Your inability to say no to financial requests from friends and families, or turn down social obligations can result in a heavy financial strain according to Wells Fargo in his report which says that 63% of adults in the US face major money stress.
Hence, to maintain your sanity and relationship with friends and families, it is important to set financial boundaries, letting your families and friends know that your relationship with them does not transcend your financial boundaries.
Therefore, in this article you will learn how to set financial boundaries with friends and families without hurting your relationship.
1. Set a Spending Limit for Occasions Involving Families and Friends
Sometimes a family member or friend can coerce you into spending more than you intend to. This can force you to develop resentments towards such a person.
To avoid such, you should stand on your ground by setting clear financial boundaries.
For example, when dining out with a loved one or group of friends, talk about splitting the bill or take turns to pay rather than accepting to offset the bill alone even when it is obvious that you can do it.
Also, when it comes to donating to charity, helping a family or a friend in need, it is ideal that you set aside a certain percentage of your income you’re comfortable with for helping families and friends or donating for a charitable cause.
Read Also: 7 Reasons you’re Always Broke
2. Give Your Financial Goals the Utmost Priority
Always realize that you’re the ‘number one person;’ hence, your financial goals and objectives are your first priority.
You should set and stick to your financial goals to give you a sense of direction and also cut down on unnecessary spending and granting financial requests from families and friends.
Having clear financial goals makes it easier to turn down unnecessary requests like going for expensive trips, buying expensive gifts or donating generously beyond your financial capacity; you can easily explain that you would have loved to participate in the trip or donation, but you’re trying to meet up with your goal of down payment for your home, pay off debt, or save for a child’s school fees.
As such, participating in the trip or occasion will prevent you from meeting up with your goals within a set time frame, or overshoot your expenses beyond what you can bear.
Making your financial goals your priority and expressing your commitment by communicating your goals clearly to families and friends is one way of setting boundaries around your finances without hurting their feelings.
Read Also: How to Set Financial Boundaries in a Romantic Relationship
3. Learn To Say No Politely Without Hurting the Feelings of Your Friends and Families
Saying no to requests and demands from friends and families can hurt their feelings and also strain your relationship with them.
As such, you should learn to turn down requests from friends and families graciously in a way that will prevent them from feeling hurt or embarrassed.
When friends and families make financial requests, appreciate them for considering you as a source of help and let them know that you value your relationship with them, but you wouldn’t be able to grant their requests due to limited resources and your desire to meet up with your financial goals which are very crucial at the moment for obvious reasons.
You may not want to discuss your goals with your friends and families, but it is important to give them valid reasons for not being able to grant their requests at the moment.
If you’ve been invited for an expensive hangout which you also have to contribute financially, try providing low-cost, budget friendly alternatives like choosing a friend’s place and have each friend prepare a meal or drink rather than buying.
Hence, it is important to look out for cheaper alternatives. This way, you’re able to hangout without any major impact on your savings.
Not to be a lone wolf, it is important that you carry your families and friends along, let them know the importance of setting financial goals and also cutting down on expenses to achieve their goals.
That way, they don’t get to bug you with financial requests or ask that you spend money on expensive trips and vacations, and they are more likely to provide the support you need to achieve your desired goals.
Read Also: 10 Financial Habits That Will Make You Wealthy
4. Avoid Lending Money to Families and Friends
According to creditcards.com, many who loan out money to friends and families don’t get repayment from them, leading to damaged relationship, and arguments or fights.
With the negative consequences that arise from lending money to friends and families, it is important to set clear boundaries on lending money to maintain your relationship and peaceful coexistent with your friends and families.
When a family member or friend makes a loan request, politely turn down such request for the sake of the wellbeing of your relationship with them.
However, there are instances where a loan request cannot be turned down due to the urgency or the genuineness of the need.
As such, it is important that you loan out only the amount of money you can afford to lose should in case you did not get a repayment in due time.
Having a written agreement stating the loan amount and the repayment term is very essential to motivate payback before or by the expiration of the loan term.
Alternatively, you can offer non-financial support like giving advice, helping your friends and families to find other sources, and also suggesting programs that can help their financial situations.
Read Also: 7 Signs that you’re Financially Smart
5. Avoid Co-Signing Loans
Standing in as a referral, or co-signing a loan can be dangerous to your financial health due to the apparent negative impact it can have on your credit rating and reputation as a person should the collector fails to stick to the loan term and condition.
Therefore, it is important that you politely turn down requests to co-sign a loan or stand as a referral.
Read Also: 8 Spending Habits You Should Imbibe When Passing Through Financial Crisis
Conclusion
Setting financial boundary is important in maintaining healthy relationships with friends and families.
By being firm with your resolve, and communicating clearly your financial boundary, you will enjoy stable finances, prevent guilt feelings that may arise from turning down financial requests, build your relationship, and make your friends and families become financially independent.
