How to Deal With Financially Irresponsible People in Your Life
One of the biggest challenges for people trying to live or maintain a financially responsible life is the presence of financially irresponsible people in their lives. There are people who use social pressure to convince you to make bad spending choices or poor financial habits. You have people who use their relationship with you to convince you to give them money. You have people asking for money and never returning it. You may even have people who will directly access your funds and use them for unwanted purposes.
This post was originally published on The Simple Dollar .
Regardless of how diligent you are with your own sound financial choices, these things can seriously undermine your financial progress. This is because in every case, financially irresponsible people can use aspects of your life outside of your finances to induce you to make the wrong financial choices. They can use the familial, romantic, social, and even professional aspects of your life to subtly (and not so subtly) nudge you into bad money behavior.
The dilemma for many people in these situations is that they feel they must choose between money and people, and that they feel it is wrong to choose money. Here’s the thing: The money you have is almost always the result of your own hard work and hard choices. You have made many sacrifices to make this money. If you spent it foolishly, you would not have this money. Foolishly using them or giving them to someone who will spend them foolishly, you are not wasting your money, you are wasting your life . You are sacrificing all the hard choices and hard work it took to improve your financial health.
I have to know – I’ve made a lot of these mistakes. I spent money to “keep up” with my friends. I gave money to friends and family knowing they would never return (and sometimes hoped it would, only to be disappointed). My spouse spent more than I expected (and to be honest, I’ve done the same with my spouse in the past, I’m sure). I have had people who have used my personal relationship with them to ask for money or to invite my wife (who is always my wife) to a “party” where social pressure is used to convince her to buy overpriced goods.
Each of these things was a mistake. All of these things happened as a result of financially irresponsible people taking too much interest in my life.
So, I started to limit this rate. In general, I took one of two approaches: either I found ways to minimize the ability of financially irresponsible people to influence my finances, or I carefully minimized their role in my life. Here are some of the specific strategies I have used or recommend to people in these situations.
Financially irresponsible spouses
Many financially responsible people get stuck with financially irresponsible spouses. This can happen in a variety of ways, but the most common paths involve post-marriage financial epiphany that the spouse does not share, or someone getting married believing that he or she can change their spouse. Both are problematic and require difficult decisions.
First of all, two key elements of any stressful moment in marriage are communication and compromise. You must be willing and able to talk about the topic, and do it without anger or personal attacks. If you can’t politely talk about the sensitive moments in your marriage without resorting to a flashy fight with personal attacks that go back and forth, you need to find a marriage counselor to help you get to the point where you can have a civil conversation. conversations with the type of communication that a healthy marriage needs.
Once you can sit down and discuss an issue in a healthy way, you need to understand that this is not a question of “right” or “wrong”, but a question of different values. A financially oriented person simply values things differently than someone who doesn’t, but that doesn’t mean any of these people are inherently wrong. The solution is to find a compromise that works for both of you . One good solution is to create a budget that allows each partner to have money that they can freely spend on personal belongings, gifts, hobbies – whatever he or she wishes – but the money shown has a monthly limit, so there can still be positive financial result. progress made.
The main problem that can undermine this trust . If one partner or the other deliberately and repeatedly violates the agreement that the two of you have, then a deep trust issue arises in the relationship, which is likely a sign of deeper problems in the relationship. Again, I recommend talking to a marriage counselor before proceeding further, but a lack of trust between partners is something that needs to be corrected as soon as possible before it can completely ruin the relationship.
Financially irresponsible parents
Some people, unfortunately, find themselves in a situation where their parents are financially irresponsible. In some cases, parents directly seek financial assistance from their children; in many other cases, parents will overspend and simply tacitly assume that in the worst case scenario, their children will take care of them.
Many children agree with this out of a sense of ingratitude towards their parents who raised them and (hopefully) protected them during childhood. However, this puts a real financial burden on children as they have to deal with the financial needs of their parents while keeping their own financial ship afloat.
Communication is absolutely essential here. If you don’t communicate, both parties will continue to act with unspoken assumptions, and such assumptions will eventually work, leading to a very unpleasant conflict that can easily ruin the relationship. If your parents tell you to your face that they are not counting on you in any way, then do so.
However, even with this kind of communication, many children experience strong feelings of guilt if their parents are in financial difficulties. What will you do in a situation where their struggle is not just an imaginary future, but today’s reality?
Above all, look for non-financial ways to help. Help them with household chores. Help them budget. Help them with business and shopping. You can even go further and help them cohabit. These are the ways you can help without spending money to solve the problem.
If you decide you really want to help, budget for it. Find out carefully how much you can afford to give, and then plan for it . Don’t just open a wallet all of a sudden, unless that money comes from a flexible part of your budget. If you are going to be constantly helping, you need to plan it now .
I also strongly discourage taking loans , which we will talk about a few more times in this article. Never lend money to family members or friends. If you are going to open a wallet and donate money, do it as a gift, not as a loan. Acting as a lender to others, your relationship turns into a lender-borrower relationship, and no one has warm feelings for their banker.
The most important thing to remember is that you don’t need to help. Relationships can sometimes become demanding, controlling and negative, and this is something that you will never need in your life, even if it is your parents. Don’t be afraid to get out of a negative situation.
Financially irresponsible adult children
What if your kids are financially irresponsible? Perhaps they are constantly asking for money or even regularly receiving a scholarship from you. They may even live at home without contributing to your household finances. How do you deal with this?
To begin with, it is important to remember that they are young with many years of life ahead . They are full of energy and have great earning potential. They also have the opportunity to get low-paying jobs – they don’t have to constantly strive for some kind of perfect job. (I certainly didn’t – one of my first jobs was literally shoveling the ground.)
In other words, you can cut them off. Young people have the energy to find a way to make everything work in their lives. They may find an entry-level job or two. They can find an apartment for themselves. They can balance their own budget. If necessary, they can find the resources to make ends meet. In fact, they need to do this kind of thing because it’s part of learning how to live .
I recommend giving your kids a deadline . Let them know that financial changes will take place in the near future and that they need to take action to cope with these changes. They need to find work. They need to find an apartment. They need to adjust their budget to live without a checking account deposit.
At the same time, offer as much non-financial support as possible. Ask them if they need help, and if they want to, dive into it. Help them find an apartment if they need this help. Help them find a job if they want this help. Help them move out. Offer as much advice as possible if they ask, and give them an open door for that advice. Some kids will want this; others won’t. Just make sure you are available.
Children often need a final push to finally get out of the nest and find their own path to financial responsibility.
Financially irresponsible extended family members
What about uncles, cousins, adult siblings, and other people in your life who can have a financial impact on you? What do you do when your brother or your niece knocks on your door asking for a loan or other help?
Above all, do not lend money to family members. Do not. Is always. Avoid it. You don’t need a lender-borrower relationship with your extended family members. First, chances are good that you won’t be able to get them to refund your money. Second, the lack of payback will cause a family split that will cause problems for many years to come. This is a story that repeats itself over and over and is not worth it. Don’t lend money to relatives. Do not.
Instead, openly offer non-financial assistance. Give this person a ride to work. Give this person advice. Help this person find a job. Invite them to dinner. Provide them with an ear so they can talk and a shoulder on which to cry.
What about when extended family members do things that encourage cost overruns, such as maintaining a tradition of giving expensive gifts or offering high-value travel together? Communicate as always, but not in those costly situations.
For example, if your family has a tradition of giving expensive gifts for the winter holidays, it is best to talk about it in the spring or summer, not in late fall or winter. If you do this right before the event, you are likely to generate resentment as people have already started planning for this. Instead, do it away from any such planning. Likewise, if there are expensive trips in the summer, talk about it in the winter.
When you talk about such things, offer a reasonable compromise. Instead of expensive gifts for everyone, give a giveaway or perhaps limit the value of the gifts. Instead of expensive travel, take a more modest trip together (for example, I’m a big fan of our national parks, so this is a modest vacation I want to go on). Don’t just say you don’t want to continue the tradition because it looks like you are rejecting them rather than rejecting an expensive routine.
Financially irresponsible romantic interests
You date someone and find that they are spending much less money than you or were in the recent past. This person spends money with an almost frightening ease, especially when it seems that his income cannot support him. You see a lot of Chase or Bank of America envelopes in their apartment. This is what you will notice when you get closer. But aside from this financial problem, the match seems to be great. What are you doing?
I honestly suggest that we be very careful about this relationship. I do not mean that you should end the relationship immediately, but that you should be more critical of the relationship in general. A completely different view of spending can be a major problem in a marriage, as you merge your financial life together (whether you keep your accounts separately or not) and dramatically different levels of financial responsibility will lead to some problems. road.
It is also a good opportunity to learn how to communicate about such issues. The key to a good marriage is good communication, and there are several issues that rely on good communication more than money. If you can talk about the difference in spending in a healthy way and come up with a good strategy that has some compromise for both of you, then that’s a good sign for your long-term relationship. If this conversation is difficult or impossible, then this is another strong negative sign.
When you come to a compromise, will your partner stick to it? This is a trust issue because you trust your romantic partner to stick with what you promised. Again, if you can talk about compromise and your partner doesn’t stick to it, then there is a trust issue. (There is also a trust issue if you don’t adhere to it either.)
Financially irresponsible friends
Let me put it bluntly: there are many, many financially responsible people in the world with whom I could be friends, so I have no particular inclination to maintain friendships with people who encourage me to spend money. Period. I just don’t make an effort to maintain friendship with people with whom it is expensive to maintain friendship.
This does not mean that I have no friends with expensive tastes. It just means that when I do something with these friends, I am not going to waste money and that together we are doing something that is usually really cheap.
The vast majority of my close friends just invite each other to chat. We have dinner parties, game nights, movie nights and booze marathons. When we do other things, we usually talk about it, and the two best bargain hunters (me and another person in the group) are looking for discounts and coupons and are planning the cheapest way to do it.
What will you do if your friends have expensive tastes? Offer less expensive options to start, at least from time to time. Very few people will mind sometimes doing things that don’t cost so much. If they do, then there is a deep value connection between you and that person. It’s okay to do something expensive with your friends from time to time, but it shouldn’t be the norm.
You should also never accept negativity and criticism from “friends” because of your inexpensive taste. If a “friend” makes fun of your car that you bought out of a deliberate money-saving strategy, you not only see a difference in values, but also a rejection of kindness between friends. This is a friendship that is perfectly normal to walk away from.
Another strategy is to choose low-cost social events and try to meet people there. I have met many of my closest friends over the past few years at community games and volunteer events. Almost all of these friends are quite humble people, and our social activities are usually inexpensive. If you follow this strategy, you will find that your social calendar is more and more filled with inexpensive events.
Financially irresponsible employees
In the workplace, you will sometimes face social pressure that will force you to go to expensive lunches or dinners or buy expensive items such as watches or gadgets. This pressure to “fit” into the job and build lasting relationships can cause you to spend a lot of money that you would not otherwise spend.
But here’s the truth. The strongest working relationships are built on other things, like trustworthiness, kindness, and healthy frankness. They are not made to spend $ 50 on lunch. They are built on being great coworkers, taking care of the things you promise to take care of, taking calls, not scolding people, and being an active participant in workplace conversations.
Another strategy is to deliberately distribute lunch among multiple people. Bring your lunch in a few days and eat with the people who stay in the office for lunch, eating the leftovers. Get to know them. Sometimes go out to eat out with dear people, but sometimes grab a bite to eat with cheap dinners. This not only cuts down on your lunch expenses, but it also allows you to connect with more people and possibly get to know people you didn’t know.
Merely interacting with an expensive crowd will do nothing to secure a place at work. A good colleague will provide you with this place more than anything else.
Final thoughts
All strategies in this chain boil down to a few key principles. Don’t lend money personally to people. Look for less costly social activities and value your relationships with people who share these activities with you. Communicate clearly if you want to make a commitment at a lower cost (and do so out of context). Don’t be afraid to update your social circle. Communicate, communicate, communicate with your loved ones.
Only with these strategies will you be able to maintain healthy relationships with some of the less financially responsible people in your life without taking the financially irresponsible path on your own.
Good luck!
Dealing with Financially Irresponsible People | Simple dollar