Boundaries are essential in all aspects of life, and your finances are no exception. Setting boundaries in financial affairs protects your money, relationships, and mental health. But do you know how we should do this demarcation? In this article, we have told you everything you need to know.
What is differentiation, and why is it important?
Boundaries are the limits we set for ourselves, and we have different types of boundaries, including emotional and physical. Of course, there is another critical distinction in life: boundary in financial affairs. This boundary is sometimes done for yourself and, at other times, between you and others.
Of course, people may have a wrong idea about borders and demarcation. Elizabeth Earnshaw, a psychologist, says about this: “Boundaries are created when you need them and at the same time can talk about them with others. For example, whether you consider a behavior appropriate or not or how you react to the behavior of others. We all have red lines that show our boundaries, and we have seen these boundaries violated many times. Of course, it must be said that most people don’t intend to infringe on our borders; they don’t know enough about the limits we have set. We do not adequately discuss the boundaries and limitations we need with those around us.
This problem occurs most of the time regarding financial issues. For example, when you go to a restaurant with friends for dinner, you may have to spend more than you expected, or you may have allowed others to borrow money from you many times, or you may have made wrong or different calculations in advance regarding the expenses of a group experience (such as a trip).
All these things violate your financial boundaries. Therefore, to understand your financial situation and others who care about it, you must adequately distinguish your financial affairs.
When and how do we set boundaries for our finances?
In the past, even as recently as 20 years ago, talking about money was taboo and considered inappropriate behavior. But these days, people are more inclined to talk about money because of their financial worries. For this reason, it has probably become more accessible to converse honestly about boundaries in economic affairs. However, if you want to know how to limit your finances, pay attention to the following points.
1. Set clear financial goals
Goal setting is one of the most important measures to determine healthy financial boundaries. First, you should pay attention to your unique needs so that it is not difficult to set boundaries. If you don’t give yourself a good reason, you may not be motivated enough to set financial limits. For example, if saving money is your economic priority this year, you will make economic boundaries much more accessible and save on your expenses.
These financial goals include paying your life insurance premiums, health insurance, house payments, or debts. In addition, set short-term, medium-term, and long-term financial goals for yourself to achieve your big financial goals by taking small steps.
2. Budget your money and share it with others
Regardless of your financial goals, you should have a proper budget for your money and financial resources. For example, depending on your money, where can you go and what purchases can you make? This allows you to control your economic behavior and have healthy boundaries in your financial affairs.
At the same time, raise these boundaries with the people you are in contact with. For example, if you are going out to dinner with your friends, tell them how much you can spend before the date. That way, your friends won’t choose an expensive restaurant; if they do, they won’t expect you to pay more than you can afford.
Of course, remember that this distinction in your expenses is related to you, and you cannot coordinate your surroundings with your boundaries. Setting boundaries is for what you do in certain situations, such as the cost you want to spend on a group trip or buying a gift for someone. You cannot control the behavior of others, and you only have the authority to behave yourself regarding your finances.
3. Prioritize your financial goals
When setting boundaries in financial affairs, consider essential priorities. Determine your financial goals first, then restrict your financial resources based on them.
4. Have a healthy financial boundary for your family events
Most people overspend on various family events. One of the best ways to avoid this excess is to set a proper boundary for your finances. For example, buying gifts for New Year and birthdays may be expensive. When you have a large family, the situation becomes even worse.
Going on vacation with the family can also be expensive. Therefore, before facing family events, set a proper financial boundary and stick to it.
5. Provide non-financial assistance
If you can’t or don’t want to help others with your financial resources, it doesn’t mean you can’t help non-financially and spiritually. You can support family and friends or people you care about in spiritual ways. For example, instead of lending money to an unemployed friend, you can help him find a suitable job.
6. When setting boundaries in your finances, don’t mind other people’s resistance
When you decide to pay attention to your own goals and make appropriate financial boundaries, you may face resistance from those around you. Others may resent that you don’t lend them money, take them out to expensive restaurants, or support them financially the way they expect. Do not pay attention to these issues and reach your financial goals.
7. Don’t feel guilty
As we said, when you set financial boundaries for yourself, you may offend others. Your family or friends may not support you and agree with your boundaries. Because of this, you may feel guilty.
At these times, remember that you are taking care of your finances and mental health, and there is no reason to feel guilty.
8. Understand other people’s financial boundaries
Other people’s financial boundaries are just as important as your own, so respect them. Everyone has the right to protect their financial resources in the best way. Therefore, just as you prioritize your expenses, pay attention to the economic priorities of others.
last word
Setting boundaries in our relationships is a great way to prevent interpersonal miscommunication. The same applies to financial distinction, which helps you improve your financial goals and establish a stronger relationship with those around you. At the same time, restricting financial and non-financial is hard and scary at first, but the more you do it, the better your performance will be.
How successful have you been in setting boundaries in your finances? Do you have any experience in this regard? Do you know something that you would like to share with us? If so, we’d love to hear them.
