DULUTH — Mixing money and relationships can be hard — with parents, siblings, partners.

There are a lot of bad patterns and intense emotions associated with money, said Tanya Nichols, certified financial planner and president of Align Financial in Duluth. Emotions cause avoidance, and avoidance leads to issues.

Without personal boundaries, people may give too much to charity or overspend to keep up with the Joneses. In the case of adult children who struggle, retirees can sometimes help them at the expense of their own financial security.

Boundaries “create an environment where you don’t have to let emotion drive your decision,” Nichols said. It’s building a system that allows for more rational and logical decision-making.

Dina Clabaugh
Dina Clabaugh

“Boundaries” can have a negative connotation, so an alternative term is “agreements,” said Dina Clabaugh, psychotherapist and owner at Insight Counseling in Duluth.

Like with anything, we have core beliefs about money, how we save, how we spend, and they’re all colored by our past. Acknowledging that and where we want to go will guide our goals.

In relationship, being transparent about what we’re aiming for leads to healthy connection. “You don’t have good relationships, you do them,” Clabaugh said.

Good boundaries are also about omitting information people don’t need to know, said Rebecca Hudoba, financial adviser at Edward Jones. Boundaries in relationships are personal, so

In a relationship, it’s important to speak honestly and with respect, to share expectations on both sides and to keep asking “what else” until you’ve covered it all, she said.

Family systems

Thinking of boundaries as a system for decision-making can feel more proactive than rigid or restrictive, said Nichols.

Tanya Nichols
Tanya Nichols

When you’re clear-headed, set up a system of how and when you say yes or no to money requests before an event happens, such as a loved one’s medical emergency or vehicle breakdown. In that, create a system for how your family manages money, especially surrounding debt.

And bring it out into the open without judgment.

In a romantic relationship, one person’s goal may be getting out of debt, the other may want to save for a house or early retirement. Communicate that and create a family plan together, said Nichols.

If one partner likes to drive a newer car, and the other drives a car till the wheels fall off, there’s room for family compromise, such as agreeing to buy a car when it hits a certain mileage or after a certain number of years.

Another option is to agree to have only one car or debt payment at a time, she said.

Start by prioritizing and creating awareness around today’s spending.

One of the most honest ways is to see where you’re putting your money and energy. Look back at your statements and calendar from the past 30-90 days.

“If you show me those things, I’ll tell you what’s important to you,” Nichols said.

Then, ask yourself if your spending aligns with your priorities and be honest. Identify areas you find yourself spending more than you want to, and create ways to interrupt that habit.

If 60% of your money goes to remodeling and furnishing your home, maybe saving for a vacation isn’t as important, Nichols said.

Evaluating this will help you create a spending plan and habits that drive you toward a goal.

One example is going on an “Amazon diet,” and not shopping online for 60 days; or parents agreeing to contribute at a specific level for college tuition or a wedding, so they can save for trips or retirement.

And if you love getting daily drive-through coffee, be honest with yourself and budget for it.

On the flip side, spending money can be difficult for some, and financial systems give permission to update a bathroom or get snow tires.

For example, your goal is to have six months' worth of income saved, and your partner wants a family vacation. You look at your finances and see you have more than your goal amount. Instead of saying “no” to a vacation, your family system allows you to spend within your limits and have more life experiences, she said.

Your family systems, boundaries and personal goals will change over time.

Rebecca Hudoba
Rebecca Hudoba

When jobs change, there’s a pay raise, a move, a child graduates, reevaluate your priorities and what you want in the future, Hudoba said. Continue to ask yourself what’s important, family, friends, work, hobbies. That’s the starting point. Boundaries will follow and communicate them with people in your personal life.

We have a better chance of fluid relationships when we can put unique needs and backgrounds at the center of the conversation about money with loved ones, Hudoba said.

People expect money to happen by accident, and it doesn’t. You have to put the same attention toward it as you would a diet or exercise plan.

“Nobody likes to hear the word ‘budgeting.’ People think of it as bad. To me, budgeting is liberating. Knowing where your money goes is liberating,” Nichols said.

Once you’ve set your goals and financial boundaries, check in with yourself once a month and be gentle. “When it doesn’t go the way you planned, because it won’t, roll with the punches, honor that and keep going.”

10 examples of financial boundaries

Begin each with “I have a right to.”

  • Set financial boundaries.

  • Place my personal financial well-being before that of others.

  • Refuse to rescue others from their financial problems.

  • Be honest with myself about my financial circumstances.

  • Do what is in my own best financial interest.

  • Take responsibility for my financial future.

  • Not disclose my financial circumstances to those who ask about it casually.

  • Avoid people who undermine my financial well-being.

  • Avoid situations that might build debt or undermine asset building.

  • Be a healthy financial role-model for my children, family, friends, etc.

Center for Financial Social Work

Steps to setting financial boundaries

  • Assess the current situation and how you got there.

  • Talk honestly and clearly about wealth, goals and most importantly values with loved ones.

  • Determine the ideal outcome and steps getting there.

  • Decide your threshold.

  • Communicate with loved ones your current situation, concerns and hopes, and plans — and be specific. Outline a realistic timeline and tangible next steps.

  • Be firm and consistent.

  • Follow up with yourself and adjust accordingly.

Northern Trust