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How Money Boundaries Work

Updated: Nov 2, 2023

“When we fail to set boundaries and hold people accountable, we feel used and mistreated. This is why we sometimes attack who they are, which is far more hurtful than addressing a behavior or a choice.” Brene Brown - Gifts of Imperfection

Has a loved one or friend asked you for money and you didn’t know how to respond? Have you ever felt pressured to pay for something that made you uncomfortable or was outside your budget, or asked about your income or what you spent on something?


If you've experienced these or similar situations and didn't know how to act, what to say, or knew what you wanted but held back, welcome to money boundary work.


What are Money Boundaries?

Boundaries in general are essential to building and maintaining healthy and meaningful relationships. Money boundaries are no exception. They help us clarify needs and limits related to money for ourselves and others. When they're missing or we fail to articulate, enforce, or honor them, we can experience challenges both in ourselves and with others.


How money boundaries work

Internal Vs. External Boundaries

Boundaries can be viewed through two different lenses -- internal and external. Internal boundaries exist in our mind and are emotional, mental, or spiritual. External boundaries are those that are behavioral, material, physical, sexual, or social. They live outside our thoughts, feelings, and beliefs.


When it comes to money boundaries, we can find examples on both fronts.

  1. Internal - If you experience fear when asking for a raise or talking to a partner about money, these fears can run deep and be associated with prior experiences where you lacked the skill to respond or didn't feel safe when doing so. Your internal boundary around protecting and advocating for your needs may be difficult to manage as a result.

  2. External - If you consistently fail to check your bank account or assume you'll pay for someone without asking, you may be crossing external money boundaries.

In both cases, your boundaries, and how you define and manage them are up to you.


How to Set and Manage Money Boundaries

The following are some guidelines for clarifying, setting and enforcing financial boundaries.


1. Start with empathy and curiosity.

Boundaries are complicated. It can take time to get our head and heart around the concept even though we set boundaries all the time in all dimensions of our lives including food, family, work settings, exercise, etc. We often don't realize we have them until they're crossed or disrupted and we experience a negative reaction. If this happens, embrace the moment as a learning opportunity. When ready, try to respond with empathy and curiosity about what you bring to the table.


2. Explore your current understanding and use of financial boundaries.

In moments like the above, take note of the range of beliefs, emotions, and behaviors you're experiencing related to money. Write them down with as little judgment as possible. For example, notice where you get worked up or judgmental of yourself or others. What bothers you? Might you have a belief or behavior that runs counter to those of others? If so, what do you stand for or against?


3. How to manage money boundaries.

Money boundaries are about what you need, clarifying those needs, and then protecting them whenever possible. For example, if it's important that you live debt free or do all you can to reduce harm on the environment, you'll make financial choices in line with those values. If you find yourself challenged by others who don't respect your boundaries, go back to step one and see what you can learn -- knowing that the only control you have is over how you show up.

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