When your family’s financial emergencies are your financial emergencies

I remember meeting with someone for brunch a few years ago and she shared with me her experience with a financial advisor she recently met with. She had brought her budget and they were reviewing it together. The financial advisor seemed to have an aha moment and said, “it looks like you’re sending $500 to your brother every month. If you just stopped doing that, you’d be able to save!”

She left the advisor’s office and it took years for her to seek out financial advice again.

One of the realities we’ve learned working with our POC clients is that more often than not, you are the first generation in your family to go to college and most likely earn more money than many of your family members. You may be helping pay for your mom’s rent or be responsible for the family cell phone plan. You are probably someone people turn to when there is a family financial emergency.

This is the reality of being a #firstgenkid. You’re not going to stop giving money to your family so you can save money, but you also need to take care of your own expenses and future so you don’t find yourself doing the same thing to the next generation. The responsibility is heavy and it’s a tenuous and stressful position to be in. Just know your resilience and sacrifice don’t go unnoticed.

So if you’re not going to say no, how do you plan for that? One of the strategies we often ask clients to consider in these situations is to set up a family savings fund. This is a separate savings account where you set aside a regular amount each month that you can dip into for family emergencies.

You can either send this money to your family member each month or set up a joint account where your family member can access it as needed, or save it until an unexpected emergency comes up.

When a client’s mom needed additional support several years ago, she started sending her $300/month. After her mom was able to access public services and social security, she didn’t need to send her a regular monthly amount, so instead she redirected the same $300/month into a separate savings account so if her mom needed her brakes replaced or an appliance broke, the client could use the money already sitting in that account.

Most likely, family members will be coming to you for last minute help because they really don’t want to be a bother. They’ve exhausted all other options and needed to come to you. This family savings fund gives you some control over situations you have no control over. You know your family is going to need financial help, but you don’t know when. You know you’re going to help them, so now you know how.

When the funds run out, give yourself permission to say you can’t this time. Because you actually can’t. Giving more would put your own finances in jeopardy. Set up this family savings fund and know you’ve done everything you could and lived your values while also putting on your own oxygen mask first. Your family and your future self will thank you for it.

If you want to learn more strategies for how to build generational wealth as a POC, email letsbrunch@brunchandbudget.com and we’ll put you on a waitlist so you know when our See Change program opens its doors again.

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