How to Set & Communicate Your Financial Boundaries
As if your own relationship with money isn’t complicated enough, making decisions that involve money and other people adds a whole new dimension. That’s where financial boundaries come into play.
What is a financial boundary?
A financial boundary is a limit you set to protect your financial health and well-being. Financial boundaries can be personal, like a budget, or interpersonal, like how you split a check with friends. Setting financial boundaries allows you to prioritize your goals and values. It is a form of putting your own oxygen mask on first and then helping others. Having financial boundaries can also help strengthen your relationships by reducing resentment.
How to set a financial boundary
The first step is to recognize where you need to create financial boundaries. Think about situations in which you felt pressured to say yes to something that put a strain on your finances. Common situations include:
Picking up a tab or splitting a meal evenly when you purposely ordered a less expensive meal
Agreeing to be in or attend a wedding
Going on a vacation with friends
Lending money or covering bills
Splitting expenses with a partner
In retrospect, what would you have done differently in that situation? Use that as a guide for setting your financial boundaries.
How to communicate a financial boundary
Once you’ve set a financial boundary, there will come a time when you need to communicate about it to someone in your life.
Bring it up early
If you are setting a new boundary, try to communicate about it in advance of the situation if possible. For example, when a friend who likes to split uneven dining bills invites you to dinner, you can say, “I’d love to go but I’m trying to be intentional about my spending. Do you mind if we do separate checks?” Doing this will ensure that no one is surprised by a change.
Give yourself time
When someone asks you to make a commitment that involves money, tell them that you need to consult your budget and you’ll get back to them. This will indicate that you take their request seriously but still give you the necessary space to evaluate your own priorities before making a decision.
Be clear about what you can do
Setting a boundary doesn’t necessarily involve a blanket “no.” For example, if a family member asks for $1,000 and you genuinely want to help, you can tell them that $1,000 doesn’t fit in your budget but name an amount that does and you feel comfortable giving away.
How to be mindful of other people’s financial boundaries
Communicating about your financial boundaries gives your friends and family permission to do the same. There are a few steps you can take to be mindful of their financial boundaries:
Don’t make assumptions
It’s natural to draw conclusions about the health of someone else’s finances based on their job, house, car, clothes, and spending habits. This might lead you to assume they can pick up the bill or that you need to cover for them, but you almost never have the full picture of their financial situation.
Be clear about costs
Give others as much information as you can about costs they won’t have control over. For example, if you are inviting a friend to be in your wedding, let them know the range of what they could expect to pay for their bridesmaid dress/suit and the bachelor or bachelorette party.
Final Thoughts
Setting financial boundaries is in everyone’s interest. It prevents resentment from growing in your relationships and it means that when you do say yes, you are doing it from a place of true desire and generosity while honoring your own needs.
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