Why you Need a Household Strategy to Really Start Saving Money
Saving money is one of the most difficult things to do with everything at your fingertips. It is an exercise in will-power and self-discipline. Complex emotions surround this taboo topic in our culture. It can really put a strain on our relationships. But one of the best things you can do to avoid unnecessary stress is to sit down and discuss a household strategy by using these steps.
Step 1: Really Listen
To start, sit down and have a financial date. Discuss with your partner your different experiences, values, and goals when it comes to your finances. The best thing to do while your partner is talking is to listen. Don’t interrupt, and simply listen and be respectful, because money is a very personal thing. Finances can sometimes bring up feelings of guilt, shame, or defensiveness. And your goal is to work together to create an honest, open discussion free of judgement.
Step 2: Set a Goal
After you are finished listening to each other about your financial background and individual goals you can always choose to take a break. You can break up the strategizing into a number of conversations over the course of a week. Take some time to think about the information you have just shared with each other. Write down some questions you may have and even ask yourself those questions.
Once you have a good idea of each other’s financial values and priorities reflect on how you can work together. It may be that you two have differing opinions of money. How it should be spent, what it means to have, where it should be stored, etc. One of you could prioritize saving, and the other spending. It can get hairy when you two have different values and priorities. But the important thing is to remember to be respectful of each other. Try to see things from each perspective and see the advantages as well as the disadvantages. Be honest about your feelings.
Even if you do have differing views on money, if you are honest and respectful to each other, you can come up with some financial goals to work towards together. And each play a role in working towards that goal. Write down your joint financial goals, and within those goals you can include individual financial goals.
For example, your joint financial goal could be to save money for a down payment on a house. And individual financial goals within that could be to be more accountable by writing down every purchase you are making. Or if your partner is normally the one to cook the meals, your individual goal could be to take some days to make dinner to relieve your partner of some responsibility. Work together and share your individual goals with each other. Come up with short as well as long-term goals. Make sure to write out actionable steps to take and hold each other accountable with a due date.
Step 3: Make a Plan
It goes without saying that if the goal is saving money, reducing the amount of debt or payments you have is important. Living paycheck to paycheck can create constant stress and with debt on top of that, sometimes it can seem unbearable. Working together in a respectful manner towards your financial goal from this point can be very stressful. It can put serious strain on the relationship. The best way is to motivate each other into working through the process. There is no need to play the blame game. You are a team and it doesn’t matter what happened in the past. Start this household strategy with a clean slate and work together towards your goal.
Step 4: Plan for Emergencies/Loss
Write down your plan to pay off the debt if you have it. Talk about your plans to stay out of debt in the future. Discuss future large expenses you are expecting to deal with such as loans or mortgages. If you do not have a budget, set one up together. I have a post about budgeting here. How will you handle emergencies? Do you have an emergency fund? Check out my post on emergency savings and sinking funds here.
Once you are in a committed relationship you need to discuss how to handle a situation where one of you may not be able to work, becomes disabled, or passes away. As difficult as it is to think about, let alone discuss, it’s important to have the conversation now and make the plan because if it should ever happen, adding any financial stress to your grieving process will be horrendous.
Step 5: What About Retirement?
After the unpleasantly difficult discussion of what if’s, the next step is to discuss building wealth. I am obsessed with financial independence and coming up with different passive income streams. This is just what I enjoy pursuing, that doesn’t mean it’s the only way. As long as you don’t continuously exchange your time for money, aka earn a paycheck for the rest of your life, you should be able to figure out retirement. To most people this means having enough financial resources to have control over their time at some point in their life. In order for this to happen, you need to plan, save, and invest as early as possible.
This is also an important step for the two of you to take together and make sure you are heading in the right direction. Wealth building is beyond this post, but there are tons of different ways to get there. You could get started by being an employee and start investing in an IRA or a 401k. You can start your own business, invest in real estate, or even gain an inheritance and live off the interest.
Make a plan for your lives together. Lessen your stress and work towards your goals together. Find your way to live your lives driven by your own curiosities.
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