Why is it so hard to set financial boundaries and how to do it?

We are all a product of our environment, culture, and upbringing. And most Indians from middle-class backgrounds have a similar upbringing, culture, and experience with money and finances.


We were taught to be vigilant about our spending and saving but talking about money was frowned upon. We were taught to spend less but never appear cheapskate or money minded.


Even our own family’s exact earnings were not disclosed to us. Asking for the same from anyone was considered rude. Most of us carried this stigma around financial conversations into our adulthood and this created a barrier to healthy financial conversations with friends, family, and partners.


But it is very important to have a healthy financial boundary and conversation in this day and age when the prospects of spending money are endless. Not having proper financial boundaries can affect your mental and emotional well-being.


This is especially applicable for the upcoming festive season when your financial boundaries are generally pushed and tested by people around you.


But before we go ahead and figure out how to establish a healthy financial boundary, let us see what are some signs that you lack healthy financial boundaries and need to establish them,


You are uncomfortable with simple conversation related to money


Have you ever been in a situation where you have felt reluctant or apprehensive about asking people to split the bill or return the money they owe you? This is a big sign that you have difficulty setting financial boundaries.


splitting bill


If you are ever in a situation, where you know you cannot afford certain things or need the money that is owed to you but still hesitate to stand up for yourself, then you need to learn to set better boundaries.


You have difficulty asking for a bonus/promotion or salary hike


If you do not feel comfortable with asking for what you are worth and constantly postpone it and expect it to happen from their side. This is also a clear sign that you have difficulty taking the initiative to make yourself financially stable and need better financial boundaries.




If you have difficulty saying no to people and plans


If you agree to plans and people in financial matters like vacation, clubbing or people constantly borrowing money from you even when your budget doesn’t allow you to and you would be better off saying no, then also it’s a clear sign that you need to set better boundaries.


Another similar sign that you have an unhealthy relationship with money is when you give other excuses instead of communicating that you don’t want to participate because of budget constraints.



Now that we have established some signs that you need financial boundaries, let’s understand how you can establish these boundaries,


Understand and recognize patterns


Analyze your financial behavior and figure out what are some of the mistakes that you keep on repeating. It could be things like being unable to say no to certain people when they ask for money, feeling guilty while asking back the money you are owed or having a habit of making financial commitments because you don’t want to upset people.


If you sit and think about your past financial behavior, you will find harmful patterns that need to be recognized and addressed.


Create a list of boundaries


Once you have recognized your harmful financial patterns, now it’s time to create a set of rules for yourself and for others to follow that will be your boundaries. 


These can be something as simple as making sure that your partner, roommate, etc. pay their share of the bills on time to saying no when a family wants to borrow money without giving a clear explanation on why they want it and when they will return it. 


The goal is to prioritize your own financial needs over others and ensure that these needs are being met consistently. 


Practice communicating them to friends and family


communicating financial boundaries


Once you have decided on your set financial boundaries, it is extremely important to communicate them to your friends, family, and those around you. 


You don’t necessarily have to go around telling people about your list of rules. You just have to mention it whenever the right situation arises. And you have to be firm with your decision. 


If some close family member requests a certain expensive gift for Diwali, you need to tell them politely but firmly that your budget is xyz and if there is anything within that range that you would like. 


Similarly, if a friend insists on going to expensive clubs or vacationing frequently, let them know that this is out of your budget and you cannot participate in that activity. 


Communicating your needs also allows people around you to know where your priorities lie and make plans and decisions keeping these in mind. 


Follow up whenever the boundaries are violated


This is probably the most difficult part for the majority of us. In general, it is extremely hard to have sensitive financial conversations with people close to you. But it is even harder due to the cultural stigma around having an honest conversation about money. 


Even though this is an unpleasant experience, it is also very necessary for your financial well-being. Standing up for yourself when your financial boundaries have been violated lets people know that you are serious about your priority and that they risk losing you if they keep crossing these boundaries. 


These conversations can be anything from letting someone know the exact time you need them to return what they owe to making sure that people are taking their share of their bill or not pressuring you to get involved in plans that you cannot afford. 


Practicing these habits, when you have never been taught to do so, can be challenging initially. But having a healthy financial boundary and ensuring that people respect your needs will also prevent resentment, guilt, and negativity within your relationships. 


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