Amid rising inflation, interest rates and recession worries, money is getting tighter for many folks — and probably for you. Yet there may be charitable organizations you want to support, friends or family asking for financial help and things you want to buy for yourself. It’s possible to do these things even on a limited budget. But if you want to be responsible with your money, you have to know where to draw the line.
When is it OK to put your own interests first? Use these criteria as guidance.
WHEN YOUR FINANCES ARE AT RISK
Think carefully before spending any amount of money on somebody else, whether that’s $20 or $2,000. Will it jeopardize your ability to pay bills or save for emergencies? Picking up the lunch tab for a friend or helping put your kid through college shouldn’t come at the cost of your own expenses and goals.
A crucial part of this assessment: Assume you’ll never get the money back. There’s no guarantee your loved ones will repay you, no matter how well-intentioned they may be.
“If you can’t afford to give it as a gift with no expectations on your end, then you can’t afford to help,” says Lacy Rogers, a certified financial planner in Fort Worth, Texas.
Saving toward a “giving budget” in a designated account can create a clear separation for your spending, says Valerie Rivera, a Chicago-based CFP. If you don’t have enough funds in the account, that signals that you can’t spare the money.
YOU FEEL PRESSURED TO PAY
You’re not required to hand out money even if you have the means to be generous. You have the right to say no when you feel stressed or uncomfortable. Don’t let others talk you into something you’ll regret.
Saying no can be challenging, especially when dealing with family or a close-knit...
