What is your financial goal for 2023? Pay off a student loan? Replacing an old car? Saving for the dream wedding? Buying a house?
Set your financial goal.
When reaching your financial goal, we know having a solid plan is among the first steps. It takes discipline and endurance to get to the end of that neverending battle. While most people focus on staying on track to the finishing line, they overlook the importance of being on the same page with your partner, especially when the relationship of money is supremely different.
People aren’t comfortable talking about money so much that it leads to 22% of Americans filing for divorce due to some “money issue.” We should also not be surprised that only 21% are comfortable discussing money with their romantic partner.
Let’s look at Mary and Jim’s story.
Mary and Jim
Jim, 29, is a senior financial analyst working for a large bank, making a living from his talent on numbers and spreadsheets. Being analytical, he is sharp with his numbers and all kinds of tools for analysis. On the other hand, his wife, Mary, is a caretaker. She works as a hospital nurse in the emergency room and consistently works crazy shifts. They have no kid yet after a few miscarriages.
Goal setting
It is always their goal to own their first property. Ideally, closer to Mary’s mom, who might need more responsive care from Mary down the road. They can finance a house in the desired neighborhood based on their combined income and job security.
The simple and solid plan
The plan is to cut unnecessary expenses and put $1,500 or more monthly towards the 20% down payment until it reaches 80k. They want to avoid private mortgage insurance (PMI) because they think the money saved will be put toward a future baby.
In the beginning, they felt very confident with this plan. They even have hope and a strong belief in reaching their foreseeable goal without too much sacrifice. Being analytical, Jim has even created tools to keep track of their income and monthly spending. They also have a review ritual every month to check the progress.
The struggle
Out of the last 24 months since this plan has rolled out, they have only been able to hit their $1500 saving target twice, sometimes even showing a deficit. Unfortunately, those two times the target was hit were the time Jim received his annual bonus.
Most of the time, they don’t hit the target due to some spontaneous overspent, such as a new TV, a surprise weekend getaway, a fancy dine-out celebration, etc.
Even though the spontaneous overspent was always justified by both, Mary believes something has to change and is confident that the overspending is the only reason for the missing target.
High-interest rate environment
As the interest rate keeps climbing, the expected monthly payment of their first house goes up. So the reachable goal of Mary and Jim is moving further away.
After a couple of emergency incidents of Mary’s mom that took Mary an hour to take care of her mom, the frustration of their failed saving plan bothers Mary more and more. Her frustration has shown multiple times during her conversation with Jim, affecting other aspects of their family life and relationships.
After seeking professional financial help, they suggested that the remedy might have little to do with the numbers. Something hidden under the carpet might have yet to be revealed. The coach said they should get together during the time both are not busy and discuss the following:
1, put away the number for now
2, evaluate whether their financial goal is still inline
3, revisit their saving plan
4, discuss how to hold both accountable toward their goals
Hidden Truth
The beginning rounds of discussions didn’t work. Both want to discuss the numbers only. After a few unconstructive games of debate, they put away the number and worked towards being on the same page.
Jim revealed
- After Mary’s miscarriage, Jim thinks the family should focus on Mary’s recovery. Buying a house gives Mary too much stress. Therefore should be set aside for now.
- He doesn’t believe moving closer to Mary’s mom solves her situation, given that Mary’s work shift is unpredictable. There is no way she can provide reliable caretaking for her mom.
- He also doesn’t want his career to be restricted by house ownership.
On Mary’s side
- After her miscarriages, her focus shifted to owning a house. She felt like this is more controllable. Therefore, becoming a homeowner becomes her next big goal. To her, working hard to reach the goal is just a no-brainer.
- She admitted wanting to move closer to her mom is more psychological than practical.
Moving forward
Credit to their honesty and courage to seek professional help, they now don’t just have different financial plans, which both work so hard towards; they also get to feel very connected being on the same page. They have decided:
1, Buying a house in Mary’s mom’s neighborhood isn’t a must anymore. They have consulted with local emergency medical services for more immediate help in case of emergency.
2, They are more open to searching other areas around where the companies Jim is targeting to apply.
3, They have readjusted their monthly saving goal to a higher target and discussed what area to work on to reach that goal.
The verdict
A survey says that nearly 1 in 4 Americans in relationships hide financial secrets from their partners. As a result, money is a challenging topic. And the discussion could be stressful and emotional, sometimes resulting in disagreements and conflicts. And it could harm the relationship.
Learning from Jim and Mary, being on the same page as a couple is essential for the health of a relationship. Most people choose to avoid the conversation or even deny the need to have one. But if you are willing to take that leap of faith and with some professional help coaching the flow, you will be surprised how much underneath the truth could be revealed.
So,
1, pick an undisrupted time
2, find yourselves in a quiet environment
3, start having this small Talk about finance
4, Seek professional help if needed
Good luck