Question: Hi Sir Randell, I’m a millennial employee. Having read your articles, I know it’s important to save for retirement early. However, I also want to support my family (my parents and my younger siblings) financially. Is it possible to do both? —Joseph, via Facebook
Answer: I’m glad that you’re looking out for your retirement while still being concerned about your family’s. In such a close-knit family culture like the one we have here in the Philippines, it’s natural to want to help out. But oftentimes, in their desire to help, a lot of people ignore their own financial health—and that’s not good. Here are a few steps to take if you want to support your family and save for your own future:
1. Put the mask on yourself first.
If you’ve been on any flight (and you actually pay attention to the flight attendants’ pre-flight instructions), you know that when the oxygen masks drop, you’re supposed to put the mask on yourself first before you help put the mask on others. It’s the same for your finances; before you can help anyone else, help yourself first. Do you have an emergency fund? Is a portion of your salary going toward retirement already? Are you free from high-interest debt like credit cards? If yes, then you can step up and contribute to your family. If not, take care of your own finances first.
2. Get life insurance.
Your contributions are vital to your family, so it makes sense to protect yourself with life insurance in case you’re unable to work. You can consider term life insurance plans, which provide coverage for serious illnesses and death for a certain period of time. You may also consider health insurance or HMOs if health is a major concern for you.
3. Know your family’s financial situation inside and out.
Knowing your family’s financial capabilities will help you keep better control of your own finances. What do they need help with? How much do they need to pay whom? This may not be an easy conversation to have, but it’s important so that you don’t overextend yourself, and they don’t become reliant on you at the expense of your own future. When you know how much money they truly need, you can measure it against what you can provide as assistance, and you can provide for them while saving for yourself.
4. Set limits.
Exactly what monetary help does your family need? How much will they need from you monthly, and for how long? What is the maximum you can provide for them? What are their financial goals? Setting these markers down will ensure that you stay on your financial track while still being able to help your family. When you help, make sure it is not encouraging the habit of dependency and entitlement.
5. Teach them good money habits.
Like the old saying about teaching a man how to fish, teaching your family good financial habits will be much more help to them in the long run than simply giving them money. Help them set a budget so they can meet their expenses, or assist them with finding money-making opportunities so that they can sustain themselves with minimal help from you. This way, they can have their own sources of income other than just you—freeing your finances up so you can save more, build your wealth, and be in a better position to help them out if more financial setbacks arise.
Discussing family finances is not the easiest thing to do, but it’s very important if you want to help your family while still helping yourself. Improve your finances and get yourself on solid ground before you commit your resources to helping out. It’s important to be there for your family, and by following the steps above, you can ensure a good future for yourself while getting your loved ones on better financial footing.
What does the bible say about these things?
We should honor our parents—“Honor your father and your mother, that your days may be long in the land that the LORD your God is giving you.” (Exodus 20:12, ESV).
EDITOR’S NOTE: This article originally appeared HERE. Reposted with permission from the author.