I’m a Self-Made Millionaire: Here’s How I Set Financial Boundaries With Friends and Family
Written by
Martin Dasko
Edited by
Chris Cluff
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As you work on your financial goals, you may find that you can achieve some success and become a self-made millionaire. While your friends and family will likely be happy for you, people around you may try to take advantage of this situation by asking for assistance or expecting financial handouts.
How does a self-made millionaire set financial boundaries with family and friends to avoid giving away too much? Erik Severinghaus, the founder and CEO of Bloomfilter, shared how he navigates finances with friends and family.
Adapting to Change Takes Time
“First, it’s totally normal for things to change when your financial situation changes,” Severinghaus said. “Suddenly, you might find yourself in a spot where everyone’s looking to you for a handout, whether it’s a loan, a gift or an investment opportunity. And while you want to help out, you’ve also got to look out for yourself.”
The first step involves waiting for the change to take place, as many of those around you may be surprised by your newly found wealth. This transition phase could be awkward, and it’s normal for people around you to act differently.
Saying No With Confidence
“One big lesson I’ve learned is that saying no is OK,” Severinghaus said. “Saying no can be challenging, especially when it’s someone you care about asking, but sometimes you have to put your foot down to protect yourself and your wallet. It’s all about balancing being generous and being taken advantage of.”
You don’t want to get into the habit of granting every request from those asking for money. Once you start giving money away, this could lead to further requests, so you want to set boundaries from the beginning.
Open Lines of Communication
Severinghaus brought up how critical communication is in setting boundaries. “You have to be up front and honest about your financial situation and what you’re comfortable with.”
You want to communicate with those in your close circle what you’re comfortable with so that false presumptions aren’t made that could lead to awkward situations.
Guilt-Free Prioritization
“You can’t let people guilt trip you,” Severinghaus said. “It’s easy to feel like you have to help everyone who asks, but at the end of the day, you’ve got to prioritize your own financial goals, too. Remember, you worked hard to get where you are, and it’s OK to put yourself first sometimes.”
As tempting as it may be to want to help those in your life, you must remember that you need to take care of your finances as well. Just because you have more money now doesn’t mean you should give it away.
Help Out Through Other Ways
“Helping out doesn’t always have to mean handing out cash,” Severinghaus said. “There are plenty of other ways to support your friends and family, whether offering your time, expertise or just a listening ear. Sometimes, that kind of support can be even more valuable than money.”
Chances are that your knowledge and experience increased as you built your wealth up. You could share this valuable information with those close to you to help them achieve their own goals.
Bonus Tips for Dealing With Friends and Family
We spoke with a few other self-made millionaires who shared insights on setting boundaries with friends and family.
You Should Set Clear Expecations
“As a self-made millionaire, I’ve learned the importance of open communication and setting clear expectations early on,” said Stephanie Mearse, a serial entrepreneur and vice president at Desert Capital Management Group.
If you don’t set clear expectations, people won’t realize that boundaries exist. You want to be clear about what you’re comfortable with from the start.
Being Firm Is Crucial
“It’s essential to be firm but compassionate when discussing financial matters, emphasizing the importance of responsible financial habits and mutual respect,” Mearse said.
If you’re not firm with your decisions, then those around you could feel like they could sway your decisions. You want to be firm so that boundaries are set.
Turning Down Requests Isn’t Selfish
“Remember, saying no to unreasonable requests doesn’t make you selfish,” Mearse said. “It’s about protecting your financial well-being and fostering sustainable relationships built on trust and understanding.”
You’re not selfish for denying requests because you also have to prioritize your own financial situation when making decisions about your money.
Offer Advice
“Help your loved ones understand the principles of financial responsibility and independence,” said Luke Lintz, a Gen Z self-made multimillionaire. “By offering guidance on budgeting, saving and/or investing, they too can learn to manage their finances effectively while not needing to rely solely on you for support.”
Your advice could be more valuable than a financial handout because you could help someone decide on an important matter.
Lead by Example
“Show them that millionaire status comes from hard work and discipline, not handouts,” Lintz said. “If you can demonstrate responsible spending habits and smart investments, you can inspire others to take control of their own future wealth.”
One of the best ways to set boundaries is to focus on leading by example and inspiring those in your life who are looking for guidance.
Closing Thoughts
“Setting financial boundaries might not be the most fun thing in the world, but it’s essential,” Severinghaus concluded. “By saying no when you need to, being honest with your loved ones, prioritizing your own goals, finding alternative ways to help out, and getting some professional advice when you need it, you can navigate this whole money thing like a professional.”
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