Even if you love your friends and family, have you ever considered the impact other people have on your finances? Some of them might be a real hazard to your financial health.
It’s time to take a look at your relationships and learn to recognize the signs as well as how to set financial boundaries with friends and family without feeling lousy.
Be on the lookout for these situations:
1. The dealmaker. This person is full of great ideas that seem worthy of a small investment. Unfortunately, having great ideas and executing them are different skills. Avoid investing money that you’re unlikely to see again. Solution: Let the future Donald Trump know that you’re uncomfortable investing in a business that isn’t even off the ground yet.
2. The partier. The partier barely needs an excuse to celebrate. Cleaning out the closet is a good enough reason to head out on the town and drag you along for the ride. Solution: Show up for the celebration, but keep your expenditures limited. Another alternative is to say, “Thanks, but I have other plans.”
3. The charity case. This person is constantly collecting money for worthy causes. Solution: If you don’t have money for the cause, assist with your time or let them know that you can’t contribute to every cause. Support charities that are close to your own heart and decline the rest.
4. The fancy gift giver. Exchanging presents of modest value with our friends and family is not possible with the person who goes overboard and spends way too much money. By way of guilt, you’re forced to reciprocate and blow your gift-giving budget. Solution: Suggest a dollar amount limit or let them know you’re uncomfortable with such extravagant gifts.
5. The encourager. Have you ever been torn between the option of spending a lot of money on an item and keeping the money in your bank account? The encourager always seems to talk you into buying that item you want, but don’t need. All the while, they think they’re doing you a big favor. Solution: Keep your shopping dilemmas to yourself.
6. The 5 star indulger. Your budget might call for a movie rental and a frozen pizza, but your friend doesn’t want any part of frugality and is all about luxury. It’s embarrassing to say “no” all the time. Solution: Be honest and let your friend know you have a plan that you follow and right now, you don’t have room to go beyond the amounts that you’ve set.
7. The moocher. This person can play the victim, borrows your things and never brings them back, and needs money for a variety of reasons. Solution: Set boundaries and just say no. Understand there are other ways to be supportive than financially bailing someone out.
8. The know it all. Is there someone in your life that goes beyond offering advice with good intentions and is trying to control your financial decisions? If anyone belittles you for your financial knowledge, seems to judge your decisions, or is regularly warning you of doomsday scenarios, it’s time to take back your power. What works for them may not be appropriate for you. Not to mention, that in some cases, these scenarios can lead to financial abuse or dependency. If you feel you can not speak frankly about how you feel, you may need to engage a third-party intermediary like a financial advisor or counselor.
The key to dealing with people that exhibit these tendencies is clear communication. In every instance, you can let the person know that you choose to use your money in a different way. The conversation might feel awkward, but the awkwardness is over quickly if you let them know this is difficult for you and you do not want to offend them. You do not need to attack them to maintain control of your situation. The approach is to be assertive, not aggressive. Stick up for yourself and be back in charge of your money.