realistically, I imagine I need in today's dollars . . . . .
10. To retire realistically, what I imagine my partner needs in today's dollars are . . .
11. The lifestyle that I would like to have is . . . . .
12. The lifestyle that I imagine my partner wants is . . .
13. What I feel entitled to is  . . . .
14. What I imagine my partner feels entitled to is . . . .
15. The lifestyle I do have is . . . . .
16. The lifestyle my partner has is . . . .
17. My fear about my lifestyle is . . . .
18. My fear about my partner's lifestyle is . . . .
19. Where I spend the most money is . . . .
20. Where I imagine my partner spends the most money is . . . .
21. The indulgences that I allow myself are . . . .
22. The indulgences that I imagine my partner allows herself / himself is . . . .
23. Where I am most likely to waste money . . . .
24. Where my partner is most likely to waste money is . . . .
25. The easiest area for me to financially scale back is . . .
26. The easiest area for my partner to financially scale back is . . . .
27. The amount that I realistically hope to set aside each year is (next five years, ten years, 15 years, 20 years etc). .
28. The amount that my partner realistically hopes to set aside each year is . . . .
29. The amount that I am currently setting aside is . . . .
30. The amount that I imagine my partner is currently setting aside is . . . .
31. What prevents me from saving more is . . . .
32. What I imagine prevents my partner from saving more is . . . .
33. My belief about debt is . . . . because . . . .
34. What I imagine my partners belief about debt is . . . because . . . .
35. The highest house morgage that I am prepared to have (relative to my income is). . . . because . . . . .
36. The highest house morgage that I imagine my partner is prepared to have is (relative to their income is)  . . . because . . . .
37. The school debt that I have is . . . . my plan to pay it off is . . .
38. The school debt that my partner has is . . . and their plan is to pay it off is . . . . .

Share your answers with your partner. See which answers are the same and which ones are different.  Often through this simple (long) exercise the issues will become far more clear. Often solutions will jump out.