Personal Finance 

When Should You Put Yourself First with Your Finances?

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SelfishWe’re often told that selfishness is a real problem. We’re supposed to be helpful to others, and giving.

In our society, giving to charity and helping family and friends are considered virtues. But are there times when it makes sense to be a little selfish? Maybe putting others first, especially when it comes to money issues, isn’t the best plan.

Sometimes you need to put yourself first.

Help Yourself Before You Can Help Others

“On an airplane, during the in-flight safety demonstration, you are always advised to put your own mask on before you put on someone else’s,” says Julia Chung, CFP, with Facet Advisors Wealth Strategies. “Finances work the same way. If your finances are not sufficient to take care of your own lifestyle, you are simply not in the position to take care of the lifestyles of others.”

Chung points out that there are lots of circumstances in which others ask for your help — but it’s probably best not to give it. Here are some of the situations that Chung recommends that you stay away from:

  • Helping a friend out of a bad credit situation: “This can be highly dangerous, affection your own credit and increasing your personal debt to levels you cannot manage,” says Chung. This can also include co-signing. While you might not be giving money to help, you could be putting your own credit on the line.
  • Someone’s great business idea: Perhaps a family member or friend has a great business idea. Should you jump in, just to help out and be nice? Chung says to treat your buddy’s business idea as you would any other investment, which means asking tough questions and evaluating it on merit. Don’t be afraid to say no if you don’t think the idea is sound.
  • Adult children and their bills: “I absolutely understand the occasional small loan for groceries when they’ve really mess up in the first year or two of independence,” Chung says. But she warns against letting your child become too dependent on your assistance. “If they have not yet learned how to manage their money, you are not helping them by simply paying their bills.

It’s also worth noting, with kids, that they have a longer time to recover from financial setbacks. The popular mantra is that there are student loans for college, but no loans for retirement. You need to make sure you’re squared away first.

Helping in Other Ways

“If you’re interested in helping someone out,” continues Chung, “stop for a second and review your situation. What is your net income? What are your personal expenses? Are you putting away the funds you need to meet your personal objectives?”

You don’t even have to help by giving money if you don’t have the means. “Give some though as to whether or not your help should in the form of money,” Chung says.

Whitney Sparks, a financial coach, agrees. “Sometimes you can give things that you got for free or cheap out of your stockpile,” she points out. “Sometimes you can give people a listening ear or a kind word. Sometimes that means more than any amount of money!”

In the end, you might need to be selfish if you want to maintain your good financial situation. And, overall, that kind of selfishness doesn’t always translate into true selfishness: Once you’ve got your financial house in order, you’ll be able to do so much more for others.

What do you think? Does it make sense sometimes to put yourself first? When have you put your own finances first?

(Photo: Mark)

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One Response to “When Should You Put Yourself First with Your Finances?”

  1. Terrence Forest says:

    Great Post!! I have found myself in a lot of financial jams because I loaned somebody money or helped somebody out only to find myself needing that money later on. I absolutely agree with getting your finances right first before trying to save everyone else.

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