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Friends, Finances, and Boundaries

Written by: Tonya (she/her)

3 min read | Published: February 29, 2024

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After giving a presentation on budgeting, I had a student share how they had been working part-time for a year, but had nothing to show for it. because they had spent and loaned so much of their money to friends. When they did the math, they had spent more than $1,000 on friends. During the same year, they borrowed money from a family member, which they were still in the process of paying back. This article will focus on friends and finances by providing tips on how to set financial boundaries with friends and outlining why this is important.

Know Your Goals

Think about your finances like an airplane face mask. Before takeoff, flight attendants go over important procedures, one of which instructs us to take care of ourselves before helping the passenger next to us. Before you can help your friends with their goals or obstacles, you first need to know your own.

What financial goals do you have? Do you want to create an emergency fund? Are you hoping to purchase a vehicle next year? Is there a vacation that you have been dreaming about? If you have not taken the time to determine personal financial goals, you may be more likely to spend money on others. The lack of purpose behind our finances can lead to personal financial strain in the future, and setbacks to any potential goals.

Be Self Aware

Becoming more self-aware and understanding our internal motivators is an extremely important part of adulting, especially when it involves our finances. In considering your friends and financial boundaries, it is important to understand your motivators for lending money to those around you. Here are a few questions to ask yourself when it comes to lending money:

Take a moment to consider what other questions you can ask yourself when it comes to growing your self-awareness behind lending money. If you are finding it difficult to come up with questions, try this instead: identify what emotions you feel related to the last time you loaned someone money. Do you feel comfortable with that decision, or do you regret loaning money to that person? Why? feel when you begin the process of considering loaning money to others. You may experience a variety of feelings when you accept or decline a request to loan money to a friend. The feelings wheel by Calm is an additional resource you can use to help identify your emotions related to loaning money to friends.

Practice Saying No

After deciding whether you can loan money to a friend, consider how you will communicate this. When declining a friend or family member’s request for cash here are some things to remember:

Have A Plan for Lending Money

The goal of this article is not to convince you to decline lending money to someone you care about. Instead, it is to help you consider why you are lending and how to lend money to friends should you choose to do so. If you would like to lend money here are a few things to keep in mind:

Overall, lending money to friends can come with lots of complex emotions, but having a plan can help you navigate those feelings effectively. Your plan starts with your goals and a better understanding of what you can and cannot afford. Next time finances come into play within a relationship, revisit these tips to help you think more strategically.


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