Even though January is often a time when new financial goals are set, my wife and I didn't set explicit goals for ourselves at the beginning of the year. Since we save throughout the year for large, annual goals such as travel and car insurance, we thought we were covered. However, we realized that after the first three months of 2018, we needed to have a "money catch up" to clarify our big picture, longer-term goals. (If you've never had a money conversation with your partner before, don't panic - check our blog post by journalist Jennifer Nelson to learn 5 tips on how to get started!)
We agreed we wanted to focus on:
- Getting aggressive with our student loan payoff strategy
- Being mindful of spending habits during the month so we don't dip into our emergency fund (it's amazing what counts as an "emergency" when you haven't planned!)
- Creatively finding ways to add to our savings goals, such as saving our salary increases #LifestyleInflation
In addition to agreeing on these core goals, we looked at which money behaviors have worked (and which didn't work) in 2017.
- Qapital. Last year's experiment was to review a year's worth of spending, identify when large recurring costs came up, and set up savings goals in Qapital. Before Qapital, we were consistently missing the timing of large recurring costs such as the excise tax on our car or school fees, causing us to dip into our savings. Using Qapital, we were able to account and save for all of our goals except for three.
- Money catch ups. We both agreed last year to set aside an hour on a Sunday every few months to discuss money topics. This way, we're on the same page when discussing financial goals.
- Paying attention to how we spend. Our behaviors often deviate from what we say we value. We said we valued cooking at home to help save money, but our takeout spending showed us that we also valued having free time (cooking does take time, after all!). Being realistic that both are important helped us to better judge when we wanted to follow certain values over others: when we'd had a draining week and just wanted to relax, we'd order in. When we had lots of energy, we'd meal prep for the week ahead.
What didn't work:
- Not having good financial management tools that work for couples. My wife and I share our finances 100%. While I love Mint for its ability to our aggregate accounts, show historical spending, and be customizable, my wife is not a fan. It's meant for single user access. It also goes heavy into the details of spending and can obscure what you need to focus on in the moment such as "How much do we have left to spend this week?"
- Having two credit cards. For six years, we used one credit card and would log in to one platform to see the balance. After I signed up for a new credit card last year, it meant that whenever we looked at the balance of the original card, we would often forget to consider the newer card (and thus underestimate our spending). With our busy schedules, it just didn't work for us to have another account to log in to and consider.
- Incoherent money documents. I love Excel workbooks with multiple tabs, while my wife likes a single spreadsheet. Even after 10+ years together, we're still learning how each approaches money and the importance of creating money documents that are easy to follow. We're learning not to assume that the other person is reading the document in the same way.
- Impulse spending. It's easy in the moment to spend money on something that catches your eye. It's not wrong to treat yourself or buy something to reward an achievement from the week. On the other hand, even relatively small impulse purchases can add up. Consider if the purchase is something that can wait or if it's really important to buy in the moment. I've started keeping a list on my phone of items that I want to purchase if we come in under budget that month.
What was a money goal that you set earlier this year? Was it difficult or hard to keep and what have you learned?
Check out our blog post on Habit Stacking if you need some specific tips on how to improve your financial wellness.