How to Set Financial Boundaries in Any Relationship

Have you ever felt pressured to say “yes” to someone asking to borrow money, when in reality, you wanted to say “no”?

While talking about money may be difficult and uncomfortable for some people, it is crucial to do so. So is establishing financial boundaries with the people in your life.  

But what are financial boundaries? They are the financial rules and limits you set, based on how much money you have and how much you are willing (or can afford) to give away. 

How to set financial boundaries: Parents edition  

For the average Singaporean, parental allowance is usually non-negotiable. Most of us will have to give our parents a portion of our income every month, whether it’s out of filial piety or because our parents genuinely need the financial support (hello, sandwich generation folks).  

Sometimes, our parents might ask for more than what we give them. In other words, more than what we can afford, such as taking the family out for costly dinners or buying things for them. When that happens, how can we enforce financial boundaries without being disrespectful?  

In a podcast episode with Preeti, founder of HerFolio, a financial advisory platform dedicated to helping young Singaporeans plan their parents’ finances, Preeti highlighted the need for collaboration and open dialogue.   

She recommended discussing financial matters as transparently as possible with parents, and getting them to understand your position.  

Try enforcing your boundaries by giving “soft” rejections by saying:  

“I’d like to make you happy by bringing the family out for dinner, but I’m a bit tight on money this month. What about [next proposed date] instead?”  

“Due to [reason], I can’t give you more than X amount. Maybe we can meet in the middle and come to a compromise that works for the both of us.”  

How to set financial boundaries: Friends edition  

Whether you’re in a big group of friends or a small one, there will come a time when someone suggests an activity or restaurant that may be out of your budget. In this instance, saying no can be difficult, but necessary.  

Alternatively, try suggesting other activities or food options that have a lower price point. If you explain your situation to your friends and remain honest with them, chances are they’ll most likely oblige and work with something that’s kinder to your budget.  

But what about when a friend asks to borrow money, and you don’t know how to say no because you are afraid of disappointing them? 

Try these statements:  

“I can’t lend you money right now. You might find the help you need from [referred resources].”  

“Instead of splitting the bill, I will pay for what I ordered. I can do the calculations.”  

How to set financial boundaries: Partner/spouse edition  

When you’re in a committed relationship, money matters will crop up. It could be about one partner wanting to spend a large amount of money on something or just navigating financial goals together.   

After all, if you’re combining your finances and income into a single joint account, there needs to be a high level of accountability when it comes to managing money.  

So, how do you set healthy financial boundaries, while being respectful towards each other’s needs?  

For Matthew and his wife, who managed to save over $700,000 in eight years, being financially aligned was key for them to reach their financial goals. They offer this advice to other couples:  

“Try to have empathy for the other person’s situation, but also think about why they value certain things so you can come to a compromise.”  

The same can be said for Martin and Joanna, a couple living in Glasgow. Compromises are a key part of their negotiations with each other when it comes to spending decisions and drawing the line. They ask each other questions such as:  

“Why do we need it?”  

“Will it be worth it in the long run?”

Communication is key  

It all boils down to communication, and how willing we are to having uncomfortable, nerve-wrecking conversations.   

Brian Lim from Relationship Matters, an organisation that provides relationship support and couples counselling, highlighted that “communication is the bigger issue” in a previous podcast episode with TSS. 

Once we begin being honest with each other about our finances, things will generally become easier to manage, be it with friends, family or partners.   

At the end of the day, having open conversations extend far beyond personal finance and how we manage our money.