How to Set Boundaries With People Who are Draining You Financially
Let’s face it. Navigating money with family and friends can be awkward — even awful. That’s because money is about all kinds of currency, and, often, about the inequality that shadows it...It’s the currency of who has and who has-not; about power, privilege, options and opportunity, as well as its opposites. Still, even while we may have had to learn the hard way how to manage our money responsibly, we may still find the downward pull of financially less-responsible relatives and friends. Here, then, is how to set healthy boundaries when you need some space from those who are taxing you financially.
Why money complicates relationshipsIn the same vein of “mixing business with pleasure,” mixing money with family dynamics complicates things. When a family member asks you for money, it divides what ought to be an even playing field (at least ideally) into two camps: Lender and the Indebted or Giver and the Receiver. As much as you may not want to look at things this way, this interaction colours the relationship that follows (particularly when this is a long-standing relationship dynamic). One has, the other has not. Period.
This gets even messier when the person seeking the cash is notoriously bad with money, for whatever reason, be it lack of financial literacy, addiction (shopping or otherwise), or anything else. Or, alternately, the person who has the money is perceived by family to have come to it through no merit of their own, such as privilege or luck. (See? We said it was complicated.)
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Why setting boundaries is importantHowever you may have come to be the person setting the boundaries, know that boundaries are healthy and that you don’t have to honour every ask, or to enable others’ poor decision-making. Establish clear expectations early and often, and be willing to sit in the discomfort of saying “no.”
People’s relationships with money and debt are personal and subjective, and each person’s comfort with these varies. It’s OK to honour your comfort here.
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Feel out the situationIn the same vein, if you’re considering lending, and are in a financially secure enough position to do so, ask questions to learn more. Get experts involved, if necessary. Ultimately though, trust your gut instinct. If you don’t feel right about the situation or the asks don’t align with your values, don’t do it. You aren’t obliged to lend — no, not even to family.
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Communicate your money values and goalsIf warranted (though you don’t necessarily owe everyone an explanation), explain that you have your own goals that you are working towards and that you have to be very intentional about your spending and finances.
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Anticipate the loaded times of the yearIt’s true — some times of the year are more loaded with potential when it comes to being asked to lend or give (or to spend more than you are comfortable with — weddings and lengthy invitation lists are notorious for this). Reflect on your own situation, and note any peak times when you are likelier to get the asks (holidays, birthdays, family functions, weddings, etc.). Prep your response in advance, accordingly.
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Be blunt if you have to beSimilarly, if the person or people aren’t respecting your stated answer, say that you simply don’t have a budget for their ask. Period. No further explanation or justification is required. Your finances, your business. And if the people in question don’t take issue with putting you in this uncomfortable position, then you similarly shouldn’t feel bad about asserting this comfort zone.
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Anticipate resistanceEasier said than done, of course. As most feeling individuals, you may second guess this hardline response and feel guilty — that’s OK. Saying no, pushing back, and asserting ourselves isn’t easy, especially when we’ve been conditioned to people-please, share our toys, and be a good little girl or boy. The person asking may even expressly be guilt-tripping you. In this case, outline that you will end the conversation every time they contact you for this reason, and follow through on this simple consequence each time this boundary is breached.
You may even feel that you’ll lose the relationship unless you comply with their demands. Still, it warrants stating that if this is what breaks the relationship, it’s likely that its foundation was based on the dynamic of lose-win...in their favour. And is that really fair over the long-run? Lastly, you can only control your own emotions, the rest is on them and their own work.
Add a bufferIf you (often) feel ambushed and overwhelmed in these types of situations, you may want to consider adding a technological buffer and addressing your concerns this way. And use email, not text...as text messaging can frequently shift to a blown out instant argument (with none of the body language or physical cues of an in-person convo). State that this is your preferred way of talking about the issue as it gives you a chance to be more thoughtful in your response and to more fully express where you stand. If the individual calls you immediately upon receipt of the email — and this is critical — don’t pick up! You will likely be drawn into the very type of conversation you were trying to avoid. This is about boundaries, so don’t cede your ground, despite how hard the other person may be trying to impose on it.
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If you want to give, gift don’t lendIf the ask does align with your values, and you can afford it, consider it a gift, not a loan. This way you eliminate expectation, and the likely prospect of disappointment. That said, establish clear rationale for why this is the exception to the rule. Understand that you will most likely never see this cash again, and if you are OK with this, then gift it knowing you supported a good cause (following extensive research on your part).
Offer other ways to be supportiveLastly, remember that not all support needs to be financial. You can say that even though you may not be able to lend money, you are more than happy to support their journey in other ways (be it lending an ear or even paying for a class that develops the skill they recognize they need to work on, such as financial literacy). Key note here: place accountability and next steps on the individual, and don’t hand over credit card info or cash, even for an agreed-upon registration. That money may not end up where you want it to go, especially in instances where addiction plays a factor. Complete the transaction yourself.
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