A common concern that is often raised by some of my clients involves the repeated requests for money from family and friends. These clients are often described as the “hub” of their families; they are hard-working, financially stable, compassionate, and value their relationships with their community, friends, and families. They report a number of mixed feelings with repeated financial requests from their relatives. Some of these reported feelings may include anger, frustration, guilt, worry, mental exhaustion, sleeping difficulties, and simply—being totally overwhelmed. At times, they report going to bed with racing thoughts about the person’s reported financial situation and often wake up tired from a restlessness night of sleep. Do you share some of these some of these feelings? All of us go through personal or financial challenges in our lives. But when you start feeling like a personal bank or are a constant Paypal sender for those closest to you, it’s time to establish healthy financial boundaries with relatives and other loved ones. 

Here are five tips to establish clear financial boundaries with others, and help you break the cycle of serving as the family perpetual money source. 

1. Identify those seeking recurring financial requests

It’s one thing to help a family member or friend out of a single event or crisis situation – or perhaps to come to their rescue more than once if they’re going through a particularly long rough period in their life such as prolonged unemployment in our recovering economy, home foreclosure, divorce and other unplanned life events.

But if you’re constantly being asked for money or loans – or if you receive numerous requests for financial assistance, you’re likely caught up in an unhealthy financial relationship. You may simply feel getting taken advantage by these friends and family members who have come to rely on you as the “dependable” place where they can turn. This unhealthy pattern has now evolved into a vicious cycle of false dependency and unhealthy boundaries. Something’s gotta give.

2. Be brutally honest about your feelings

Take a moment to reflect, be brutally honest, and get in touch with your feelings. Once you identify the family members or friends who frequently ask you for money, take a moment to think about how those requests make you feel. Your honest assessment may reveal both positive and negative feelings.

Most of us don’t want to acknowledge negative emotions because they make us uncomfortable. But it’s important to recognize what’s going on with you internally. That exasperated Not again!, “sick and tired of being sick and tired" feeling. The tension headaches, heart palpitations, muscle weakness and tingling, and indigestion, or queasiness in your stomach you may be experiencing are your body’s way of giving you red flags and warning signals.

Perhaps repeatedly being asked for money from the same “cast of characters” (i.e., your family and friends) makes you frustrated, sad, mentally exhausted, guilty (i.e., concerned about the perceptions of others or from complicated family dynamics), overwhelmed, or just plain angry! You might come to realize that you spent an exorbitant amount of time thinking about others-- being compassionate for the person making the repeated request with their current situation—neglecting yourself, your own needs, thoughts and feelings. This vicious cycle of dependency often leads to family conflicts, significant loss or change in the relationship, and hurt feelings.

Surprisingly, you may actually have some positive feelings associated with constantly being asked to help family and friends. Are you the type of person who enjoys being the problem-solver, the peacemaker, the “family hero” or the rescuer? Or maybe you secretly get an ego boost out of knowing that you’re the one in the family who’s at least stable enough that people come to you for help, this is commonly referred to as your “secondary gain”—positive regard from others and filling the void for your own need to be viewed in a favorable light, or concerned about the other people’s perception.

Regardless of what’s happened in the past, it’s time to set some healthy boundaries for you and those people in your life. And sometimes, paying attention to our emotions – whether it’s being angry, fed up, or simply calm and at peace because you have a moment of clarity – can be just the thing we need to motivate us to make the right choices.

3. Ask yourself the right question

In cases where you really want to say ‘no,’ but are afraid or reluctant to do so, ask yourself one simple question: “Why am I hesitant about saying ‘no’?”

Once you answer this question with brutal honesty, you’ll probably realize that you’re worried about one of three things:

1) You’re worried that your family members/friend will get mad at you, think you’re selfish and inconsiderate or that you don’t care about them.

2) You’re worried about hurting the your family members/friend’s feelings or offending them

3) You’re worried about your family member/friend rejecting you in some way, or not loving you or being as close/friendly to you.

It is important to note in these scenarios that what you’re really worried about is what will happen to your relationship with your family or friends if you decline to provide help. Remember, we are all emotionally sensitive, want to be loved, to be positively regarded by our family, and fear being isolated/alienated by others.

Unfortunately, if you follow this way of thinking, you will be in the perpetual and viscous cycle of unhealthy financial relationships. However, stop and take a moment to think about what will happen to the relationship if you do continue to provide help?

It’s far more likely that the relationship could be damaged by the constant lending of money. That’s because any number of situations could happen:

• The friend/family member may not pay you back on time, or at all, upsetting you and damaging the relationship
• The friend/family member may end up coming back for more money, also upsetting you, and ultimately damaging the relationship
• The friend/family member could feel beholden to you in some way, unnecessarily shifting the power dynamics in the relationship, thereby damaging it

So clear your mind of worries that an answer of “no,” or setting healthy limits will hurt the relationship.

And most of all, realize that if you saying “no” does hurt the relationship, then the relationship was not as strong or secure as you thought, or it wasn’t built on the right foundation. No family relationship or friendship should be dependent upon your ability or willingness to give money, loans, or co-sign for credit cards or car loans.

4. Address the family member’s situation realistically

Most of us don’t ask ourselves the right question when considering a request to supply assets, loans, or credit to family members or friends.

The truth of the matter is that if you say ‘no’, there are only four possible outcomes:

1) The family member/friend is forced to turn elsewhere for help

2) The family member/friend is forced to get creative to come up with a solution to their problem

3) The family member/friend comes up with the money on their own

4) The family member/friend suffers the consequence of not being able to raise the money needed

Breaking the Cycle of Financial Dependency Can Lead to Positive Changes

Some things to be aware of in the complex relationships of family, friends, and money is that even if you decide not to give your family member/friend money, and they suffer the consequences of their inability to pay their bills/debts, maybe it’s actually for the best. Ultimately, a lesson learned.

Maybe by saying “no” you can break the cycle of their dependency on you. Alternately, by saying “no” you might help your relative/friend face some “hard truths” about their financial situation.

Maybe the relative/friend who can’t routinely afford their expenses are living above their means. It might encourage them to stop and think about why they continue to be in this predicament, take a realistic assessment of their life, and most importantly, their finances.

Remember to take a deep breath—a change in the way you respond, behave, or think might be uncomfortable. Asserting yourself by saying “no” and setting healthy financial boundaries with loved ones may initially sound harsh or you may appear as uncaring, cold, and selfish. But it is also important for you to recognize these unhealthy patterns of financial behavior and how they can impact your own life in the long term– and the lives of those around us. If you constantly come to the aid of friends or relatives who are making bad financial choices, you are simply enabling their behavior, training them to keep coming to you for help, and making yourself the victim of a financially abusive relationship. You teach people how to treat you!

Some ways to spot a “financially abusive relationship” is when family/friend promises to pay you back, but doesn’t; or when family/friend pushes your emotional buttons to make you feel guilty or “selfish” about saying “no.”

Don’t let your fear of being rejected by a family member/friend prevent you from standing up for yourself and establishing solid financial boundaries.

5. Having the money talk

Setting the Scene. Some things to be aware of when having sensitive conversations with family about money:

Always take care of yourself. Just remember you always have choices when trying to establish healthy financial boundaries. Be mindful of what is going on in your own life, your own feelings, and most importantly, your energy level.

Engage in a little self-talk. Always remember that you are not responsible for their financial predicament and do not have to continuously give them money. Take some time to organize your thoughts and the message you are trying to convey.

It can be very difficult to have a simple talk about money, especially if financial issues have been an ongoing problem. We are simply not conditioned to talk openly about issues relating to money: how we spend it, discriminating between our wants and our needs, and the value we place on our money and things. No one said that having these ”hard talks” are easy… However, they are needed.

You need to sit down with the family member/friend who makes the repeated request for your money and suggest other possible options. It can be a little complicated and a somewhat delicate balance with being both compassionate and assertive. Remember, you don’t have to personalize or “own” this problem. In a clear, civil, and concise manner you need to communicate with them that you can no longer be the solution to their economic troubles. You can brainstorm with them possible solutions. When having this “hard talk” with your family member/relative, you need to be clear that ultimately you don’t have to solve their problems.

Don’t be afraid to say flat-out that you are uncomfortable with gifting or loaning them money anymore.

Learn to respectfully say “no” without feeling the need to justify your actions. If your family member/friend appears offended or becomes angry when you deny their request, explain that you don’t believe this is healthy for your relationship and that you are not trying to hurt them.

Life happens, sometimes you simply do not have the time or the energy to sit down and have a heart-to-heart conversation with your family member/friend who needs money. Other times, you may have just reached your limit and the request for money could lead to a negative outcome and lead to an argument. Stop, relax, regroup, and take a breath. Refocus, just remember, it’s your money!

Ultimately, you need to set these types of boundaries so that both of you can enjoy some financial peace of mind – and hopefully preserve your relationship too!