Finances can be a difficult subject to approach in any partnership. Whether your money style is a direct image of your parents, or an overcorrection thereof, AO Wealth has a few tips.  Below, we will discuss ways to meet in the middle, and achieve common financial goals together. This can be done through understanding your financial skill style, determining your partner’s style, meeting in the middle and setting goals as a team.

Understanding Your Financial Skill Style

When trying to comprehend your own personal financial skill style, there are some key questions you may want to keep in mind. 

Determine Budget Approach

You should first determine how you budget, or if you even budget at all. By tracking your spending you are able to organize what money is coming in and what money is going out. You are also able to determine where you are spending money that could be saved.  If you’re just diving into budgeting, remember to check our 9 Tips for Better Budgeting in 2021. There are many different strategies when it comes to budgeting, so determining what works best for you may take some time. 

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Savings

The next topic you should think about is your savings. Do you have enough money to cover an unexpected cost or financial emergency? Life is constantly throwing curveballs at you, so it is important to try and save 3 to 6 months worth of expenses in a savings account. We recommend 3 months for a two income household and 6 months for a single income household.  Along with having 3 to 6 months in saving you should also be determining your different investments and your retirement situation. Although there are risks to investing, it also creates opportunities to earn a return, builds wealth, and can protect against inflation. A 401 k or Roth IRA are great places to start.

Determining Your Partner’s Style

Along with answering the above questions yourself you should also sit your partner down and discuss their answers to the above questions. By having this discussion you will be able to see where you both are starting financially as a couple, and work to build from there.

Related: 5 Signs You Are Ready To Hire A Financial Advisor

Setting Goals And Meeting In The Middle

Relationships are all about communication and compromising. This should be the same when it comes to discussing your finances. It is important to set aside a specific time to sit down and discuss your financial goals. Start with creating a short-term goal, and then work to build medium-term and long-term goals. You should also make sure to have shared goals as a couple along with individual financial goals. Using the SMART method can make creating these goals easier. The SMART method stands for specific, measurable, attainable, relevant, and timely. Ask yourself these questions when discussing your financial goals with your partner to help get the conversation started. 

Once your goals are in place you should create a strategy determining how you will work to achieve these goals together. During this phase you should dive into your budget and determine your net household income (household income - total monthly expenses). Once your net household income is determined you can then decide how you will invest the remaining money. You both should also determine if any of your goals need to be added into your budget in order to start making them a reality. 

Meet Adam Obrecht, CFP®Certified Kingdom Advisor

Now that you both have put in all this work it is important to continue to check in on the progress you are making. You can do this by setting up accountability check-ins where you will discuss and reassess your financial situation. During this time you will determine if anything has changed when it comes to your finances, and alter your plan as needed. It is important to stay flexible throughout this process and realize you both aren’t going to be perfect. As long as you are communicating and staying flexible throughout the process you will continue to see progress, and be closer to achieving your goals.  As always, if you are needing further assistance the people at AO Wealth Advisory would be happy to sit down and chat with you and your partner.

Advisory services offered through A.O. Wealth Advisory, LLC, a registered investment adviser.