In my financial counseling with military service members, I see a lot of kind and generous folks who are sending money home to Mom, Dad, their siblings or their aunties and uncles. The ability to help out family can be a beautiful thing, but often these folks are coming to see me because they can't take care of themselves and their family at the same time. When that happens, it can become a burden.
There are many social, emotional and cultural considerations around family and money, and often service members are seen as the financially stable member of their family. Whether it's sending money home each month, being asked to co-sign a loan or serving as the family emergency fund, all can create strain on the military member. While we can't solve all the problems with family and money, you can use some smart strategies to ensure that your generosity is a blessing, not a burden.
Put on Your Own Oxygen Mask First
If you've ever been on an airplane, you've heard the part of the safety brief where they say, "If you are traveling with children and we experience a decrease in air pressure, put on your own oxygen mask before helping others." I've also heard the idea said as, "Tie your own shoes before running to help others." Both are great explanations for the concept of helping yourself so that you're capable of helping others.
If you choose to help provide financial support for family members, be sure that you take care of your own financial responsibilities first. There are several reasons this is important.
- Your needs are important, too.
- If you get into a financial bind, you may not be able to help your family when they are depending on it.
- Financial instability can impact security clearances, which could result in separation from the military -- and an inability to help in the future.
Be Honest About Your Ability to Help
There often is a perception that the military member is making a lot of money. We all know that isn't true, especially for junior folks. Don't be shy about explaining that you don't have an unlimited budget. This can be hard, but it is an important conversation. "I don't have the money" is a perfectly reasonable statement.
Put it in the Spending Plan
Just as you should have separate pots of money for expenses such as car repairs and travel, put family giving in your spending plan. If you're sending money on a monthly basis, be sure that you can support that in your overall spending plan -- after you've taken care of your essentials. If you're helping out occasionally, create a separate savings account and make small contributions each month so that you're prepared when help is needed.
Give with a Gifting Mentality
Consider every contribution to family as a gift, without expectation of repayment. This is important because you don't want to get into a situation where nonpayment creates a strain in family relationships. If you get repaid, that's a bonus.
Apply this idea to co-signing loans, too. Can you afford to pay the entire amount of the loan, if necessary? Would you be happy about it? Don't co-sign on a loan that you don't expect to repay in full. If you are totally comfortable paying the full amount if the borrower doesn't, then maybe it is OK to make an exception to the rule that you never should co-sign for a loan. But never co-sign for a loan feeling confident that the borrower is going to pay, because nothing is guaranteed.
Don't Create Dependence
This one can be tricky to manage, but try to give in a way that doesn't encourage long-term dependence. This may mean paying a one-time or short-term cost vs. agreeing to send home money on a regular basis, or paying specific bills (like the electric bill) directly instead of just sending a lump sum.
Obviously, no one wants to see their loved ones struggle. But it's important that your help is a positive thing, and that you aren't creating more problems in either your life or the lives of those you are helping. Taking care of your own financial stability first can give you the ability to help even more in the long term, and that's a good thing.
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