You might need to have some tough conversations with your family and friends about financial boundaries. Our inability to set boundaries puts us at risk of encountering a financial frenemy. To avoid a financial frenemy, you have to be clear on your financial boundaries and know who to look out for.
Be on the lookout for these folks:
The struggling businessman or woman. 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 business mogul know that you’re uncomfortable investing in a business that isn’t even off the ground yet.
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. It is not wrong with a good time but this may be a burden on your finances.
Solution: Show up for the celebration, but keep your expenditures limited.
The charity case. This person is continually collecting money for worthy causes. Again, nothing wrong with wanting to support a cause, but don’t need to run a campaign to raise a dollar for every step an ant takes, do we?
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.
The fancy gift giver.Most of us exchange presents of a moderate value with our friends and family. This person 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—opt-out of gift-giving. I only buy gifts for children and extremely close friends/relatives and exceptional reasons. Also, consider gifts of non-monetary value.
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 it. All the while, they think they’re doing you a big favor.
Solution: Keep your shopping dilemmas to yourself.
The wealthy friend. Your budget might call for a movie rental and a frozen pizza, but the wealthy friend doesn’t want any part of frugality. She likes to go to the expensive wine bar and eat the fancy sushi that runs $200 per pound. It’s embarrassing to say “no” all the time.
Solution: Be honest and let your friend know her tastes are simply out of your budget. As friends, you both can come up with a few fun and budget-friendly activities.
The moocher. This person eats the food out of your refrigerator, borrows your tools, never brings them back, and always needs $5 for various reasons.
Solution: Say, no.
The key to dealing with all of these people is communication. In every instance, you can choose to let the person know that you either don’t have the money to spend or that you’d prefer to keep your money in your bank account. The conversation might be awkward, but the awkwardness is over quickly.
Avoid allowing your friends and family to drag down your finances. Stick up for yourself and be back in charge of your money.