This blog post is Part 2 of a 3 part series. You can find Part 1: Values and Part 3: Creating Agreement in Real Life here.
Your ideals make up your dreams. Your standards make up your real life. Real life beats your dreams every day.
When my husband and I were engaged, one of our most useful agreements involved how we would handle the countertops. We agreed we would put away appliances in the cupboards and not leave them out after use. Our ideal was a clean and neat house. Our standard was a clear countertop. Our standards play a big part in how we live our life day in and day out. Even if your values are the same, your standards may be different. For example, many people have a perfectly clean and neat house, but keep some small appliances out on the countertops at all time. They have the same value, but their standard is different.
In my marriage, we tend to agree on most values. We are fiercely independent, value financial security, and will sacrifice almost anything for big long-term goals. The struggle for us tends to play out in the day-to-day interactions. If we had followed our pattern of discussion our standards as well as values for our finances the way we did for our counters, we would have averted many fights.
Reason #2: You have different standards for how your values play out in real life.
Your standards dictate most of your day-to-day actions, because you tend to develop habits around your standards. I want to be at my desk at work by 8:30 a.m, and arriving early is my ideal. If I arrive after 8:45, I count that as being late, and my standard is to be on time. I know that I have to walk out my front door between 7:40 and 7:50 a.m. to ensure I’m not late. I sometimes arrive at 8:30, but I always arrive by 8:45. My habit of leaving at 7:40 is based upon my standard of not being late. My standard is “don’t be late,” which translates into being at my desk by 8:45.
When we agree as a couple that we will save for a house, or have an emergency fund, or be debt free, we need to discuss exactly what that means. Here are a few examples:
| Value | Standard (Me) | Standard (Spouse) | Joint Standard | Real Life |
| Financial security | Emergency fund: 2.5-3 months of savings in available cash. | Emergency fund: 1-2 months, but can go below that periodically as long as there is a back-up plan. | Emergency Fund: 1-2 months + back-up plan | Watch accounts, and cut spending if we dip into the emergency fund. |
| Provide for kids’ education | Ensure they have money to pay for tuition at state institution. Rest is on them. | Ensure they have money for their education, whatever that looks like. | Still figuring it out – default is lower standard | Working together to decide on best savings vehicles now (when we need cash) vs. paying cash and working an extra 1-2 years. |
| Financial Independence (near-term) | Debt-free, except for house. Live on one income | Debt-free, except for house. Live on one income. | Agreed | We keep our house debt to 2o% of our net combined income. |
| Financial Independence (long-term) | 100% debt free, with enough money to retire by age 58. | 100% debt free, and evaluate as we get into our 50’s as to when we’ll retire, but aim for 62 with a sizeable retirement fund. | Still figuring it out – default is lower standard | Providing for our kids’ education will play a large role in figuring this out. |
As you can see, we have pretty similar values, but our standards are different. Mine tend to be more concrete, his are looser. I want to be completely free of needing income by age 58. He is comfortable working a little longer, particularly if that gives him the ability to be more generous with our children. What we have noticed is whoever has the lower or looser standard tends to drive the discussion, because higher standards require a more aggressive approach in the present.
Many of our discussions and arguments over day-to-day financial decisions, like purchasing new furniture sets, relate directly to our standards. Once you know your main values, you can figure out you standards by asking, “What is the bare minimum you are willing to keep for ___?” Whatever the minimum is, is that person’s standard. Is the minimum the same for you and your spouse? If not, you might have found a way to start cleaning up one of the hardest financial areas to address as a couple.
This blog post is Part 2 of a 3 part series. You can find Part 1: Values and Part 3: Creating Agreement in Real Life here.
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