It’s your money. Whether you’re barely making ends meet or have more than enough, you’ve earned every penny of it. But are you sure you’re the only one spendingÂ it?
A big part of managing your money is being clear about what you’re earning, what you’re paying, what you’re keeping and who you owe. However, you also need to manage something even moreÂ important: WhoÂ has access to your money and other assets, and under what terms.
For many of us, our cash flow issues are not because we are overspending on ourselves, but because of overspending by and for others. We’re especially vulnerable to those we have an emotional attachment or a sense of obligation to, such as relatives, long-time friends, children, and romantic interests. So even though it’s your money, you likelyÂ don’t exercise your absolute ownership and control ofÂ it.
My recommendation: Track your spending for a month. Play close attention to money spentÂ to provide for the wants and needs of others. ThenÂ ask yourself a tough question: Why are you doing it? In most cases, if you are honest, you are buying things people should either buy for themselves or do without. Here are areas you should focus on.
Unnecessary spending on minor children.
Food, water, clothing, shelter and related utilities–the basics are all you should be spending money on for your minor children. Everything else: teach your kids to earn their own money to pay for it. Gifts for birthdays and Christmas are fineÂ exceptions to this rule, but even then, you should resist the pressure–from your kids as well as the onslaught of advertising–to spend more than you’ve budgeted for, and to take on moreÂ debt to do it. Your job as a parent is not to give your kids everything they want. It’s to teach them everything they need to know to become independent, productive adults. That means providing your children with financial education, not just buying them stuff.
Taking on adult dependents.
Are you spending money, covering expenses, and otherwise providing for the financial needs of able-bodied adults? In our book Loving In The Grown Zone, my wife and business partner Zara Green and I call that supporting adult dependents. These are otherwise capable people who are disinterested in providing for themselves (and may even resent having to do so), especially if they knowÂ others ableÂ to do itÂ for them. Many people in your life may fall into this category, including parents, adult children, other relatives, and friends.Â It’s your money. Why regularly pay bills, extend loans (which are rarely repaid) and operate as a living ATM for others?
How much is loveÂ costing you?
Romantic interests can also be adult dependents. (Commit to a relationship with oneÂ at your own risk. Don’t say you weren’t warned.) If you are financially independent–your retirement and emergency savings funds are fully funded, you have no debt, plenty of assets, and your income far exceeds your living expenses–this may not be a problem to you. (On the other hand, plenty of people wealthier than you and I have lost fortunes toÂ relationship scammers after being blinded by love.) Otherwise, using money to get or keep a relationship is a bad idea, both emotionally and financially.
After tracking your spending for a month, determine how much of your money is being spent by others and multiply that by 12. How much of your annual budget is going toward supplementing the expenses and lifestyles of others? There goes the money for the contribution to your retirement fund, or to pay down your credit card debt or finance your new business.
Now comes the toughest question.Â If it’s your money, why are you allowing others to spend it?Â (After all, they’re not putting a gun to your head.) The answer nearly always come down to one of theÂ emotions–including fear, anxiety, and guilt–that drive most unhealthy financial behaviors. How you handle your money (or allow others to handle it) is usually a symptom of deeper issues. It’s your responsibility to identify and address them if you want to gain real control of your finances.
The bottom line: No one has a right to spend your money, no matter who they are or how much you love them. So don’t allow others to drain income from you out of guilt, to prove your friendship, or as a show of love. After all, it’s your money. You should be spending it, whether on yourself or others, in ways that are healthy for both you and your budget.
Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, Â personal growth/relationships coach, and co-founder ofÂ Grown Zone,Â a multimedia initiative focused on personalÂ growth and healthy decision-making. This blog is dedicated to his thoughts about money, entrepreneurship, leadership and mentorship. Follow him on Twitter atÂ @AlfredEdmondJr.