Establishing financial boundaries with friends can get complicated.
What if you’re already at dinner and your friends want to split a $500 bill when all you had was soup? Or they’re planning an expensive destination wedding that’s outside your budget?
How do you say “no because $$$” without sounding cheap or uncaring?
“There isn’t a right answer, which is why it makes it so complicated,” says Erin Lowry, aka The Broke Millennial, on the Erika Taught Me podcast. “But it’s okay to set your boundaries and just be very open, honest, and transparent in a way that makes you feel comfortable.”
Erika Taught Me
- Whether it’s splitting a large bill or getting invited on a trip you can’t afford, it’s okay to protect your budget.
- Set financial boundaries in three steps: Reaffirm the relationship, be transparent, and propose an affordable alternative.
- For the “shared bill” quandary, consider quietly asking the wait staff for your own check — or volunteer to do the table accounting yourself!
. . .
My best friend Collin and I used to get dinner every Friday night. We’d order schnitzel, down a couple of pilsners, and decompress from our work weeks — him from his grad school program and me from my corporate job as a project manager.
About five months into our ritual, Collin started making excuses for why he couldn’t make Fridays happen.
“Oh, I have a date on Friday.”
“I have to be in the lab until 11pm.”
“Oh, shoot, my folks are in town.”
Soon I grew worried. Had I said something uncouth? Was I getting in the way of a quiet effort to cut alcohol?
So I asked him, and he stated the obvious: “I love ya Bud, but I’m in grad school. I can’t keep going out for $30 meals. Can we just play pool next door instead?”
In a concise and compassionate way, Collin had set a financial boundary with me. In just those words, he checked three important boxes:
- He made me feel valued and reaffirmed the relationship.
- He was transparent about his situation.
- He took the initiative to propose an alternative.
I insisted on covering dinner, but he made a fair point — we probably needed a break from all that schnitzel, anyway.
3 Steps to Setting Financial Boundaries
Setting financial boundaries isn't about saying no — it's about saying yes to your financial well-being while keeping relationships strong.
The key is communication that's honest, caring, and creative.
Here’s how.
1. Reaffirm the relationship
When you’re holding out on a dinner date, road trip, or even a wedding due to budgetary concerns, it can leave the person who invited you wondering if you no longer value the relationship.
After all, humans have a strong negativity bias — meaning we tend to assume the worst because it’s better for survival (even if it totally bums us out).
That’s why when you’re setting a financial boundary, it’s best to remind the person that you 100% do value them and the relationship, and there are simply other factors at play.
- I can’t wait to hear about the new job, but…
- I’ve missed you these past few weeks, but…
- I love you, but…
2. Be transparent
This step is uncomfortable because nobody wants to sound cheap, broke, or like they don’t want to spend the money on you.
But even if one of the above is true for you, you don’t have to express it in such a blunt way. Instead, you can invoke the B-word: budget.
- I can’t wait to hear about the new job, but a proper night out is a little out of budget at the moment…
- I’ve missed you these past few weeks, but I didn’t account for a road trip in this month’s budget…
- I love you and these wedding plans sound amazing, and I wish I had the budget this year to join…
Notice how none of these makes you sound broke, uncaring, or cheap. If anything, you sound responsible.
RELATED: How to Change Your Relationship with Money
3. Take initiative
“One of the things that I think people screw up on… is just saying ‘no’ all the time because they don’t want to have the hard conversation,” says Erin.
So instead of saying “no,” try proposing an alternative — which is what Erika says she did.
“I graduated law school with over $200,000 in debt. Obviously, I couldn’t afford to do many things,” she tells Erin.
“But what I did do was if I wanted to hang out with friends, [I said,] ‘Hey, let’s do a potluck at my house, let’s go on a hike, let’s do a picnic…’ and kind of steer the activity towards what was within my budget.’”
RELATED: Bad Money Habits Keeping You in Debt
Here’s how that might look:
- I can’t wait to hear about the new job, but a proper night out is a little out of budget at the moment. Can we meet at a cafe for a shared dessert?
- I’ve missed you, but I didn’t account for a road trip in this month’s budget. Can we do a day trip to the mountains instead?
- I love you and these wedding plans sound amazing, and I wish I had the budget this year to join. Can I take you two out for dinner when you’re back?
(Granted, that last one may still cost you $300+, but it’s cheaper than a $3,000+ destination wedding.)
Taking initiative also helps in those sticky situations when you have no time for steps 1 or 2 but still have to erect a last-minute financial boundary.
For example, if you want to avoid splitting a $500 bill when all you had was soup, Erin suggests quietly approaching the wait staff early into the meal and asking for your check to be separate.
Or, if it’s already too late for that, Erin suggests grabbing the tab yourself so you can do the “accounting” for the whole table.
“I’m now always that person,” she jokes.
READ MORE: Money Conversations We Should Be Having
TL;DR: How To Set Boundaries With Money
Setting financial boundaries is ultimately about respect — respect for yourself and for your relationships.
By approaching these conversations with honesty, empathy, and creativity, you can protect your financial health without damaging the connections that matter most to you.
For more tips on managing your money (and your relationships), listen to the full interview with Erin Lowry or check out these other episodes of the Erika Taught Me podcast:
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