Changing the Conversation

Key Takeaways

  • Establishing boundaries on our money with both ourselves and others helps keep people from becoming overly dependent upon us.
  • Continually paying off debts or financially rescuing our family and friends from situations is just a short-term fix to a long-term behavioral issue.
  • Sometimes tough love is what it takes for a family member or friend to break their money dependency cycle; there is no easy solution.
  • These situations are often very emotional and difficult, so don’t handle them alone and ask for help if you need it.

Several years ago, I bought a house in a new housing development. I went out to cut the grass for the first time and realized there were no fences. I was trying to figure out where the boundary line was, tried to stay within it, but it was hard to tell. You worry about the social issues of either cutting someone else’s grass or feeling like you made them cut yours. It’s all about boundaries.

In the same way, we have boundaries around money. If you’ve built wealth, you’ve probably established boundaries in terms of how much you save, spend, invest, and give. If you have children, maybe they have set boundaries of their own, and maybe not.

There may be children and other family members who are dependent upon us for funding their lifestyles or taking care of situations where they get in trouble, but they seem to do it often. That is the hard part of setting boundaries around money; we have to establish them for them and for ourselves.

Let’s look at a family member with a money dependency issue. It could be that your child has very high credit card balances that need to be paid off. Perhaps they are constantly behind on rent and are about to be evicted. Maybe they are consistently overdue on bills and are in trouble with bill collectors. In these situations, we try to help them out by paying off that balance, covering the rent, or paying the bills. But these are short-term fixes for a long-term behavioral issue.

The National Endowment for Financial Education found that 70% of lottery winners run out of money within two to three years. Why? Because they have no control or they’re giving that money away to family and friends. It makes sense; they’ve never had that much money before, so they don’t know how to deal with it.

Likewise, helping dependent family members deal with money is important, but it can sometimes involve a lot of tough love. There could be substance abuse problems, maybe children are involved, and other emotionally charged issues that make setting boundaries even more difficult to do.

There are many ways to address your family member’s dependency, but there is no one correct method. You might wean them off over time. Maybe you stop your support all together, let them fail and go through bankruptcy so they start back up on their own. There’s no easy solution.

Even after we die, if we leave our family members a lot of money and they are dependent upon us, the money is going to run out quickly, just as it does with lottery winners.

There’s no easy way to handle these situations and sometimes it’s best to bring in someone from the outside, such as a family friend or advisor. Unfortunately, we’ve been through this with many people and may be able to help you with a couple of ways to set money boundaries with your loved ones. Give us a call. We can help smooth the way to a clearer solution.

Until next time, enjoy.


Learn more about TransformingWealth™ , our proprietary approach, designed to get your arms around the big picture so you can make informed financial decisions. Ask Gary about Coyle’s TransformingWealth Preview Meeting, and schedule a complimentary consultation and start living the Good Life Managed Well™.

Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country.  He has over 30 years of experience and is the author of Changing the Conversation, The Wealth Sanctuary and co-author of The Business BattlefieldWhether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
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