How to Set Healthy Financial Boundaries with Friends and Family

There you are, you just got your first salary, and you’re pretty excited. “Finally I can get to pay for all those goals that I have been dreaming about!” you say to yourself.

But then, there’s a bit of a conflict of interest that you have. Mum wants a cut of the money, she says it would feel good to buy herself a couple of things with her child’s money. Your friend Joan is asking for 2k urgently, despite her not having paid the last amount of money you lent her.

“I promise I’ll pay back everything as soon as I get paid,” she tells you. She also happened to say that last time and here we are. Your aunt is also asking for money, on the grounds that she helped raise you and it’s time for you to ‘pay back’. Uncle Martin has also been asking you to ‘gift’ him some money so that he can go out and enjoy himself with friends.

If you say yes, you are barely going to be able to do anything for yourself with the money. But then again if you say no, you risk all those people being upset with you and feeling guilty about it. What to do?

This is where money boundaries come into play. But what are money boundaries, why is it so important for you to have them and how can I go about setting them? Read on to find out!

What are Boundaries?

Boundaries are guidelines, limits, or personal rules that individuals establish to protect their physical, emotional, mental, and social well-being and in this case, financial well-being. These boundaries are designed to protect your financial well-being, maintain healthy relationships, and ensure you are not taken advantage of financially.

Financial boundaries can cover a wide range of areas, including lending money, sharing expenses, giving financial advice, and discussing personal financial details.

It’s important to remember that boundaries are not rigid walls; they are flexible and evolve over time as your circumstances change or as you grow personally.

Healthy boundaries also involve respecting the boundaries set by others. By doing so, you promote mutual understanding and create an environment where everyone’s well-being is considered and respected.

Why should I set Financial Boundaries?

Not only can setting boundaries help protect your finances, but it can also help protect the relationship you may have between you and your friends and family. However, I have to admit it, some relationships are unsalvagable.

Setting boundaries doesn’t mean you care any less about your friends and family. It means that you want to maintain healthy relationships based on trust, respect, and understanding. By being clear about your financial boundaries and communicating them effectively, you can foster healthier and more supportive relationships, and isn’t that all that we want?

How to Set The Money Boundaries

Now we come to the meat of the article, how to put those boundaries in place.

1. Get Some Groundwork Done

Before we get to the setting the boundary part, we have to do a bit of introspection by asking ourselves some questions.

• How much income do you have? What to you feels like too much of a stretch to you financially?
• What financial goals are you working towards? How urgent are they and how much are you setting aside for them on a monthly, weekly, or daily basis?

These two questions will help you figure out where you are financially and what your priorities are at the moment. Knowing this will help you set better financial boundaries.

Getting to know where you are financially, will help inform the next set of questions, your limitations.

• How much are you able to lend a friend if they ask for money?
• Which friends can you lend money and expect to receive it back?
• How much are you able to give your family members?

Lending money to friends or giving family members money isn’t a bad thing. However, it should not be a reason for you to be broke and barely have enough money for your needs.

There are some friends who you may have given money in the past and they have given it back to you and there are some, like Joan, who haven’t quite paid you back and keep taking you in circles.

With type of friends A, who has a good credit history, when you have the money you can lend them, go ahead and lend as you are assured that you will get it back. But with friends type B, the best way to go about it is to clearly communicate to them and share with them that you are not in a place to. We shall speak more about communication in the next subheading.

When it comes to family, it is a pretty delicate topic due to the negativity that surrounds it and the ‘black tax’. But then again you can own this whole situation and set boundaries of how far you are willing to go and then communicate them to your mom, dad, and other relatives respectfully.

2. Communicate Your Boundaries

This is pretty much the make or break of the process of trying to balance your relationships with money. Let’s put this into perspective.

Joan borrows your money. You are already frustrated because she has already borrowed you money twice before and she hasn’t paid back and it feels that she’s taking advantage of you financially. So in response, you bring that up, harshly, telling her how she is such a bad friend and how she just wants money from you.

Or you can own the narrative and realize that Joan isn’t the friend who returns the money, it angers you, but it isn’t the reason for you to be disrespectful. You also realize that this isn’t the time to bring up the other two debts. You then respond to her and tell her that you do empathize with her situation, but you’re not quite in a place to lend her money.

When it comes to your family, tell them that this is the much that you can be able to do in terms of family responsibilities. If you are not able to buy Mum or Dad a gift each time you get paid, you can just tell them that you may not be able to buy them a gift each time but when you do have money, you will buy them a gift.

3. Offer Help in a Way That Feels Comfortable to You

Unable to attend girls' night because you are trying to save some money? It s alright, just communicate with your girls and offer another way you can get to hang out with them that isn’t too much of a stretch to you.

On the flip side, offering help to friends and family doesn’t always have to involve providing financial assistance, especially when it comes to respecting money boundaries. Here are some alternative ways to support and help your loved ones without directly offering money:

• Emotional Support: Sometimes, all someone needs is a listening ear or a shoulder to lean on. Offer emotional support by being there to listen, understand, and empathize with their challenges or concerns related to money matters.
• Practical Advice: If you have experience or knowledge in budgeting, saving, or financial planning, offer practical advice to your friends and family. Share tips and strategies they can implement to improve their financial situation.
• Gift Thoughtfully: Instead of giving cash, give thoughtful gifts or experiences that align with their interests and needs.
• Networking and Opportunities: If you have a professional network, be open to introducing your friends and family to potential job opportunities or connections that could improve their financial prospects.
• Celebrate Non-Monetary Success: Celebrate their achievements and milestones, whether it’s paying off debt, getting a raise, or sticking to a budget. Recognition and support for their financial efforts can be incredibly motivating.

In the intricate web of human relationships, the ties that bind us to friends and family are among the most significant and cherished. These connections offer support, understanding, and shared memories that enrich our lives.

However, when it comes to money matters, navigating these relationships can sometimes be a complex task. The topic of setting financial boundaries with friends and family is one that requires delicacy, open communication, and a keen awareness of the impact it can have on the dynamics within these treasured relationships.