Have you ever had a friend, coworker, or family member who struggled to manage their money? No matter how hard they tried, they just couldn’t do what they needed to do to take care of the important things. I’m not talking about someone who is down on their luck. I’m talking about someone who has been begging you to help them out of a bind for the last 20 years. You want to help them, but you’re starting to feel like giving them money isn’t the best thing you could do. Here’s how to set financial boundaries so you can save your sanity, financial future, and relationship.
For many years I volunteered teaching life skills classes. One of the most challenging topics I taught was budgeting and personal finance. Money is a very emotionally charged topic and one wrong word could incite a fierce argument.
I didn’t particularly like teaching that class for that very reason. But I’ve seen how being intentional about personal finance can completely change someone’s life. Creating financial freedom changed every aspect of our life and I’m passionate about helping others do the same. I’m also a crazy person who loves a challenge so I kept teaching the class and eventually found a way to get my message across without starting a riot.
There wasn’t a single class where I didn’t hear a story about relationships destroyed by money. No wonder we have such strong emotions about the topic. It was always the same story. They lent someone a large chunk of cash and when they tried to get repaid, they never heard from them again. There were many variations of that story and I’m sure you have your own. I’m hoping that the things I share with you today will help you avoid a similar scenario in the future.
Families are Weird
I said that to a friend recently. Her response was, “families are weird.”
No two families are alike. Each family has its own unique culture and expectations. If I look at how my and my husband’s family of two operates, compared to my family of origin, then compared to the family he grew up in … well, you can’t even compare them. They all function so differently.
With that in mind, my goal is not to tell you what’s right for your family. Instead, I’m going to share a little bit about how we’ve dealt with family and financial matters.
What are Boundaries?
I love that boundaries is such a common topic these days. I believe they are the cornerstone of healthy relationships. That doesn’t mean they’re easy to articulate. But simply learning about boundaries is a great first step to building better connections.
So what are boundaries? I love Brené Brown’s simple definition: what’s okay and what’s not okay.
It’s up to each of us to define what is and is not okay for ourselves and our families. As a couple, Jer and I are a united front when it comes to our boundaries. The next step is learning to communicate these boundaries and hold others accountable.
I don’t know about you, but communicating boundaries is challenging for me. Rather than telling someone, “It hurts me when you talk to me like that.” I’d rather down a bottle of zinfandel and pretend to ignore it. And by pretend to ignore it I mean not saying anything to that person directly but complaining about it to Jer for the next week to 12 months.
That’s the thing about boundaries. If you’re not willing to communicate them and hold others accountable, you could spend your whole life poisoning yourself with resentment. If you have a situation that would benefit from stronger boundaries, I highly recommend learning more by reading a book like Boundaries by Dr. Henry Cloud.
Boundaries or Resentment?
Unless you clearly define what is and is not okay, you may be setting yourself up for resentment. This is especially true when it comes to families and even more so when money is involved. Here are three common causes of resentment.
1 – Expectations
My friend Ashley always says, “Unspoken expectations lead to premeditated resentments.” Can we just take a moment to give Ashley a virtual round of applause here?
This is one of the truest things I’ve ever heard and unfortunately something I’ve experienced hundreds of times. I’ve referenced my and my husband’s personality styles in so many posts and I have more fun examples coming next week. But as it pertains to expectations, Jer is a sweet peacekeeper who gives generously and is loved by everyone. This also means that he doesn’t always communicate what he needs.
I could care less about celebrating Christmas. My idea of a perfect holiday is hopping on a plane and going somewhere warm and spending Christmas on a beach eating tacos and drinking margaritas. Decorating and buying and wrapping gifts was unenjoyable work to me so each year I did a little less.
Then one day, it came to a head. By then I had two years under my belt of not putting up a single decoration. Then one Saturday in December when we were snowed in, Jer asked if I wanted to put up the Christmas tree. “Nah,” I responded, “then we’ll have to take it down in a couple of weeks and that’s just too much work” Apparently that was not the response he was looking for.
Sweet, kind, generous Jer was not happy. He said, “Thanks for ruining Christmas. It’s the one happy memory I have from my childhood and you had to go and ruin it.”
Um? Excuse me? We’ve been together for more than 15 years. Why is this the first time I’m hearing this?
Since then I’ve learned to play nice at Christmas. And learned to remind Jer that I can’t read his mind. While we’re not perfect, we’ve learned to communicate better and intend to keep improving.
We both laugh about this now which makes it a perfect example of what can happen in families when we’re not communicating our needs and desires.
I think we all know families who have dealt with resentment from unspoken expectations. This is especially true when money is involved. I’m sure we’ve all heard of blowouts during a reading of the will or splitting up an estate. Countless celebrities have complained about their families treating them like ATMs. And others feel slighted because they’re not getting their fair share.
All of this resentment could have been prevented by simply communicating our expectations. Better yet, learning to let them go altogether. You can’t control the expectations that family members have of you, but you can choose to let go of your expectations toward them.
2 – Manipulation
When our families, workplace, or friend group doesn’t have a culture that openly asks for what they need, manipulation can come into play. Manipulation is something that really bothers me. If you want me to do something, just ask. Don’t create some 20 step scheme to try to trick me into doing what you want. Even worse, don’t try and manipulate Jer because you know I’ll say no.
Some common forms of manipulation I’ve seen families use with one another are guilt, shame, threats, triangulation, lies, blame, and bribery. All of these behaviors are very toxic and you have the right and responsibility to set boundaries when they’re are being used on you. There may be tension in the moment, but being direct upfront will prevent future resentment.
3 – Lending
Last but not least, that classic example I shared earlier—lending.
Someone recently asked a friend of mine, “what are your three biggest regrets?” The first thing he said was lending money to his brother. He went on to explain that he’ll never see that money again and it didn’t fix the problem. Not only did he feel resentment toward his brother for not paying him back, but his brother also resented my friend for not continuing to bail him out.
This is such a common problem with family and friends. In the next section, I’m going to share some thoughts on avoiding this trap. But in my opinion, it’s best to not lend money to family and friends.
How to Prevent Resentment
So how do you honor your boundaries and avoid resentment?
Learn to get comfortable communicating your needs and let go of your expectations. And when it comes to lending—don’t do it!
If you want to help a family member, give, don’t lend. Give because you want to help them and believe in what they’re doing. Give without the expectation of getting anything in return. Give freely and joyfully, not because you feel guilty or manipulated.
When considering whether giving is the right choice, ask if it aligns with your values. If you are disciplined with money, would it challenge you to give to someone who spends frivolously and irresponsibly?
I know someone who loaned money to their father because he was having trouble covering his mortgage. The following weekend he took a trip out of town and dropped hundreds of dollars on hotels, restaurants, and bars for a pool tournament. As you can imagine, this created tension that rippled throughout the entire family.
One of our personal financial boundaries is that we don’t give money that supports unhealthy behaviors. If the family member in question has an issue with drugs, alcohol, gambling, or hoarding, we prefer to find other ways to help. Giving a hoarder money to buy more stuff hurts them more than it helps.
Helping Without Hurting
In situations where the money would be used in a way that is harmful to the individual, consider other ways you can help. Buy them groceries, bring them home-cooked meals, or a bag of clothing. Offer to help them better manage the resources they do have. Volunteer to help them create a budget or manage their bills and expenses. You could even offer to pay for a class to help them learn the skills they need to get back on track. There are so many wonderful and creative ways you can help.
And here’s a coaching pro tip. ALWAYS put the ball in their court when it comes to taking action. Ask them to send you an email with dates when you could schedule a sit-down to work on a budget. Have them gather statements and send you copies before you meet. If you’re buying them a course, have them sign up for the class and cut them a check upon receiving the receipt. Their action on the front end is a good indicator of future follow-through.
There are few subjects that are more complicated than relationships and finances. It’s safe to say that it’s something we will all encounter at some point in our lives. If not family, almost everyone has had that friend that never paid them back or took advantage of them.
Knowing how to communicate and stick to your boundaries will help you navigate these situations more easily. If you don’t feel good about a situation, you’re not obligated to do it, even if it’s family. It’s better to be direct and say no upfront than dealing with resentment that could fester for years.