Realize you can’t do it all
You’re a nice person. You want to help others. You love your family and friends. But let’s face it. You can’t do it all. You cannot put everyone else’s needs above your own. Although this is something we know, it can be hard to put into practice. You are successful. You’ve done well for yourself. And other people count on you. But you have to realize you can’t be everything to everyone. You cannot give all you have away leaving nothing for yourself. You cannot put the livelihood of yourself and your immediate family in jeopardy because of your generosity to more distant family members or friends. You cannot continue to give away endless amounts of money to others before paying off your own debts and obligations. As the airplane stewards say “put your own oxygen mask on first before trying to help someone else”
Decide how much you can afford to GIVE away
There’s an old adage that says “Never loan money to family that you expect to get back.” In other words, when it comes to family, loaning money isn’t wise. Either give the money away with no strings attached or do nothing at all. Loaning money creates unnecessary tension that could destroy loving relationships and families. Give away what you can and make peace with the rest. While some people cannot fathom the thought of financing the livelihoods of their extended family, others consider it as natural as brushing their teeth. Whether you view it as an important tradition with tremendous value or a rare occurrence, decide what you are willing to give. Look at your monthly income and expenses. Decide a reasonable amount you can actually afford to give away each month. Is it $50 or $100 or perhaps $500?
Create a Family Savings Account
I find that having a set amount in your head may not be enough. When it comes to family many of us don’t stick to our boundaries or budgets as much. One way to avoid overspending is to create a family savings account. Deposit money into this account each month with the amount you can afford to give away. As family needs come up, you can pull money from this account to assist your family. This allows you to save for the financial needs of your family without having to assist with large purchases last minute. Make a rule that the money you give to your family will no longer come from your bank account directly. It will now come only from this family savings account. Each month you can make a deposit into this account to build up reserves for any financial requests/needs of your family may have in the future.
Set expectations and boundaries
Let your family know that this account cannot be over drafted. This means that once the money is out and the balance goes to zero, they must wait for the reserves to build up again before more money is given away. This allows you only give away what you can afford each month without being bombarded with last minute requests that you didn’t plan for. It creates boundaries and allows you to set expectations around what you can give away without jeopardizing your own financial goals and obligations. You get to be generous to your family and still take care of yourself. It’s a win-win.