How to Set Financial Boundaries

By: carla January 11, 2023 no comments

How to Set Financial Boundaries

Financial boundaries are the limits you set for your money. In some cases, financial boundaries are those you set for yourself. In other cases, they might be boundaries you set between yourself and others.

While setting boundaries around money can sometimes be a daunting task, doing so can put you on the right path to financial wellness.

Why Are Financial Boundaries Important?

Setting financial boundaries is important for a variety of reasons. First, it helps prevent the people in your life from taking advantage of you. When your family and friends have no limits when it comes to money, they’re more likely to ask for financial support.

Setting healthy limits is also important for your personal financial success. You may currently have a responsible financial plan in place. However, if you’re constantly deviating from that plan to make impulse purchases or help loved ones, that plan must not be fitting your needs and you may not be making much progress towards your financial goals.

How to Set Healthy Boundaries for your Finances?

Sit Down with Yourself to draw out your personal Financial Map

These are the limits you set for yourself when it comes to your own spending and saving. This could include setting a budget, limiting your credit card use, or automating your savings. Establishing these boundaries will help you stay on track with your financial goals and prevent you from overspending.

In this regard, this gets us to the second point, equally important.

Communicate your boundaries to others-and be Assertive!

It’s important to communicate your financial boundaries to those around you, including family, friends, and partners. This could include setting limits on how much you’re willing to lend or give, or setting expectations around shared expenses. Having these conversations upfront can prevent misunderstandings and financial stress down the line. In addition to this, being assertive is key when setting financial boundaries. You need to be clear about what you’re doing and why. This may help others understand and respect your decision.

Put Your Own Needs First- when possible

Everything in life is a balance: we give, and we take some. I always tell my clients, like the cycles of life, you cannot continue to give if you don’t’ receive a little. So, you have the right to put your own needs first. And you have the right to take control of your finances. You have the right to say no when family members ask you for money.

Set realistic limits

It’s essential to be realistic when setting financial boundaries. If you’re constantly being asked for money, you may need to limit how much you’re paying to give each month. You may also limit the number of times you’ll go out to eat or drink with others. Remember, you don’t have to justify your limits to anyone.

Offer non-financial help

Just because you can’t or won’t help someone financially doesn’t mean you can’t provide another type of support. If supporting friends and family is important to you, look for other ways to do it. You can show up more often with some groceries, or physically be more present during needed times. Make yourself available more often, not your pockets!

Avoid being pulled into arguments about money

Arguments about money can be tricky to avoid. Family and friends may try to convince you that their financial situation is different from what you perceive. They may also try to downplay their income or spending habits. If you find yourself in an argument about money, stay calm and focused on your own financial goals.

Be consistent

Setting financial boundaries is only effective if you stick to them. This means being consistent in your spending and saving habits, and communicating your boundaries clearly and consistently to others.

Reassess and adjust as needed

Your financial goals and circumstances may change over time, so it’s important to reassess your boundaries regularly and adjust them as needed. This could mean revising your budget, setting new savings goals, or renegotiating shared expenses with others.

Setting financial boundaries can be challenging, but it’s an important step in taking control of your finances and achieving your financial goals. By identifying your goals, establishing personal boundaries, communicating with others, being consistent, and reassessing regularly, you can build a strong foundation for your financial future.

Ask for Help Setting Money Boundaries

When all of the above fails, I help my clients reassess the ‘why’ behind their inability to stick to their financial plan. We may find sometimes that we get stuck in habits (yes, even when it comes to money!) that are serving a certain purpose: Are you drowning your emotions with unnecessary spending? Are you trying to avoid conflict by helping others financially? Or maybe trying to gain other’s approval?

Pinpointing the driving force behind our financial behavior, setting financial boundaries while avoiding the guilt and feeling good about it is possible!

With the right therapy or guidance, you can slowly put yourself back on track. Reach out to Dr. Carla  to set a time and talk.



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