Love, Money and the Holidays: Balancing an Income Gap

Navigating the expenses of the holidays is hard enough on your own—you have to decide which holiday parties you’ll go to and which ones you’ll skip, who you’re buying gifts for and whether you’re traveling home. And do you need those amazing red pants for your party circuit? Probably yes.

When you’re part of a couple, it can be even more stressful. Two families, potentially twice as many friend groups and events—plus pressure to come up with a nice gift for your person on a deadline.

It’s always important to talk about money as a couple (and you should probably be doing it earlier in your relationship than you think), and the holidays can be a great starting point for that discussion. When the two of you are bringing in vastly different incomes, the conversation is even more important.

“Talk openly and honestly about your personal money stresses around the holidays with your partner, and see if they have any money issues they would like to talk about that come up for them at this time of year, as well,” Texas-based therapist Heidi McBain said.

Keep gifting low-stress

There’s not one perfect solution for every couple, but setting expectations ahead of time can help cut down on stress as the holidays approach. That means both of you sharing your plans for travel and gifts, coming to a consensus about what the holidays together will look like, and deciding the best way to manage your plans financially between the two of you.

Illustration of couple holding gifts behind their backs. Income Gap pbs rewire
Gift exchanges are supposed to be fun, not stressful.

“If you make significantly less than you partner, talk to them about travel and gift buying stresses,” McBain said. “Maybe you end up staying home, or maybe you each put a percentage of your income towards travel expenses” based on how much you earn.

This conversation could include setting a budget for your own couple gift exchange. Depending on their feelings around money, this could relieve stress for the person in the relationship who makes less.

“Something I’ve done in relationships was to set a budget for each other’s gifts that we would both agree to, and not go over,” said Dustyn Ferguson, author of personal finance blog Dime Will Tell. A pre-determined budget can cut down on income disparities playing out in a gift exchange, and one person ending up embarrassed of their gift.

“This would allow both partners to feel like it is an even playing field and won’t leave anyone feeling bad for giving less. It also makes any guilt dissipate as a byproduct, simply because it was talked about and agreed upon beforehand, which also helps get rid of surprises.”

After all, gift exchanges are supposed to be fun, not stressful. Of course, for some couples, money is not a point of insecurity for either person. For others, exchanging gifts isn’t part of their holiday tradition. That makes things a lot simpler.

If you do want to exchange gifts, but need to be frugal, making a gift, or finding a meaningful but inexpensive gift, would probably be the highlight of your person’s holidays.

“When there is a difference in income for those in a relationship, this can act as a method for keeping the act of gift-giving conflict-free,” said Douglas Keller, author of Peak Personal Finance.

“Whether it’s presenting gifts to each other or purchasing gifts together for loved ones, prioritizing the meaningful over the expensive is a great way to provide wonderful gifts while saving money and avoiding the traditional woes of the holidays.”

Work out a travel plan

Have you decided to take a trip for the holidays, either to visit family or to get away? Figure out the best way to split costs based on your incomes.

“When you and your partner make different amounts, especially for those with a large income differential, figuring out travel can be tricky,” Keller said. “One thing to consider for offsetting the need for one partner to pay more or cover the cost for the other entirely is to proportionately divide up the effort of putting together travel arrangements.”

If one person can’t contribute as much money to the travel fund, they can take on more of the other responsibilities.

“That means that the individual who is putting in less money should take on a greater role when it comes to purchasing plane tickets, figuring out an itinerary, and doing price comparisons to save as much as possible,” he said.

There are lots of ways to split the cost. Do it in a way that makes sense for your relationship and your individual budgets.

If you are the person who makes less, try not to have shame around it, and remember that your partner wants to be a partner to you. If you are the person who makes more, be empathetic and sensitive around money issues. Keep in mind that it can be hard to be the person who feels like they’re not contributing as much.

Try to take the stress out of holiday finances by having fun with it.

“See you if and your partner can come up with a budget that you’re both okay with this time of year, and turn it into a fun game to stay within the set budget,” McBain said.

Katie Moritz

Katie Moritz is Rewire’s senior editor and a Pisces who enjoys thrift stores, rock concerts and pho. She covered politics for a newspaper in Juneau, Alaska, before driving down to balmy Minnesota to help produce long-standing public affairs show “Almanac” at Twin Cities PBS. Now she works on this here website. Reach her via email at [email protected] Follow her on Twitter @katecmoritz and on Instagram @yepilikeit.