Is Spending an Issue in Your Relationship? Create a Plan for Your Finances
If you and your partner don’t agree on spending, you’re hardly alone. It’s difficult enough to find common ground on which movie to stream or takeout to grab, to say nothing of what constitutes too much spending – or too little.
Disagreements over how and where to spend your hard-earned money can reverberate through the relationship. Here’s one way to reach accord: Unite on a plan for your finances. By providing a roadmap for managing your money, a plan for your finances can help you and your significant other take control of spending.
The way forward is clear cut – agree on the benefits of a plan, build one together and commit to it. Then let it guide you.
Why You Need a Plan
A plan offers you a tool to save more, reduce your debt and afford the things you want. It also helps to keep you both organized. With multiple bills competing for your attention, it’s hard to remember where each dollar needs to go and how much you intended to save. It’s helpful to gather all of that information in one place for you to reference whenever you want.
Once you have a solid plan, you can feel confident that you’re spending and saving in a way that aligns with your priorities.
Components of a Budget
Although the details will differ, depending on your specific financial goals and other factors, your plan should probably include a few main ingredients. Let these steps guide you:
- First things first, take the time to complete Key’s survey with your partner to get a better understanding of where you currently stand and where you’d like to be. It only takes 3 minutes.
- Write down your goals together. Do you want to save money for a down payment, pay off a credit card or buy a new car? Thinking about your goals helps to pin down what matters most to you and personalize your plan.
- If you don’t have an emergency fund yet, start one. Having cash on hand for emergencies means you won’t have to divert money from your other goals when you face an unexpected expense. If you already have an emergency fund, you can contribute to your retirement savings or save up for a big purchase.
- Set aside money to pay the minimum on each of your debts. Paying off debts is another important component of a good financial strategy. If you can afford to, make larger payments toward the account with the highest interest rate.
- Finally, decide how you’re going to spend your money. Be purposeful about your spending. Look at each category of your budget and think about whether your purchases are going toward things you really need. Are there opportunities to cut costs? You may find that money you’re spending would be better used to pursue a goal or to grow your nest egg.
- Create a monthly budget that outlines how you intend to save, spend, pay off debt and achieve your goals. With all of the components of your plan in place, you’re ready to do this.
Once you have a solid plan, you can feel confident that you’re spending and saving in a way that aligns with your priorities.
Sticking to It
To set yourself up for success, follow these tips to make sure you stick to the goals you’ve outlined.
- Sit down together once a month to track your progress: Review your account statements and see if you’re on track to reach your goals. If progress is slower than expected, be patient and keep at it. You’ll feel a sense of pride as you add to your savings or pay down debt, and you’ll be motivated to continue.
- Ask a trusted financial professional for guidance. Getting another set of eyes on your plan can help you spot potential pitfalls and come up with solutions.
- Set up automatic bill pay or an automatic monthly transfer to pay off debt, and sign up for bank notifications to help avoid overdrafts. Automatic savings programs, such as KeyBank’s EasyUp® program, can transfer money from your checking account to your savings account each time you use your debit card. This allows you to grow your savings as you spend.
In addition to offering control for your spending today, having a good plan can help you manage your finances in the future. But as your circumstances change, your plan might need to change as well. Review your budget at least a couple of times each year to ensure that it’s still working for you.
