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Protecting Your Finances and Relationships

Lending money to loved ones can be a delicate matter. A recent survey found that nearly a quarter of people who lent money or covered a group expense with the expectation of being paid back reported a negative impact on their relationship. To avoid this strain, it’s essential to set clear boundaries and communicate them effectively.

Assess Your Financial Situation

Before lending money, consider your financial situation. Can you afford to give the money without compromising your own financial stability? Aja Evans, a board-certified therapist specializing in financial therapy, advises, “You cannot potentially sink your own ship to bail out someone else.” Be honest with yourself about your financial priorities and limitations.

Setting Healthy Boundaries

Directly saying no to a loan request can be challenging, especially if you’ve lent money in the past. Start by lending what you can afford, even if it’s less than requested. For instance, if a friend asks for $100 but you can only spare $20 or $30, offer that amount instead. Be open about your financial obligations, and explain why you can’t provide the full amount.

Dealing with Guilt

Refusing to lend money can lead to feelings of guilt, even if you’re proud of setting boundaries. To cope with these emotions, write down your financial goals and the reasons behind them. This will help you stay focused on your priorities and remind you why you set those boundaries in the first place.

Coping Strategies

When you do give in to a loan request, have a list of coping strategies to manage stress and anxiety. This could include activities like taking a bike ride, cooking, or practicing self-care. Having a plan in place can help you navigate difficult situations.

Long-Term Benefits

While setting and maintaining financial boundaries can be tough, it’s crucial for achieving your long-term financial goals. By prioritizing your own financial well-being, you’ll be better equipped to meet your needs and feel more confident in your financial decisions.