Paycheck Chronicles

Gold Diggers and Deadbeat Dads

As you've probably noticed, I love taking stuff I read and applying it to our military lives.  My friend Valerie Rind has a "gotta keep watching the train wreck" site about things that can go wrong when you mix finances with family.  (I hope everyone knows that I mean that in the nicest possible way.  I love the site.  But reading it is like watching something bad happen.)

At Gold Diggers and Deadbeat Dads, Valerie profiles individuals who have had family situations wrecked by financial issues.  In my experience counseling military families, this is a common theme.  You have the usual divorce  and child support issues.  One topic, however, seems to be relatively unique to military members and famous people:  family asking for financial help because they think you've got tons of money.

It takes more than both hands to count the number of military members I've met who are struggling with their own finances but are sending money home to help support parents, siblings, and even further family member.  I understand the desire, and I think it is awesome for a person to want to help their family, but this is a terrible idea on many levels.

Creating Dependency

Sending regular financial support to a family member builds a situation where that family member comes to expect this support.  This can decrease their desire to find ways to support themselves.  It creates lifestyle inflation, where the person is used to living in a way that their own income can not support.  Lastly, what happens when the sender is no longer able to provide the support?  This can happen for any reason:  job loss, their own financial messes, even death.  The receiver is suddenly floating alone, with no resources and no history of figuring out how to take care of themselves.  Do you want to put your family member in this position?

Digging Your Own Hole

If your money sending is creating trouble in your own finances, then you have an additional problem.  Not only are you creating dependency in the person receiving the money, but you are creating trouble in your own world.  A persistent budget shortage can result in the growth of debt, negative credit histories, and personal hardship.  It can even affect your employment, if your position requires a security clearance or clear financial history.

It is admirable to want to make life easier for your family, but sending money is rarely a good solution.  (Of course, there are exceptions for anyone who is truly unable to care for themselves.)  Sometimes people look at military folks and it looks like the finances are easy, particularly if they come from a disadvantaged background or don't have a lot of life experience.  You need to be smart enough to know that you can't afford to be providing support unless you have no debt, a balanced budget , significant emergency funds, and a solid, long-term financial plan.

When you are traveling in an airplane, the flight attendant always instructs that "in event of emergency, please put on your own oxygen mask before helping others."  The same thing is true of providing financial support to family.  If you want to provide financial support to your family, you need to take care of yourself first.  Only then can you provide true help to others.

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