Setting boundaries is a key part of living a happy, healthy life. Boundaries can help you to build stronger and more fulfilling relationships, find rest when you need it, protect yourself emotionally and mentally, and grow your self-awareness.

One area of our lives that we’re not always great about setting boundaries with is our finances. It’s easy to allow others to overstep financial boundaries because talking about money (or saying no to people who ask for it) can be uncomfortable. It can also be easy to ignore our own financial boundaries, and we end up making mistakes with our money that hurt our goals in the long run.

Set Better Money Boundaries With Others

44% of Americans struggle to talk about money. In a world where it often feels like no topic is off limits, we still feel awkward trying to talk about our personal finances with the people around us. Unfortunately, our inability to talk about money makes it challenging to set healthy financial boundaries with family, friends, and colleagues. To start setting better money boundaries with the people in your life, you need to know the types of people who are going to try to undermine your boundaries, create a financial strategy, and start communicating honestly about your goals.

Understand Your Financial Frenemies

You’ve probably heard of “frenemies” before. They’re people who you’re friendly with, even if you dislike them, or have some kind of rivalry going on. In my book, Work Your Wealth, I talk about the six kinds of financial frenemies you might run into:

1. The Entitled Frenemy. “Can you pick up the tab? Just this one time!”
2. The Budget-Buster. “You should buy it – treat yourself!”
3. The One-Upper. “You got a $100 gift card as a holiday gift from work? Nice. I got a $10,000 raise during my annual review.”
4. The Priers. “How much do you make? How much did that cost you?”
5. The Green-Eyed Monster. “Must be nice that you can afford such a big house.”
6. The FOMO Frenemy. “You can spend your money just this once!”

Knowing who these people are and being able to spot them when they start to overstep can help you honor the boundaries you’ve already set for yourself. Get comfortable saying “no” to these people – even if your financial “frenemies” are people who are close to you. Being honest and telling them that you’re uncomfortable with their request, or that you don’t want to discuss finances with them, can save you a lot of future headaches (even if it feels awkward in the moment).

Have a Strategy for Supporting Family or Friends

Do you have family members or friends who consistently ask you for money? Even if you don’t have the money to give, it can be uncomfortable to say no – especially if the person asking is someone close to you. There are a few different ways you can set boundaries in this situation:

1. Look at the money you give as a gift – not a loan. You’ll end up driving yourself crazy wondering when your Aunt Linda is going to pay you back, which will damage your relationship and make you second-guess giving in the first place.
2. Work the expense into your budget. How can you adjust your budget so that you can start putting aside a small amount of money each month in an account earmarked for giving? Remember – a small amount is key. You’re not sacrificing your own goals to support friends and family. You’re finding a way to put a predetermined amount of money aside each month so that it’s there if and when you need it.
3. Make expectations for the future clear. It’s okay to tell someone that you’re happy to give them money now, but that you won’t be able to in the future. Make it clear that your choice to support them right now doesn’t mean that they get to come back to you for money over and over again.
4. When in doubt – say no. You don’t need a reason to say “no” to giving someone else your money. If you need to blame it on your financial planner, do that. Seriously. I always tell my clients to just tell people it’s my fault they’re saying no to something. Just know that you don’t owe anyone an explanation for why you can or can’t support them financially.

Be Honest About Your Goals

The best way to set money boundaries with others is to be clear about what your goals are. When you’re open and honest about what you’re working toward, you’re less likely to feel like you need to justify your financial boundaries. Whether you’re saving up to go on a big trip with your spouse or partner, or are determined to max out your retirement savings this year – let people know!

Goals empower you to set clear and healthy financial boundaries with the people around you. They might even inspire your tribe to start setting some exciting financial goals for themselves!

Set Better Money Boundaries With Yourself

Setting money boundaries with others can be challenging, but setting money boundaries with yourself can be even more difficult.

Keep Your Budget Firm But Flexible

Setting a budget can help you set clear boundaries around your spending. However, most people wind up creating a budget with too many restrictions.

Your life doesn’t always fit neatly into defined budget categories. When you try to track every dollar and cent that’s spent and hold yourself to an impossible budgeting standard, you’re more likely to burn out and fall off the wagon.

Instead, try following these steps for creating a firm, but flexible, budget that will help you stick to your money boundaries:

1. Know how much money is coming in.
2. Pay yourself first by automating contributions to savings, or for other specific goals – like debt repayment.
3. Know how much money is left after paying yourself.
4. Make sure your fixed expenses are covered with that amount of money.
5. Spend the rest on whatever you want.

In this budget example, you have a few “firm” budgeting boundaries. You know how much you’re paying yourself, you know what fixed expenses need to be covered, and you know what you have left to spend.

When making spending decisions, you know how much you have for the rest of the month. You have the flexibility to spend those funds in any way you choose. This helps give you the freedom to make spending choices that might differ month-to-month, but you’re never sacrificing your financial goals or pushing your own boundaries.

Put Systems in Place to Avoid Getting Off Track

When it comes to setting money boundaries with yourself, automation is your friend. Looking at the budgeting example above, you can automate:

1. Your savings.
2. Your debt repayment.
3. Contributions to other financial goals.
4. Your bills for fixed or recurring expenses.

When money is automatically withdrawn to cover these parts of your budget, you’re automatically setting a boundary for yourself. You’re only able to spend the cash you have left over and you’re living comfortably within your own financial boundaries.

Be Honest With Yourself

It’s not fun to admit when you’ve made a financial mistake. When you ignore your own financial boundaries, you need to be honest with yourself about what’s going on – and why it isn’t healthy. For example, let’s say you’re doing a great job of sticking to your automated budget. You’re saving, covering all of your bills, and happily spending what’s left each month. Then, an opportunity comes up – an incredible last minute trip with your kids. So, you break out the credit card and go for it, even though you know that you’re working toward becoming debt free.

Nobody’s perfect. Everyone makes mistakes. Hiding those mistakes from yourself is only going to enable you to continue making them. When you cross your own boundaries, you need to reflect honestly – and without judgment. Ask yourself these questions:

1. What caused you to overstep the boundary you had set for yourself?
2. How can you get back on course?
3. What additional steps can you take to make sure it doesn’t happen again?

If you can’t be honest about your money boundaries (and when you’ve ignored them) with yourself, you won’t be able to set healthy financial boundaries with others either.

Get Help Setting Financial Boundaries

Setting financial boundaries can be tough work! Working with a financial planner to clarify your goals and set money boundaries that support those goals can help. Your financial planner acts as your accountability partner, coach, sounding board, and strategist. They can help you to create comfortable money boundaries for your own life and help you communicate them clearly to the people around you.

Want to learn more about setting money boundaries? Wondering how a financial planner can help? Contact us today! We’d love to talk about your money boundaries, and how you can start sticking with them.