How To Handle 4 Messy Money Matters That Happen With Family
Family means the world to you, but you’ve recently experienced at least one uncomfortable money situation when spending time with them. Whether relatives were prying into your finances or trying to mooch off you, the encounter made you feel a bit uneasy.
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Knowing how to handle the situation can be tricky, as you might not always want to grant their request, but you also don’t want to strain the relationship. Here’s some advice to help you navigate four money matters you might face with family.
Requests for Money
A relative has asked you for money — either a loan or a gift — and you’re not sure what to do.
Joyce Marter, a licensed psychotherapist and author of “The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life,” said it’s fine to give them the funds, under certain circumstances.
“[If] you — and your partner if you have one — feel 100% clear about giving money to this person, trust they will use it for the reason requested and are comfortable with never receiving it back, [then it’s fine to do so],” she said.
However, she said it’s also perfectly acceptable to only give them part of the money requested or decline the request completely. She suggested politely saying, “As much as I/we would love to help you, I’m sorry that it isn’t possible at this time.”
In this type of situation, Marter said to remember that saying less is more.
Intrusive Financial Questions
As a non-meddler, you’d never ask a family member how much their house cost or what their annual salary is, but you can’t say the same for all of your relatives. Your nosy aunts have asked these questions more times than you can count, but you still haven’t figured out the best way to respond.
“Never feel pressured to compromise your boundaries in order to satisfy somebody else’s curiosity,” Marter said. “Prioritize your personal comfort and mental wellbeing over providing a polite response to somebody’s inappropriate question.”
She recommended having a canned response prepared. For example, you might say, “I’m sorry, as much as I’d like to share, my partner and I have agreed to keep our finances between us. I hope you understand.”
Pressure To Foot the Bill
You wouldn’t dream of not paying your fair share at a restaurant, but not everyone in your family feels the same way. This might especially be an issue if you earn more money than the relatives at the table.
Marter said it’s fine to pick up the check if you — and your partner if you have one — agree to do so and will harbor no resentment if your generosity is not reciprocated.
However, she said you can also find a compromise or politely say no if this isn’t something you’re comfortable doing.
For example, she said you might compromise by saying, “We are happy to foot the bill this time if you can chip in for the tip.”
If you want to decline the request, she suggested proactively saying, “Let’s pick a reasonable place to go or eat at home so nobody feels financial pressure.”
Pressure To Pay for Life Events
Outdated tradition calls for parents to pay for celebratory life events for their adult children — i.e., bridal showers, weddings, baby showers. However, this is certainly not something you should feel obligated to do.
Marter said it’s fine to foot the bill if you — and your partner if you have one — feel totally OK paying for the event for the amount of money budgeted.
However, she said there’s nothing wrong with compromising if you want to offer partial financial support or politely saying no if you don’t want to pay for the event.
If you opt to offer some type of financial support, she recommended setting boundaries.
“Work with dollar amounts and allow the adult children to work within that budget rather than saying, ‘I/we will pay for the venue and food or the dress,’ without knowing the actual costs of those items,” she said.
No matter what the situation, always remember that your finances are your personal business. Never feel obligated to spend money or divulge any financial details you don’t want to share because boundaries are important — even with family.
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