Being Firm About Your Finances: How to Say “No” in Difficult Situations

You are the master of your budget. Well, you’re trying to be at least, and you have the best of financial intentions. So what happens when those awkward financial situations come up? You know what we’re talking about: your friend invites you to a party where she’s selling kitchenware, a charity worker comes to your door asking for donations, your coworker’s kid is having a fundraiser, or your friends want to go to a super expensive restaurant. Saying that one teeny tiny word “no” can feel like the hardest thing to do, and you might end up giving in more often than you’d like, simply to avoid that icky feeling of saying it. But all of those yeses can add up and start to eat away at your budget! You need some strategies for saying a hard financial “no” in difficult situations, so you can stick to your budget and reach your goals when it comes to saving and spending.

Tell Them About It

two people sitting down at a wooden table with coffee in their hands
Do not be afraid to tell your friends and family that you are on a tight budget.

We’ve already established that you’re on a budget, and that’s great! And you know what? While you certainly don’t have to disclose all of your personal financial information to your friends and family, it’s perfectly ok to have this one important phrase in your arsenal: “I’m on a budget.” Feel free to add the word “strict” or “tight” to that sentence; however you phrase it, it’s hard for someone in your life to argue against boundaries you’ve set for yourself. 

Consider being proactive and talking about your budget with friends and family, so they’ll already be aware of it, and will be more likely to accept your final answer when you’re asked to spend. If the request is something like an invitation to an expensive dinner out, you can always thank them, express your desire to go, and tell them that you’ll budget their request for next month!

Practice Makes Progress

How do you get to Carnegie Hall? Practice, practice, practice! How do you get more comfortable with saying “no?” The same way! It might sound silly to practice that one simple word, but a lot of people need to work on it – it’s not easy to refuse requests; it can feel almost embarrassing for us, or like we’re going to hurt the other person’s feelings. But some financial experts suggest that you can start small, and build up a type of resistance to this discomfort, which will eventually make it easier for you to say a guilt-free “no” to any financial request.

two red hands with the letter N in one and O in the other spelling out NO
Learn to say no to friends and family by practicing saying no in different ways.

Practice saying “no” out loud (try it – it might even feel a bit funny!), and use your power of refusal in small situations. For example, if you don’t want to contribute to someone asking for charity contributions on the street every time you pass them, practice looking them in the eye as you pass and politely saying, “No, I’m sorry, I already contributed yesterday and won’t be contributing again this week/month/year.” Or, if you’re always asked to participate in a gift exchange but it isn’t in your budget, offer a polite “No, sorry, not this year, I’ve already used up my gift budget.” Getting used to these simple, polite – but maybe slightly uncomfortable – refusals will build up your tolerance to using the word “no” and the reaction it elicits, and you’ll be able to handle any awkward financial situation!

Maybe Later…

Learning to say a firm “no” is a great idea, but you don’t always have to say no in every situation. Sometimes simply deferring until later is an acceptable strategy: you can say that you appreciate the offer, but now is not the right time, and you’ll reach out when you can swing things. This will buy you some time (no pun intended!) and put you back in control of the situation. If you’re being asked for a contribution, put off saying “yes” by telling the person you will look into their organization and might make a donation at a later date. 

Your Money, Your Choicebrown wallet with a wench tightening it

Just as you might need to practice saying a firm “no,” you might also need some practice reminding yourself that if a situation involves your money, it is your choice whether you want to hand over that hard-earned dough. Do you really want to participate in all of those fundraisers that your coworkers’ kids pass around, or do you want to buy every box of Girl Scout cookies that your acquaintances are trying to unload? Probably not, so assess the situation, decide if you want to decline (and how you feel about possibly being the only one to say no), and stand up to the peer pressure if need be. You can use the old “I’ve already made all my donations for this month/year” line, or you can simply decide to opt out of participating in any of these activities. You just have to do a cost/benefit analysis, remembering that you get to choose what you do with your money.

Find Another Way 

Financial requests are coming at you from every direction, and maybe you want to help, contribute, or join in but, again, that pesky (and very responsible) budget of yours is just making it impossible. So if you truly want to be a part of these situations, why not offer other, non-monetary solutions? For example, someone with a worthwhile charity comes right to your door to ask for a contribution (always a tough one!):  you could try the putting it off until later strategy (“I’ll check out your website and decide if I’d like to contribute”), or the it’s my money, my choice strategy and simply tell them no, you’ve already allocated all of your charitable funds for the year. Or, if you’re really interested in helping this particular charity, say you’d like to help but are unable to do so financially, and ask them for information on volunteering.different colored hands forming a treeAnother example: your friend is holding one of those parties where they’re going to sell kitchenware, lingerie, books, etc and you know you don’t want to spend any money on those things, but you want to be there for your friend. So tell them that! Talk to your friend and find out why they’ve really invited you: it might simply be that they’re nervous about hosting the party and would love to have a familiar face there. Offer to go and be their support and help them host!

And if it’s something you really would like to do, like go out with your friends for dinner? Suggest other, cheaper options, like going out for coffee, dessert, drinks – or, better yet, suggest a potluck that you can all have fun contributing to. And if their hearts are set on that expensive dinner out, offer to go along as company, but make it clear that you’ll just be having a drink and helping out with the tip.

Be Honest with Yourself and Others

In the end, honesty is the best policy, right? You don’t have to lie to anyone to get out of spending your own money; you can use gentle deferrals, alternative suggestions, or just a polite, firm “no” to save yourself from financial hardship. Sometimes, though, “no” can be an invitation to salespeople to try even harder, so be ready to tell them honestly that it’s really “no can do” right now. 

Remember, it’s just as important to be honest with yourself about your finances as it is to be honest with others about what you can afford or want to spend. Regularly assess your budget and consider trying a system that helps you really know how much you have for the types of requests we’ve looked at above. For example, use a budgeting app if you’re into tech; if you’re looking for an effective, analogue system, try putting money into different envelopes for different types of expenses: when you run out of money for each thing, you can honestly say to yourself – and others – that you don’t have anything left in your budget for that! 

When it comes to sticking to your budget, we know you can do it! There might be bumps in the road, like when you come across situations where it can feel awkward to say “no” to spending, but with a few strategies and a little practice you can avoid getting off track. So get out there, practice your “no”s, and release yourself from the guilt of not spending your hard-earned money.

Is Your Wallet Ready to Go Back to “Normal” Spending?

2020 hit many of us hard. Even those of us who did not suffer physically from the coronavirus were touched psychologically by the effects of the pandemic. Many people were also affected financially by all of the state and local shutdowns and business closures that the pandemic triggered. But while many people lost their jobs and have been struggling financially, the strange truth about this unusual recession is that many people have actually saved more money this past year than they ever have. So the question for many of us becomes: after this crazy year, are you and your wallet ready to go back to “normal”?

Changing Habits

What have you been missing over the past year? Going to restaurants or the movies, or taking trips? Well, all of those little things that we used to do without thinking all added up to a lot of discretionary spending, and, since we haven’t been doing those things as much, that spending has decreased. For example, with fewer Americans commuting or taking car trips, spending at gas stations went down roughly 30% during the pandemic. And spending at bars and restaurants? That plummeted by over 40%. As some people have joked, their budget for entertainment, clothes, and gas added up to $0 a month during the pandemic, while their monthly grocery bills soared to $1500. 

a piggy bank on top of a stack of money.
The average income that people saved during the pandemic was 33.7%, which is 13.7% more than the normal average.

So, for people lucky enough to have kept a steady income throughout the pandemic, what has this shift in spending habits meant? It might have been bad for many small businesses, but the numbers show it has actually been good for Americans’ bank accounts. Consider this: while traditional budgeting advice often suggests aiming to save 20% of your income, in December 2019, the U.S. personal savings rate (the percentage of national personal income people saved in any given month) was 7.2%. In April 2020, that number skyrocketed to 33.7%! 

It’s unheard of for the personal savings rate to soar above the suggested 20%, and, while it hasn’t stayed that high, it was still at 20.5% in January 2021 – over 13% higher than just a year before! According to Anand Talwar, a deposits and consumer strategy executive at Ally Bank, “When consumers feel or see risk, they change their behaviors and stockpile or change their spending habits. We saw some really dramatic changes in certain kinds of things when the pandemic first started. For some folks, behavior might be forever changed.”

Budgeting As We Move Forward

Have you changed your spending and saving habits over the past year? For many, it wasn’t really by choice, since many things to spend disposable income on simply weren’t available or necessary. But are you busting to break out your wallet and get spending again? Do you agree that, according to Mike Kinane, head of consumer deposits, products, and payments at TD Bank, “As we get through the vaccine [and] start to see consumers being able to get back to normal, I do think we’re going to see a bit of a return to normal. There will be a pent-up demand for sure.”

It seems like people are ready to start spending again; in fact, one recent survey found that just over half of Americans plan to “splurge” after the pandemic, with most of those people (20%) saying they’re going to put their saved money towards a vacation. And, while it’s totally understandable to want to live it up a little when we’re once again able to, you also need to think about how you can hold onto some of your extra savings and how you can budget going forward.

To keep yourself on track now, and in the future, you should:laptop with numbers and graphs on it

  • Compare your spending and analyze where you are now – It’s definitely not the most exciting way to spend your afternoon, but it would be wise at this point to look at what you spent your money on and how much of it you saved in 2019, the last year of normalcy. Then, go through all of your accounts for this past year and see what you’ve been able to save and what debts have piled up. How different were those two years? This comparison will give you a good idea of what to expect when we return to “normal” (whatever that might be), as well as show you if you can put more money towards your savings, or if you need to cut down on spending in certain categories. Here’s a tip: try using a budgeting app to help keep you in the know about what you’re spending your money on! 
  • Stay smart about debt – It might be tempting to take advantage of all of those 0% interest deals on big purchases floating around out there now, but remember: debt is always a liability. Don’t let those “deals” tempt you into spending money on something you weren’t actually planning to spend money on. Whatever you borrow, at whatever rate, you always have to pay it back! So instead of offsetting your savings with extra loan payments, take advantage of low interest rates by:
      • Refinancing your home – Just remember to check the fees and try not to extend the life of your loan.
      • Speaking with your credit card companies – If you’re a customer in good standing, try calling them to see if you can get your rates lowered. Or, consider transferring your balance to a card with an 0% interest offer – just remember to have a plan to pay off the balance during the promotional period!
  • Examine your household expenses and see what you can trim – With a return to “normal” spending finally in view, now’s the time to try to reduce some of your bills. Look at your spending on:
      • Streaming services – Sure, it feels vital to have 8 different streaming platforms right now, but do you really need all of them? Take a look and decide which ones you really use, and consider ditching the rest.
      • Cell phones – Big name service providers are always changing their deals; in addition, there are tons of budget options available now that often use the same networks but charge only around $35 – 40 a month.

        hand with a car in a fluorescent bubble.
        Call your car insurance company and see if they are offering any discounts that can help you save more money.
      • Internet – If you’ve got a few different options in your area for internet service providers, call around and see what promos they’re offering – and don’t be afraid to play them off of each other!
      • Car insurance – Many insurance companies have been offering rebates and discounts for the past year, since people have been driving so much less. See if your company is offering any discounts, or if they can get you a better rate. If not, shop around, or consider lowering your premiums by raising your deductible.
  • Don’t go crazy! – Yes, going out to restaurants is great, but it’s also way more expensive than eating at home. As things start to reopen, enjoy yourself but then remind yourself how much money you saved by eating at home. Splurge now and again, but then try to offset your spending on food by bringing your lunch to work (or preparing it at home if you’re still working from home) or cutting out those daily coffee runs. 

No doubt about it, the last year has been rough. But let’s also try to focus on the positive! Maybe you’ve read all those books you’ve been meaning to read, maybe you’ve become an expert baker, or maybe you’ve just learned to appreciate time with friends and family. And maybe, just maybe, you were lucky enough to be able to put some money aside for a rainy day – because now we all know how easy it is for a storm to hit. There is hope on the horizon, so keep up your good habits and start planning for what’s next!