An unexpected windfall—a windfall, an inheritance, or a lucrative new job—can bring great opportunities. But it can also attract unwanted attention. Friends and family may come to you with financial requests, from small loans to investment opportunities.
Setting boundaries is important. You don’t want to damage the relationship, but turning down these requests is often necessary to protect your financial future.
1. Keep Your Windfall Quiet
The easiest way to avoid being asked for money is to not share what you have come in for. Although it’s tempting to celebrate, news of your financial fortunes can travel quickly, prompting requests from strangers.
If you can’t keep the windfall secret—perhaps it’s widely known, like a public salary—be specific about your plans. Say you’re consulting with counselors or taking time to figure out what’s best. This simple answer can help discourage questioners.
Pro tip: If you have more than $100,000 in savings, SmartAsset offers a free service to match you with trusted advisors for expert guidance.
2. Let the Professional Be the Bad Guy
When applications come in, one effective way to divert them is to direct people to a financial advisor. A third party can act as a gatekeeper, saving you from awkward conversations while providing expert evaluation of the application.
Many financial advisors specialize in helping clients handle investment questions. If a friend or family member does not follow up, the request may not have been serious. And if they do, the consultant can intelligently evaluate the idea.
Pro tip: If you have more than $150,000 in savings, consider talking to a professional financial advisor. Zoe Financial is a free service that matches you with professionals in your area.
3. Don’t Feel Guilty About Saying No
Turning down requests from friends or family may feel uncomfortable, but remember: your financial health comes first. It’s okay to say no, and you don’t owe anyone an explanation beyond a polite response.
Try something like, “I’ve already committed my resources elsewhere,” or, “I’m focused on other priorities right now.” A firm but kind tone will show that your decision is final without being offensive.
If you are pressed further, repeat your original statement. Limits are important here, and sticking to them will help prevent upsets and enable you to invest wisely elsewhere.
Pro tip: This may be a good time to consider investing in wine and whiskey. Vinovest can get you started with as little as $1,000.
4. Evaluate Business Ideas Carefully
If you are considering a loan or investment, take a step back and evaluate the idea honestly. Treat the proposal as a business deal, not a favor. Ask for a detailed business plan and think about the risks: What happens if the business fails? How will it affect your finances?
Another way is to offer a short-term loan with competitive interest rates rather than a gift or a large equity stake. Financial advisors suggest modeling how the loan fits into your financial picture to make sure you won’t be outdone if things go south.
Pro tip: Use a high-yield savings account to build financial security before taking investment risks. Check out SoFi’s savings options.
5. Create Clear Terms of Investment
Set clear goals in advance if you decide to invest in a friend or family member’s business. Explain payment schedules, interest rates, and strategies for getting out of a legally binding agreement. Without a plan, you can find yourself stuck in an illegal investment.
Most personal investments in businesses do not have defined exit periods, meaning you may not be able to withdraw your money when needed. Set boundaries in writing to protect yourself while helping others.
Pro tip: Another modern way to diversify is through real estate and venture capital. Companies like Fundrise, offer investments as small as $10.
Manage Funding Applications with Confidence
It’s natural to want to help those you care about, but managing the windfall responsibly often means no. Whether you’re keeping your fortune a secret, deferring requests to a counselor, or vetting ideas carefully, these strategies can help you protect your wealth and relationships.
Stay strong in your decisions and prioritize your long-term financial health. Helping yourself now may allow you to help others later—on your terms.
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