Taking Care Of Yourself First, Financially

November 18, 2012 | Kate Horrell

Many of us have ridden on airplanes, where the flight attendant instructions always include a part about putting on your own air mask before helping others.   It only makes sense:  you can’t help others if you can’t breath yourself.  I find this to be a super analogy for many things, but since I’m a money geek, I especially like the way I can apply it to finances.  It is vitally important that you take care of your own financial security before helping family, friends, and others.  If you don’t, you will soon need help yourself and won’t be able to help the people who rely on you.

In my financial counseling, I see numerous financially troubled servicemembers who are regularly sending money home to help their families.  This is a delicate situation.   Most of them really want to help their families, and that is a noble instinct.  However, if helping others is bankrupting you, then you are hurting yourself, and ultimately you are hurting your family as well.  It is essential that you get your own finances in tip-top shape before you start supporting people outside your nuclear family.  (Yourself, your spouse, your children.)

So, what can you do?  First, just like anyone else embarking on a financial plan, you need to figure out your current situation.  Make a list of all your income, debts, monthly payments, and bills.  Don’t forget those bills that come less than once a month, like car insurance or vet bills.  Look at a month’s worth of income, and make a spending plan.   Be sure to include all debt payments and other bills, plus money for things like hair cuts, coffee, and all the other things that eat money.  When you think you’ve gotten everything, check out Where Did The Money Go? to see what things you’ve forgotten.  Don’t feel bad – we all forget expenses.  It is human nature.

Once you’ve listed all your expenses on your spending plan, see how that compares with your income.  This is always an interesting part.  Most people, myself included, discover that either there is no way they can pay all those expenses on that income, or that they are supposed to have a lot of money left over at the end of the month and they have no idea where it has gone.

If you are in the “too many expenses, too little income” category, you are not in a position to be helping your family right now.  You’ve got to get your own money under your control so that you can help others without hurting yourself.  You might be able to make some changes quickly so that you can continue to help now, but more likely you will need some time to make yourself stable.  You will need to tell your family that you can’t help them right now.  I know this is hard, but telling them that you can’t help temporarily NOW is way easier than telling them that you can’t help permanently LATER.  And honestly, if you are sinking while helping, then eventually you will reach a point where you can not help at all, ever.  I’m pretty sure that is not your goal.

If your spending plan shows that you should have money left at the end of the month, but you don’t, then you probably need to look over Where Did The Money Go?  again.  Your money is being spent somewhere.  It isn’t just disappearing.  It’s like a treasure hunt.  You can use a variety of tactics to find out where it is going, either by collecting receipts or keeping a spending log or taking a picture of everything you buy with your smart phone.  Whatever works for you, just as long as it does work and helps you find out where you are currently spending your money.  Once you know where that money has actually been going in the past, then you will be able to decide how you want to plan your future spending to include sending money to family.

As I said before, I know this is a sensitive subject.  However, if you aren’t financially stable yourself, then you are hurting your family and yourself by trying to share your money with them.  You need to be debt-free, have appropriate emergency and retirement savings, and the right kind and amount of insurance before you can be trying to help other people.  Otherwise, you are participating in a vicious circle where you are the helper now, and you will need help in the future.

If you need more help, please check at your service’s family services office (Airman and Family Readiness Center, Navy Fleet and Family Service Center, Marine Corps Family Services, or Army Community Services) to have a talk with one of their personal financial readiness counselors.  This is important for you and for the people you are trying to help.