The holidays are fast approaching, and even if you know how to stick to a budget, the same thing may not be true of your spouse or partner. All couples face money challenges from time to time. But the extra spending that often occurs during the holiday season can put added financial pressures on a relationship.
The good news is that even if you and your significant other have totally different spending habits, you can learn to compromise, reduce financial conflict and take some other steps to ensure your financial harmony. Here are seven tips on how to manage your holiday budget—especially when your mate loves to spend money or doesn’t view personal finances the way you do.
1. Accept each other’s money personalities
To minimize spending disagreements, start by acknowledging and accepting your honey’s money personality.
Your mate may be a compulsive shopper who wants to play Santa and buy gifts for virtually all of your friends and family. Or he or she may tend to be Scrooge-like, and bristle at the thought of spending more than $25 or any one gift.
Whatever the case, this is likely an intrinsic part of who they are. So don’t start from the position that you need to “change” the other person.
Over time, some of their more excessive behavior may change—especially if you are a positive influence and handle money conversations sensitively without being accusatory.
However, when you don’t agree with your partner’s spending choices or fiscal habits, understand that you simply don’t have the same perspective about money, and you probably never will.
2. Create a realistic budget together
Don’t allow one person to shoulder the sole responsibility of creating a holiday budget or managing your joint accounts and holiday purchases. That’s asking for trouble when two individuals have completely different views about money and different financial practices.
Instead, set aside time to review finances together and create a realistic holiday budget based on your spending habits and your mate’s, as well as how much cash flow you both have. The idea is to establish a reasonable spending plan (i.e., budget) that both of you can live with and agree to stick with during the holidays.
Even though it may be tough to have “the talk” about money and holiday spending, keep in mind that couples that can work through thorny financial issues instead of just avoiding money conversations are helping to keep their relationships intact.
That’s because all that better financial communication can help you create more open dialogue about non-money issues as well. And good communication is a cornerstone of a healthy, thriving relationship.
3. Set spending limits
If your significant other just can’t stop spending or has a tendency to go on impulsive spending sprees when he or she hears jingle bells and holiday music, make sure he or she is aware of where things stand financially as the weeks go by.
You don’t want your mate to keep shopping every week, to go hog wild on Black Friday or Cyber Monday and keep spending right up until Christmas Eve if it means he or she is blowing your agreed-upon budget or is being dishonest about how much he or she is spending.
Bringing up the issue without being confrontational can be tricky, but you both really do need to keep tabs on the overall household spending in November and December. Otherwise, you’ll look up later in the New Year and find that a whole slew of additional purchases were made that fell outside your budget.
4. Don’t feed a credit card habit
If you can’t pay off your balances in full, don’t fall into the trap of using credit cards for your holiday purchases—even if you’re earning cash back or any type of rewards.
The credit card habit can be very difficult to break when someone in the family enjoys shopping with credit for holiday toys, decorations, clothes or other items. Take steps to pay for as much as possible with cash, and encourage your significant other to bring cash—not just credit cards—on each shopping trip.
5. Do more holiday shopping together, including comparison shopping
When you need to tighten up your holiday budget and your significant other still insists on additional shopping, plan on shopping together. Take the time to create a specific gift list so that random purchases don’t wind up in your shopping basket.
Also, be sure to set aside time before going on a shopping trip to research items, compare prices, and make the best decisions about what gifts you’ll buy, where, and at what price.
Sometimes just having someone along to shop with can be enough to ward off a mindless shopping spree, and may help your significant other make more rational purchasing decisions.
A word of caution though: don’t become Scrooge or the shopping police, constantly saying “no” or acting like you’re going to “fine” your mate for every shopping “violation.” If you become nothing but a holiday “killjoy,” your mate will quickly tire of having you go along on holiday shopping ventures.
6. Agree on financial fidelity
Either one of you can blow your holiday budget if you keep financial secrets. Surprisingly though, many people keep money secrets from their spouses or significant others.
If you’re shopping on the sly, buying clothes, shoes or other goods and hiding them from your partner, you may think you’re avoiding an argument. In reality, you’re being financially unfaithful and are building up a wall of secrecy that prevents open and honest communication.
Even worse, if your mate finds out you’ve been keeping secret bank accounts, spending without his or her knowledge, or making other financial moves in secret, he or she may resent you and wonder what other secrets you’re keeping.
7. Realize that separate accounts are OK
It’s perfectly fine to have separate checking or savings accounts even when you’re in a committed relationship. In fact, separate accounts (again, one that your partner knows about; not a “secret” account”) can be healthy and beneficial for both parties in several ways.
Having your own checking account helps you learn to balance a checkbook and manage cash flow. It also reduces arguments about money, because it gives each individual a greater sense of financial autonomy. And finally, a separate account can be a nice way for the more fiscally “responsible” party in a relationship to demonstrate or model “good” financial behaviors to the other person.
After all, if you’re the saver or planner in a relationship, and your mate is always spending and constantly broke, it’s possible that your good habits might rub off on your honey, particularly if they see your separate account is never overdrawn or down to its last dollar—even if it is the holiday season.
Many couples that achieve financial harmony ultimately find that it’s best to have both separate accounts and a joint account as a way to most effectively manage their budgets.
And when you’re on the same financial page as your mate, money differences start to fade into the background—giving you both greater happiness and togetherness during the holidays and all year.