As you get your budget under control, get out of debt, and build an emergency reserve, you will have increased cash flow.
With more money coming in, you will have the opportunity to make large purchases.
Question is, how do you decide on what to purchase first?
Let’s assume of course that you will save the money for the expense and will not use debt.
How then do we agree with our spouse on a priority order on the purchases?
Invariably, you will have different ideas on what to buy.
One of you may want to save the money for a nice vacation while the other person wants to beef up the emergency reserve a little more.
Or one of you wants to do a home remodeling project that has been put off for a while, and the other person wants to buy a full entertainment system.
Here is an approach my wife and I use to come to an agreement about large purchases.
As you look at shared goals for this year, this might help you as well:
- Make a list of all the potential expenses. Some examples include: vacation, car replacement, kitchen remodel, new couch, big screen TV.
- Assign an estimated cost to each item.
- Each person then goes down the list and assigns a priority (1 to 10) to each item.
- Compare your priorities. Share with each other why each item is important.
- Come up with a combined priority list.
- Here is where the art of compromise comes in.
- You are building a life together, so surely you can build a priority list together.
- Total the amount required for all items. Based on your financial picture you might not get to all of them this coming year.
- But you will get to the items that are important to both of you.
- Now you know where to target your savings and you have a common set of goals.
When you are married, the only way to win with your money is to work together with your spouse.
Healthy finances lead to healthy marriages.
If you are not working with each other you are working against each other.
Try this method and let me know how it goes!
This post is also available in: Spanish
