Struggling to Say No? How to Set Financial Boundaries According to Therapists

Setting boundaries, especially with family members, can be a tricky balancing act — and finances are no exception. But if an inability to refuse requests to borrow money is derailing your financial goals, it may be time to establish healthy financial boundaries.

What is a financial boundary, and how do you set them with a family member without stirring up hurt feelings or negative emotions? We talked to two financial therapists about why money boundaries are important and how to have that difficult heart-to-heart conversation without damaging the relationship.

What Are Financial Boundaries?

Healthy financial boundaries are limits you put in place on how you’ll handle recurring financial requests from family and friends. Setting financial boundaries allows you to be clear about how you’ll support loved ones without impacting your own financial goals.

A recent study from Savings.com indicates 45% of parents are still providing financial support for adult children. On average, parents spend $1,400 a month for items like groceries, car or student loan payments, a cell phone bill or rent/mortgage assistance.

In fact, parents 10 years or less from retirement are contributing as much as $2,100 a month of financial assistance for adult children — more than three times what they contribute monthly to their own retirement.

Apparently we have all forgotten the airline safety PSAs about securing your own mask before helping others. While parents naturally want to ensure a brighter financial future for their children, an inability to set financial boundaries can be ultimately damaging for everyone involved.

Warning Signs That You Don’t Have Healthy Financial Boundaries

Suppose you’ve gone through the process of establishing solid financial goals but are constantly missing those targets because you’re lending money. That’s one of many clear warning signals you’re in an unhealthy financial relationship.

“People with poor financial boundaries have a difficult time saying no when asked for money or to help with paying for things,” explains Dr. Traci Williams, board-certified clinical psychologist and certified financial therapist in Atlanta. “They might experience anxiety, shame, sadness or guilt if they do not give in to family members’ requests.”

You may need to establish clear financial boundaries with those seeking recurring financial requests if you’re experiencing any of the following:

• Worrying that family will be mad or say mean things if you don’t give them money.
• Prioritizing the family’s financial needs over your own financial needs.
• Feeling resentment toward your family for their financial demands.
• Being ashamed or guilty when you have to say no to family financial requests.
• Feeling obligated to provide financial assistance outside of your comfort zone.
• Being hesitant to communicate your limits regarding lending money.
• Feeling like you can’t or won’t discuss boundaries around money.

Aja Evans, LMHC and financial therapist, acknowledges that establishing clear financial boundaries can be harder in certain cultures.

“There is a level of expectation in some cultures to help family,” she said. “I am in no way, shape or form saying not to do that. But it is extremely important that if and when you are helping your family out financially that you are in a position to do so or that you feel OK about doing so.”

6 Steps to Setting Financial Boundaries With Family

Whether you’re in a financially abusive relationship or simply enabling bad financial behavior, establishing solid financial boundaries can be the just the thing to stem the tide of worsening economic troubles.

Here’s how to find financial peace by setting healthy financial boundaries with family and friends that won’t make you feel guilty.

1. Take Stock of Your Financial Situation

Before setting clear financial boundaries, you must know what’s causing your financial stress and issues with your family. Whether it’s numerous requests to borrow money or family outings you struggle to afford, paying attention to where your money is going will help you decide which boundaries to establish.

2. Set Clear Limits for Yourself

Before you can set boundaries for others, you need to set them for yourself. Decide how much you can comfortably budget to help family or friends. If you receive numerous requests for more money from the same people in your life, decide whether you’ll impose firmer limits for certain family members.

“Some people wanting to continue to financially provide for their family members decide to include family expenses as a line item in their monthly budget or create a sinking fund account for family needs,” Williams said. “This way, you are prepared when requests arise, and you can also inform them when your ability to help has ended.”

3. Decide How Much Information You’re Comfortable Sharing

Be aware that family members may have questions or feel resentment over your new money limits. Simply explain you’re trying to address an ongoing problem that’s undermining your effort to save money.

“Understand that you are not a bad person if you say you can’t afford or can’t do something financially right now,” Evans said.

Providing some insight into your spending decisions with specifics about your personal finance situation may be helpful, but it’s OK if that feels too vulnerable. You don’t need to feel beholden to explaining or justifying your boundaries.

4. Have the Money Talk

This is not a simple talk, but it’s a necessary one.

“I will always say that it starts with communication,” Evans explained. “Letting your loved ones know what you can or can’t do, what you feel comfortable or uncomfortable doing, is going to be paramount.”

Come to the conversation prepared for the power dynamics in your family situation and acknowledge negative emotions that arise. Above all, be prepared to stand firm and stay calm.

5. Avoid Communicating Judgment

Stress that your decision to impose healthy boundaries surrounding requests to borrow money or supply assets to family and friends isn’t about them making bad financial choices.

“Starting the conversation from a place of love reminds your family members that you care about them,” Williams said. “Let your family members know that you support them. From there, you can let them know you are working to better control your finances. By taking responsibility and speaking from your perspective, they are less likely to feel blamed or become defensive.”

6. Be Prepared for Pushback

Letting family or friends know you’re not loaning money anymore isn’t a recipe for positive feelings on either side. But you’re not in this for an ego boost. You’re there to advocate for yourself and build the right foundation for a healthier financial future.

How to Help Your Family Without Lending Money

While these aren’t the only possible outcomes of family asking for help in times of financial trouble, try leaning into these non-monetary options when someone you love needs support.

Listen Carefully

Sometimes family or friends aren’t flat-out asking for money, but they may hint it would be helpful. Take the time to listen to the situation and decide if the unmet long-term need is a financial one. Perhaps they need a financial literacy class or help putting together a budget.

Offer Your Time

Think about non-financial support you could provide that would be helpful in this situation. Help with childcare, yard work or simply scour classified ads looking for solid side hustles to bring in extra cash.

Offer Your Skills

You may have some professional skills you could put to work during this financial crisis. For instance, experience as a freelance writer makes you the perfect person to polish a resume. If you’ve got website or graphic design skills, you could create an online portfolio, business logo or website for a family member.

Stay Firm

Above all, seek to simply calm the anxiety your loved one is feeling and reassure them that this financial storm will pass. If you find yourself unnecessarily shifting your limits every time a problem arises, your boundaries aren’t boundaries.

“Keep in mind that you are only responsible for yourself,” Williams reminds. “By remembering that you are not responsible for the financial state of your family members, you can relieve some of your own guilt.”

Kaz Weida is a senior staff writer at The Penny Hoarder covering saving money and budgeting. As a journalist, she has written about a wide array of topics including finance, health, politics, education, and technology for the last decade.