This post is in honor of Women’s Money® Week 2017, a national campaign of social media and live events encouraging women to speak up about money, access to financial information, and to encourage them take control of their finances and reshape their financial futures, hosted by WomensMoney.org. Be sure to follow #WMWeek17 on social media for other posts this week and live events happening near you.
During my first summer internship, between my sophomore and senior year of college, I asked my American roommate to give me a ride to the post office to send money back home to my family in St. Kitts. Her reaction caught me off guard when she blurted out, “Well, that’s a role reversal!”
[clickToTweet tweet=”My roommate’s reaction to me sending money back home -‘Well, that’s a role reversal!’ #WMWeek17″ quote=”Well, that’s a role reversal! – My roommate’s reaction to me sending money back home…” theme=”style2″]
I was taken aback by her statement because sending money to family, as a Caribbean person living in America, was a common practice and it is not unusual for immediate and extended family members, to share financial resources among each a group extended families; minors, young and older adults alike.
I took on this “role reversal” again when financially supporting my parents who had recently immigrated from the Caribbean to the United States. By this time, I had recently completed graduate school and started my professional career and was facing $68,000 of credit card and student loan debt.
As of 2014, there are about 4 million Caribbean Immigrants in the United States (U.S. Census Bureau 2014 American Community Survey), a significant portion of whom are women, who support themselves, their immediate and extended families stateside and back home, in the Caribbean. That number does not even include the second or third generation Caribbean-American women, who also support parents or other family stateside.
[clickToTweet tweet=”4 million Caribbean immigrants in U.S.A. Many are women supporting family here & at home #WMWeek17″ quote=”4 million Caribbean Immigrants in the U.S. Many are women supporting family here & back home.” theme=”style2″]
For Women’s Money Week, I want to share how Caribbean Millennial women, who carry the responsibility of financially supporting themselves and extended family, like I have, can build a solid financial foundation for themselves.
1. Prioritize Your Personal Finances First
Although you might have a strong feeling of obligation to provide as much money as you can to meet the responsibility of helping your extended family, you must prioritize your personal finances first. When I started my first full-time job after college and grad school, these were the top priorities I had for my money:
- Investing for my retirement by contributing at least 10% of my gross salary, before my company’s match;
- Paying off my outstanding credit card debt and private student loans;
- Making extra payments on my Caribbean student loan; and
- Building up an emergency fund.
Once I identified these financial priorities, I had to take into consideration the amount of money I would need to assist my family, while they settled into their new life in Philadelphia. After that, I formulated a budget around the financial commitments I made to myself and to my family.
2. Put Limits On Your Support For Your Extended Family
It is important to be very clear with the family members receiving your financial support about how much money you can contribute, how often, and for how long. In my situation, my parents took longer than expected to find employment and had exhausted their own savings covering the essentials. When their savings ran out, it was clear that my support would go to cover housing and utilities and that my parents would continue to look for employment.
I committed to providing financial support until they found jobs, which took a number of months, and when I became pregnant with my son, I had to set the expectation that once I was on maternity leave, I could not provide the same level of support, as I would not have regular income during that time.
Having an open dialogue and setting clear expectations, as you experience your own life changes will enable you and your family to plan, prepare and shift gears accordingly.
3. Build Up Extra Cushion In Your Emergency Fund
Having an emergency fund becomes even more critical when you are supporting extended family. If you were to lose your job, need a major car repair, get a large unexpected medical expense, your emergency fund will help you cover those costs and stay out of debt.
Start by building up a $1,000 first and then continue to build up your emergency fund to 6 months to a year of expenses. This may take some time, but you must keep growing your emergency fund because in a time of need you likely will have to rely on yourself.
4. Keep Excessive Debt At Bay
If you are already dealing with debt, while supporting extended family, avoid taking on more debt and prioritize dumping as much of your existing debt, as fast as you can.
Explore ways you can lower your expenses or that of your family. And don’t be afraid to the get family members to do their part in reducing expenses and help you with in-kind support.
For example, my Dad was able to stay home with my son for a period of time and helped me save on childcare expenses.
5. Get Ample Insurance For Yourself and Your Family Too
If you have extended family members who are financially dependent on you, even partially, exploring life insurance and long-term-care coverage options, especially for parents, is essential. If you were to pass away, life insurance can provide funds to both immediate and extended family members who depend on your income. On the other hand, if a dependent family member or parent, for example, were to die and the associated funeral expenses would probably fall on you, their life insurance coverage can save you from the associated financial headaches.
I don’t like to think about my parents dying anytime soon, but after reading this story about how Mel Jones (the author of this article) would have to use her own home downpayment savings to assist her mother with funeral expenses after the death of her dad, it confirmed for me the importance of life insurance for myself and my parents.
If you are a woman who is taking on the responsibility of caring for aging parents or expect to in the future, purchasing long-term care (LTC) insurance for your parents, if they are eligible, is also something to consider. I have purchased long-term care insurance for myself and I help pay for LTC insurance for my mom (who, statistically speaking, will outlive my Dad), in order to plan for the future expenses of caring for her in her older age.
6. Take Care Of Your Physical and Emotional Health
The weight of the responsibility of your own financial obligations and those of your extended family can be a lot to carry and can negatively impact your health.
Make time to take care of yourself by taking breaks from your day to day routine and reaching out for help if you need it. It’s ok to reach out for counseling when it feels like too much to bear.
Have you supported family parents and extended members while taking care of your own financial life? What has been your experience. Do you think it’s a role reversal?
~ Melisa Boutin