How To Budget This Holiday Season as a Couple

November 27, 2020 Alex Shea

Deciding how much, on whom, and what to spend money on is always confusing during the holidays. No matter how many times you and your partner have been on this merry-go-round or how much money you're working with, it’s natural to get stuck along the way.

When you don’t have a budget to guide you, you’ll stumble in the dark trying to make sure you’re in sync with your beloved. Last holiday season, 27% of Americans expected to end up with a mountain of debt, according to a survey done by Credit Karma. The same survey found that a good chunk of Americans that get stressed around the holidays are millennials who would rather spend their money on a home than gifts.

Avoid debt like the plague and set a budget that keeps you sane this holiday season.

Photo by bruce mars on Unsplash

How to create a holiday budget

Creating a holiday budget is like creating a regular couple budget. You can even include your holiday budget into your regular budget if you want. Pen and paper work well for budgeting. But so do spreadsheets and couple budgeting apps like Twine and HoneyDue.

Budget before the holiday panic sets in.

More info on what a couple budget is, how to create one, and why every couple should think about one can be found in our Budget Guide.

Step 1: Set a (realistic) dollar limit

Set a dollar limit based on what you have in your checking, savings, and in cash. Don’t rely on credit cards to pick up the slack. You can assign a dollar limit to every holiday you celebrate or combine yours funds under one holiday-budget umbrella.

Your regular expenses should come before your holiday expenses. Pay rent before you splurge on the watch for your beau.

Step 2: List out every expense

List out expenses for the entire holiday season to get a good look of what you (and your partner) want to spend money on. You can split expenses up into vague categories like gifts, food, and decorations before you dig into the nitty-gritty. Whatever amount of detail helps you and your partner navigate spending is the goal.

And prepare to say no to family members who typically ask for money during the season of giving. There’s no category for that. Unless you want to make one.

*For some extra cushion in the holiday budget, create an “other” column you dedicate money to in case you forget something early on.

Step 3: Rank categories by importance

Prioritize so you don’t get overwhelmed by everything you need to spend money on. You may not end up needing every category you listed. Mapping out your priorities will help you figure out which categories to focus on this year.

Step 4: Give each category some money

Divide your total budget into the categories you created earlier. Rough estimates are fine right now; you can clean this up later. Divvy to the best of your ability and don’t forget to put a little somethin’ somethin’ into the “other” category!

Step 5: Clean up the numbers

Make sure that your set dollar limit matches the total of divvied funds. As you work your way down the categories and put dollar amounts beside them, you’ll see how realistic $300 for gifts is. Or if you have to find some wiggle room for the two cousins you forgot to list before.

Holiday Budgeting Tip: Being under-budget is a heavenly thing. But in the event you aren’t, your “other” category can give you some extra cushion. So talk with your partner before you decide to max out your credit cards. They may be able to convince you that a trip to the spa isn't worth getting a side holiday hustle for.

Photo by Arturo Rey on Unsplash

How to save within your budget

Your budget is set and lookin’ real pretty. Now comes the hard part— keeping with it. It’s easy to get shiny-object syndrome and spend impulsively on something you know you shouldn’t. But try your best to keep your budget on the brain at all times! The holiday season is a journey, not a destination.

Step 1: Adjust everyone’s expectations

Switch up expectations with your family, friends, and yourself. Start by talking with your partner about what’s realistic versus dreamy for this holiday season. Sure, it’d be nice to be able to buy every cousin and aunt a gift but saving up for a home has been the plan for months now.

Fill your families in on the details of how you plan to spend the holidays, while also considering COVID-19. And expect a little backlash. That’s natural. Humans get gooey around this time of year.

Step 2: Think before you buy

Shop with a reason in mind to avoid buying something you regret five-minutes later. Go a step further with your budget categories. Make a list of who you're getting gifts for, what you plan on getting them, and an amount of money you feel comfortable spending on them. You’ll surprise yourself at how less impulsive you get with shopping when it’s all laid out in front of you.

Step 3: Put your savvy pants on

Find deals before you spend money on anything on your list. Shop around. Read reviews. Check Instagram for holiday promotion codes. Download the Honey Google Chrome extension. Clip coupons. Do what you gotta do to save a few dollars when you can. And then drop those dollars in the “other” category for safekeeping.

Step 4: Get creative

DIY! Get creative and make your own holiday decorations, gifts, and cards. It may be worth a few YouTube videos and a trip to Hobby Lobby to get into your creative headspace. Personal gifts are always a crowd favorite.

Step 5: Change the Narrative

Change the narrative about family holiday traditions this year. Advocate for both COVID-friendly and budget-friendly alternatives to traditions. Like secret Santa, white elephant, potlucks (per your discretion), or a virtual Black Friday shopping trip. (Last idea is courtesy of Michael Barber, thanks Michael).

Visit your local neighborhood with dancing lights (pretty sure every city has one). Fill your night with charades and board games. Sing together, volunteer together, bake together. You get it. Together is the name of the holiday game.

Together may look slightly different this year but no less special. You can explore ways to celebrate without running up a bill or sacrificing your health.

Holiday Budgeting Tip: Talking with your partner about money and the holidays now can save you from the stress of not being in sync.

Even with 33% of consumers planning to spend way less this holiday season, according to a CreditCards.com survey, a budget can take away some of the stress, anxiety, and sadness that hovers over relationships around this time of year.

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