Provided by Ameriprise
All year long, you plan for vacations, graduations, weddings and family reunions. Your packed event schedule could impact your financial health, so it’s important to set expectations with your family and friends early in the planning process. Talking about money with family members and friends can feel awkward, but in some instances, not talking about financial expectations upfront can create stress and tension down the road. It could also leave you with a larger dent in your pocketbook than you expected.
Practicing good financial etiquette can help you smooth the way and minimize complicated financial situations. Establishing a budget and knowing what you can — and cannot — afford to spend, is the first step. The next is clearly and proactively communicating your financial boundaries to other involved parties. To help you get started, here are a few tips on how to approach some common financial discussions with grace.
Going out for dinner — Before you make a reservation or stop somewhere for a bite to eat as a group, discuss your price range preference, and reach an agreement on whether to split the bill evenly or ask for separate tabs. If you are on a tight budget, simply say so. Most people will understand and agree to separate tabs at an affordable location.
Celebrating milestones — Birthdays, weddings, graduations and other events can quickly become costly. Look at your budget and determine what you can afford to spend on gifts and travel expenses before the invitations start rolling in. Also use your budget as a guide to your decisions on when to decline an invitation to an out of state wedding or other expensive event.
Giving gifts — If you plan to go in on a large gift with someone else, be clear about your spending range before the shopping begins. If you’re the one purchasing the gift, it’s important that the total cost of the gift doesn’t put a financial strain on your short-term finances. It may be unlikely, but if the other party unexpectedly can’t reimburse you for their portion, it could also strain your relationship.
Co-hosting an event — Whether you’re hosting a barbecue with the neighbors, a family reunion funded by all the siblings or your child’s wedding with your ex-spouse, it’s important to discuss the budget for the event and how the costs will be divided before the planning begins. What’s more, if someone is donating their time — for example, to clean their house or create the floral arrangements for the event — factor the going rate for their services and the number of hours the task will take and give credit where credit is due. Doing so will help all parties feel recognized and appreciated for their time or financial contributions.
Planning a vacation — When travelling with others, agree upfront on a budget and who will pay for what before you hit the road. If you are booking the trip in advance — and cannot book accommodations or other aspects of the trip separately — ask your fellow travelers for reimbursement upfront so that you’re not left feeling cheated or financially strained. If you are the one responsible for reimbursing someone else, do so before you depart for your destination. It will make it easier for everyone in your group to relax and have a good time.
Keep in mind With today’s busy lifestyles, details can easily get lost in the shuffle. When planning larger group events or trips, consider creating a shared document that outlines the proposed budget and who is responsible for what costs and when payments are due. This will help minimize misunderstandings, making these events less stressful — and more enjoyable — for everyone involved.