Q: Money issues are always difficult for my wife and me, but they get even worse during the holidays. She is super tight with her money and I like to have a good time. We often joke that our marriage proves that opposites attract, but the stress this causes during Christmas is no laughing matter. Do you have any ideas that can help us get through Christmas without fighting over money?
A: Your question is one of the reasons I love being a financial planner. We work with people in a lot of different ways. One day I’m helping a client work through a complex investment strategy. The next, I’m helping a married couple work through their financial stress.
Given the difference in the way you and your wife relate to money, I’m not surprised when you say Christmas is challenging. Even day-to-day money issues can be difficult. But when you take the normal stress and supercharge it with holiday expectations, suddenly there is the potential for serious conflict.
It is important to understand that money conflict often has more to do with poor communication habits and less to do with the amount of money in your bank account. Poor communication can lead to each partner feeling judged by the other. The spender sees his partner as being miserly (I believe the phrase you used was “super tight”), while the saver sees her partner as being a spendthrift. Even if judgments go unspoken, they are communicated in subtle ways. Judging sparks resentment and resentment diminishes trust.
Just because money has been a difficult topic for you in the past, doesn’t mean it has to always be that way. Here is a very practical exercise you and your wife can use to help reduce money-related conflict during the holiday season.
First, give yourselves an overall holiday budget. It is okay to spend money on the holidays, but you need to be realistic about what you can afford. If you are going to use your credit card, use it with care. A good rule of thumb is to limit holiday debt to no more than you can repay in two billing cycles. Agreeing to a budget is a good way to communicate expectations and boundaries.
Next, sit down together and make a list of all the things you feel are important to the holiday season. For each item on the list write down two numbers--the most you are willing to spend on that item and the least you believe you would have to spend.
Finally, prioritize the items on your list. A points system can help keep the exercise objective and balanced. You each get one point for every item on the list. For example, if your list has twenty items, you each get twenty points. Prioritize your list by allocating your points among the items. The item with the most points gets the first claim on budget dollars. The item with the next highest point allocation gets funded second and so on until you run out of budget. Using a spending range for each item gives you room for healthy negotiation and allows you to fine tune your selections.
Communicating better about money isn’t just a good idea at Christmas. Use this exercise all year long to help reduce the financial stress in your marriage.
Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to firstname.lastname@example.org.