Are Toxic Relationships Keeping You From Your Financial Goals?

Identifying Who Your True Friends Are Could Be the Secret To Understanding Your Financial Woes

By Anthony Rhodes

Are you a Caretaker? This is a financial profile classification, which identifies an individual who allows the actions of others to consistently place them in poor monetary situations. A Caretaker would, for example, take money, which they have allocated to pay for their own household needs, and instead, give those monies to a friend to help them to pay for theirs. Now, before you begin to think that this is yet another Conservative assault on altruism, please allow me to clarify. The deficiency of a Caretaker is not their desire to aid those around them who are in need, but is in fact, their inability to distinguish a toxic relationship from a healthy one. This shortcoming unfortunately permits them to be disproportionately taken advantage of by those who would seek to do so, while at the same time, placing them in a state of financial turmoil.

Sound familiar? Perhaps it should. That’s because Caretakers are a lot more common than many of us know, and most of us would even care to think about. In fact, a large percentage of you reading this post today are either aware of someone who fits this description, or fall under this category yourselves. This week, we’ll attempt to offer some solutions to help identify whether your finances are struggling as a result of this condition, and will also seek to unravel whether your “friends” are those of the healthy variety, or are of the toxic kind.

A Friend in Need

We all have someone in our lives who often seems to show up when he or she is need of a financial fix. Perhaps this individual is a lifelong friend; whose festive manners or childlike whimsy usually offsets the annoyance experienced whenever they come calling for cash. Or maybe a fellow co-worker, who constantly reminds you of the time they helped you out of a financial bind, whenever they’re in need of monetary assistance. Even an ex-boyfriend, girlfriend, husband or wife may show up during a financial shortfall. Truth be told, we all, at some point in our lives, need someone to lean on every now and then when our money is a little tight. But does this activity alone qualify a relationship as financially toxic? Let’s think about this briefly. First of all, what clearly constitutes a financially toxic relationship is the absence of reciprocity. This simply means that you find yourself doing more, and more often for an individual than he or she does for you. There’s nothing wrong with aiding a friend in need during a period of financial crisis, but what would make such a transaction toxic would be if the same individual rarely offers their assistance when your money is in short supply, and if he or she seems to have a financial “crisis” a little more often than normal.

Like Crabs In A Barrel

A financially toxic relationship can manifest itself in other ways, as well. If you find yourself attempting to gain a greater footing in life by saving or investing, and individuals who are non-supportive or critical of your efforts surround you, this relationship is toxic also. Such persons may not negatively impact your finances traditionally by borrowing money and never attempting to pay it back, but their emotional effect on your financial success is nonetheless just as poisonous. When dealing with this situation, it’s important for you to remember both that misery loves company, and that some people who have accepted their lower financial status in life are accustomed to mediocrity. Their desire for comfort creates an environment in which complacency is the rule of the day, and your attempts to escape from this setting triggers a “crabs in a barrel” response from all those who support this flawed mentality. My advice for dealing with such individuals is simple, short and direct: Move on! Don’t allow their contagious ideas to infect your visions of success. It matters not if these people are family members, life-long buddies or spouses, their attempts to keep you grounded to their level will eventually become successful unless you put forth a serious and steadfast effort to distance yourself from their toxic influences.

Caretaker or not, I hope this post prompts you to re-evaluate your financial relationships, and to make appropriate changes where necessary. You must come to the final and profound conclusion that the individuals, circumstances and conditions in which you surround yourself with, can have a dramatic and longstanding effect on your personal finances, living conditions and monetary habits. Let’s not underscore the importance of this fact. And if your road to success requires you to take it alone, that’s ok also. At least you’ll know when you get there, that you didn’t have to pack any excess baggage along the way.       

(Anthony Rhodes is a Registered Investment Advisor and owner of wealth management firm The Planning Perspective