Let’s Talk Boundaries: Finances
Boundaries are some of the most paramount survival tactics. And they revolve around every aspect of life, including finances. Remember that time when you unwillingly gave your friend your credit card. And you couldn’t fathom the countless transactions. Yet, a simple ‘no’ would have saved the day.
Most people lack financial boundaries. And it stems from the sensitivity of the topic about money. Hence, folks freely hand out loans to their partners, friends or family and end up messing with their financial stability. This problem can be solved by setting money boundaries and gently communicating them, however difficult that it may be.
What are Financial Boundaries?
Financial boundaries are rules set in place between yourself, the relationship with finances and your loved ones. Basically, what’s okay and what’s not okay, as defined by Brené Brown. Setting financial boundaries not only improves your finances but also your relationship with your loved ones.
Society shies away from discussing financial boundaries. And we can see why. Finances, in all aspects, can be a difficult conversation. If you are struggling in setting up financial boundaries, scroll below to learn 5 easy ways to implement boundaries, but still maintain a cordial relationship with your loved ones.
How to set up healthy financial boundaries
- Identifying your financial goals, and prioritize them
It is difficult to set up financial boundaries without identifying your goals first. For instance, if you have three streams of income without any saving or investing priorities, it is difficult to say no when a friend wants a soft loan. You have a substantial amount of money in the bank anyway, why would you say no?
Financial goals, whether saving, buying a house, paying off your mortgage, or investing in shares means your money is channeled to the right use before spending. While you may be left with a smaller amount to spend, you will be able to reinforce boundaries with yourself and your loved ones.
2. Communicate the money boundaries, gently
Most people, including myself, dread this process. Conversations about money, more so boundaries can ruin relations, whether with your friends, partner, or family. You can either choose to live complaining about individuals who take a financial toll on your life or communicate your limits.
A tip I learnt just a few months ago is to communicate gently. For instance, you can share your personal journey with your friends, talk about the huge amount of student loan debt that you need to pay, your saving tips, or show them that you are also cash strained.
Another tip is to help your friends make wiser financial decisions. For instance, if you notice that your friend spends lots of funds on take out, the latest fashion items, or unnecessary items, advise them to go slower on this. Help those who are unemployed find jobs and set them up for success.
Top Tip: Only loan money that you are willing to lose.
3. Set aside an amount for helping or lending people
The community around you may often be in need. And maintaining social equity is vital. Furthermore, you never know when you will be on the other side and will need a helping hand. Setting up a fixed amount for helping folks in need ensures that you stick to your budget. When this amount gets exhausted, let your friends know that you are not in a position to help.
4. Set up the people around you for success
It gets lonely up there. You have probably heard of this phrase from billionaires. Succeeding alone among your group of friends and family is never the ideal situation. Once you start getting better financially, set up the people around you for success.
These can be small steps such as helping your parents set up a retirement plan, equipping your siblings with better saving habits, and helping your friends get jobs, where possible. These steps can help your loved ones attain financial independence and reduce overreliance on your funds.
5. Expect resistance, and stand your ground
All living beings dislike change. High chances are — you will experience resistance when setting up financial boundaries. Some people will think that you are proud, mean, and unhelpful. Note that failing to stand your ground is a leeway to grow these bad habits. Once your loved ones realize that you are unshaken, they will respect your boundaries and work on their financial stability.
What about the people who knowingly take advantage of your willingness to help? Do not be afraid to lose them.
Bottomline
We hope these tips help you enforce healthy financial boundaries. A part of making good financial decisions is investing, rather than having money lying in your bank. If you are unsure how to go about investing, talking to a financial consultant who is knowledgeable in the preferred sector will safeguard you from making costly investment mistakes.
