#RealMoneyTalk: How to Have the Gift Giving Talk with Your Partner

It’s the most wonderful time of the year! The decorations are out, everyone’s in a festive mood, and you have to find the perfect gift for everyone on your list including your significant other. The holidays are a time for giving, but they’re also a great time for you and your partner to have a #RealMoneyTalk about your holiday spending budget, whether you’re only exchanging gifts with each other or you’re gifting to others as a couple.

It’s hard enough deciding what to gift that special someone in your life without also having to worry about spending too much or too little. Setting a budget that you are both comfortable with for mutual gifts will reduce the stress of gift giving. And setting an overall budget for the holidays makes it less likely that you will go overboard and end up ringing in the New Year with a whole bunch of unexpected debt. So here are some tips to help you ease into the gift giving talk with your partner.

Have a visit with the ghosts of Christmas past.

Before you dive straight into the hard numbers, spend some time talking to each other about what the holidays mean to you and how you feel about gift giving. Many of our spending habits and gift expectations can be traced back to our childhood. This is especially true around the holidays.  A child whose parents traveled a lot but were always home for the holidays bearing gifts will likely have a different view than someone who went on family vacations during the holidays.

These deep, almost unconscious emotional triggers can make talking about money–which is already tough to begin with–even harder. By talking about holiday memories first, it gives both you and your partner some necessary emotional context. This will help you empathize with your partner and be even more productive during your gift giving talk.

Set a gift budget that you both feel comfortable with.

It can be really easy to get caught up in the fun of the holiday spirit and end up spending way too much money. So take some time before the holiday season gets into full swing and decide how much you want to spend during the season. Talk about what you each feel is a reasonable amount to spend on each other, on others, on holiday decor, and even travel and parties.

To avoid overspending, you’ll want to make sure your budget is comprehensive.  Include anything at all that would not be part of your regular monthly budget. Remember to include extra donations, decorations, and parties because lots of small things add up and start to impact how many gifts Santa can afford to carry in his bag this year.  The last thing you want is to run up your credit card balances and start off the new year with regrets.

It’s possible that when you start talking about what is a reasonable amount to spend on each other, you might find yourselves with two very different figures. Take the time to talk through these differences and understand where the other person is coming from so that you can reach a compromise. If you haven’t shared many details about your overall financial situation, like your income and budget, now might be the time. Being willing to share your budget with your partner can help them understand why you have chosen a certain spending limit.

Make your holiday list and check it twice.

Now that you’re on the same financial page when it comes to gift giving, it’s time to make your holiday budget. There are two ways to tackle this task. One option is to first list all of the gifts and activities you expect to spend money on during the holidays. Next, to each item or activity, write down the amount that you think you should spend or that you want to spend for that thing. Total it all up and you have your holiday budget. Hopefully, the number you came up with will fit comfortably in your overall budget. If it doesn’t you will have to start tweaking numbers here and there to make it fit.

The second option is to start with how much money you have available to spend on the holidays and work backward from there. This method injects a healthy dose of reality into your holiday dreaming in advance. Take a look at your monthly budget and any discretionary savings accounts you have to see how much potential cash you have to work with. If the sum is looking small, see if you can divert money from other areas just for the month. Or consider getting a part-time job or side hustle during the holidays to boost your available funds.

At the end of the holiday season, use this budget as a starting point to help you plan next year’s budget well in advance. That way you have the whole year to save up.

Find creative ways to make the holidays special.

Traditional gifts are wonderful, but they are just one part of the magic of the holiday season. Finding creative ways to spend time together and build holiday memories beyond extravagant gifts can be a great opportunity to make your partner and your budget happy.

Try planning free festive activities throughout the season, like going to a free holiday parade or curling up with some hot cocoa and a movie. Taking the time to plan activities and spend quality time together is a great way to enrich the holidays beyond just gift giving.

Another option is to forgo giving traditional gifts entirely and instead use the funds at a later date for a shared experience like a vacation or concert.

It’s all about figuring out what works for you as a couple while making sure that you are also making good financial decisions along the way. By having these gift-giving talks and setting expectations in advance, you’ll make sure that your holidays are very merry and happy.

This blog post does not constitute, and should not be considered a substitute for legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.