Many of us have been put in an awkward or difficult situation by a family member or friend asking questions about our finances or asking to borrow a large amount of money.
This feeling of awkwardness is usually experienced when our boundaries are compromised. Boundaries are a way of protecting ourselves. It is creating limits for ourselves and others. Think of boundaries as a house with limits where you feel protected until someone tries to break in. We will do our best to save those limits as much as possible.
There are different types of boundaries: Physical, intellectual, emotional, and financial.
Financial boundaries mean knowing and stating your preferences and limits around finances and holding firm when you are pushed against them. Some examples include:
- A family member who expects you to share your financial success
- Friends who expect you to pick up the tab
- A child who is constantly needing you to bail them out financially
- A spouse or life partner that overspends
These three steps will help you set up healthy financial boundaries:
COMMUNICATION
It all comes down to communication and willingness to have meaningful conversations about money. The sooner we address the topic, the sooner we will prevent misunderstandings from happening.
KNOW YOUR FINANCIAL GOALS
When you know what you want, you can be firm in your boundaries and understand that this is a form of self-care. Money tends to be the most emotionally charged subject, so you must honor your feelings and respect your needs. It’s ok to set financial boundaries for what you want your financial landscape to look like. You’ll need to be comfortable setting those boundaries to achieve your financial goals.
NEVER LOAN MONEY TO FAMILY OR FRIENDS
When someone asks for financial assistance, tell them you have a policy of not lending money to family and friends, only gifting it to them. If you can’t afford to give money away, get creative about how else you might add value to their struggle.
Setting financial boundaries for yourself and others will help you achieve your financial goals much faster.
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