How To Set Money Boundaries

What are money boundaries? As the name suggests, they are boundaries relating to money that you set for yourself and enforce when it comes to others in your life. So, how to set money boundaries, and why even do it in the first place?

Why you should set them

Setting boundaries around money is important for our financial and mental wellbeing.

And this concerns others AND yourself!

Money boundaries protect your financial goals, and helps you to reach them in the timeframe that you set for yourself.

For example, you’ve decided to save for something and set yourself a boundary that you don’t touch the savings, and prioritise saving money regularly.

This boundary will help you reach your savings goal in the timeframe you wanted to.

Or you decide to prioritise your own financial wellbeing over helping your (adult) children with big cash gifts. This could be making sure that you are on track to be financially alright in retirement through investing or making sure you become mortgage free at a desired age.

It could even be that you leave no inheritance to your children, but truly enjoy your retirement years rather than scrimping away to leave an inheritance.

While it could potentially be a difficult conversation to have (especially if the kids have grown up expecting it), this boundary around money could be very important.

Helping adult kids with big cash gifts could be the difference in needing or not needing their financial help later in life.

If you take care of your financial needs first, you can set yourself up for a financially secure life, knowing you won’t need to rely on your children to help you out financially (when they might have kids of their own to support).

What kind of money boundaries you should set

Any boundary you set that protects, or benefits, your financial wellbeing should be set and upheld.

When you are considering what kind of money boundaries you should set, the best place to start is thinking about your financial goals.

Your financial goals are there to increase your financial (or mental, or physical!) wellbeing, so setting boundaries around them will definitely be beneficial.

These could be prioritising paying off debt and setting a boundary for yourself to not take on any more debt.

You might promise yourself to spend less on something you usually spend a lot on, in order to reach another goal faster (less eating out for example), or put spending limits in place in general.

Or if you have a relative, or a friend, who often needs money, you might decide to agree to it less and put your financial needs first.

This might seem selfish, but if you think about it, taking care of yourself first means that later on you will be able to help more (if you so choose) and without any financial pressure on you.

Of course if you can reach your own goals AND financially help others, great! I’m not telling you not to help.

Just that you make sure that YOUR financial needs are also met, that way you can ensure that you won’t end up the one needing help later and by sorting your finances well, you might be able to be even more generous in the future.

Your money boundaries are personal to you, your goals and your current financial situation!

My money boundaries for 2023

For me, my biggest money boundary this year is prioritising saving money for our trip to Finland.

I know I will need to give it my all in order to hit my goal in the time frame I have, so saving for it will trump most other things.

Investing will be on a bit of back burner this year because of it, but I will do my best to invest some at least throughout the year.

I will also keep myself accountable with my spending and track it, plus keep to a budget, which will be reviewed monthly.

Another boundary that I’m setting relates petrol usage. There has been weeks where I have driven to New Plymouth multiple times, when if I was more organised, it could have all been done in one trip.

While it’s not a big drive (1h round trip pretty much), but the driving takes my time from other things and costs in petrol.

I will also try to walk more over taking the car, after all I live in a small town! This will save money in petrol and be good for my physical (and mental) health.

What are your money boundaries for 2023? Let me know in the comments!