Financial Smarts For The Future Firefighter
While reading this morning’s Sunday paper, I came across an article in the Business section written by Susie Orman, recognized expert in personal finances, that I believe many current and future firefighters can learn from, especially in today’s economy.
She talked about a few key concepts:
1. You’re not entitled to an allowance.
2. A household requires cash to function.
3. You don’t need to spend every dollar you’ve saved.
4. You may not be able to afford the college of your dreams.
Now, let’s tie the above into the fire services and the world we currently know:
1. You’re not entitled to overtime. Too many firefighters (no different than many Americans) live from paycheck to paycheck, and rely on overtime to make ends meet. When I started in the fire service, we used to get one overtime shift every few months. Up until recently (and even in some departments) many firefighters can work at least once a week extra if they want to in some departments. However, that overtime can dry up at a moment’s notice. If you can’t live on your base salary (no overtime), then consider a 2nd job, having your significant other work, or decrease your lifestyle requirements.
2. Just like a household needs cash to function, so does a city and a fire department. Since personnel costs (wages and benefits) usually make up over 90% of a fire department’s budget, and because police and fire budgets usually take up 50 to 75 percent of an overall city budget, it’s not too difficult to see that when lots of money needs to be cut (because the expenditures exceed the revenue), how police and fire are going to be targets. Nobody ever wants to lay off people; but when the money just isn’t there, eliminating a secretary or a mechanic or trying to reduce costs around the fire station by buying cheaper toilet paper are equivalent to throwing a deckchair off the Titanic. They don’t equal that much savings, as much as eliminating companies, laying off personnel, or requirement significant wage and benefit reductions. I’m not saying I’m a fan of laying off personnel or taking pay or benefit cuts (who is?); I’m just saying when times are tough like now, there are very few options to reduce costs and we have to recognize that.
3. It seems when times are good, and cities or fire departments have extra money in reserve (I know, not now – years past), that everyone thinks that money needs to be spent on raising salaries, staffing and/or benefits. Reserves are there for that reason – as a rainy day fund. Well, many cities and fire departments have spent the reserves and are well into the negative and if you haven’t figured it out by now, it’s raining. The problem is reserves only last so long, even when you’re very cautious of how they are spent.
4. Instead of her concept of affording the college of your dreams, maybe we all can’t afford the staffing levels or the number of stations or the fancy stations or fancy apparatus of our dreams. I would love it if we had fire stations on every corner, and 10 personnel on every rig. However, we don’t and at this point, I think many of us just hope we keep what we have today (which is usually much less than 10 or 20 years ago. However, if the money isn’t there, it isn’t there. We have to learn to make do and “do the best we can with what we have to work with.”
The above is not meant to be negative; it’s meant to be a reality check for all of us since the “reset button” has been hit by the economy in general. Instead of complaining about what we should have (that may or may not ever return), I think it’s critical we learn how to make do with what we have. That doesn’t mean to work in an unsafe manner to attempt to compensate for what you don’t have. Instead work in a safe manner with what you do have to work with.