by Jill Krasny
Planning for disaster is a part of any good relationship that many couples forget.
“A lot of people have their finances set up as if nothing will ever happen, but of course that isn’t how reality works” says T. Rowe Price financial planner Stuart Ritter. “Things happening is a part of life.”
With advice from Ritter and other marriage and finance experts, we’ve rounded up seven steps all couples should take to ensure they don’t get caught in the storm.
Assume you’ll have rainy days (and you will)
The last thing you want to think about when your spouse falls ill or you wreck your car is how you’re going to pay for it. All too often, our optimism keeps us from preparing for the worst and then we’re caught out in the rain.
“Making an emergency fund part of your priorities is acknowledging that good and bad things happen,” says Ritter. “This means that when those things happen, you get to focus on the unfortunate part and not worry about the money part.”
Set realistic goals
You’ve got to be patient, says Ritter, who all too often sees couples get tripped up by unrealistic savings goals. (See why being too patient might hurt your credit score.)
“Don’t think you’re going to be set in three to four months or three to four weeks,” he says. “It’s going to take time, but not as much time as you think.”
BI’s copy editor, Jill Klausen, says it took her roughly two to three years to reach her goal.
The wait was worth it: “We have security in the event of a layoff, and know we have time to find other work if one of us loses our job (which one of us did, and it worked!).”
Automate your savings
“Putting a program in place will keep you on track, even when you’re less committed to it,” says Ritter, who finds that when given the choice between a weekend trip with friends and socking away money, nine times out of ten, we’ll take the trip.
“It’s just more effective to make sure you’re consistently saving than saying, ‘Today’s January 7th, I’m going to decide to contribute to my fund,’” Ritter says. “All those other things you want are going to keep popping up, and you may not have the same resolve as you did when you were making your New Year’s resolutions.” (See 6 tips to help your New Year’s resolutions stick.)
Automating your savings is as easy as transferring a chunk of your paycheck into an account on the first and 15th. Set it up today and you’ll be counting the zeroes before you know it (unlike this guy).
