Looking after family

How to cope with the cost of caring for extended family
Looking after family

Sipho shakes his head in disbelief. As the first graduate in his family he earns a good salary but he is now so deeply in debt that he can hardly sleep at night. In the same block of flats Chase is also wide awake wondering how he will cover his mother’s mountain of medical bills.

Both of them are in financial difficulties because of the people they love and have to support financially.

What are your obligations?

As a professional earning a salary you will discover very quickly you need to budget carefully to make sure that you are able to cover all your costs like rent, transport, utilities, accounts, study loans and stay out of debt.

One of your obligations could be that you need to look after family. This is not unique to black people or to South Africa.  However, because of our history as a country the need and pressure to take financial responsibility for an extended family is more prevalent in the black community.

This practice is commonly referred to as “black tax”.   I prefer the term “Sandwich generation” because it is more inclusive, while still referring to someone who is financially responsible for more than one generation which has an impact on their own financial wellbeing.

What is the impact on your financial wellbeing?

It can be a good thing to take responsibility for your parents, or help to put your siblings through schools and get a better education, as long as affordability and expectations are clear. It does not make sense to go into debt because as the only salaried person you are responsible for too many people.

If you are unable to save and acquire assets because you are looking after too many people, you perpetuate a cycle of poverty. You don’t save or look after your old age, therefore you children will have to take care of you, which means they won’t be able to save and so it carries on and on.

Being in debt because too many people depend on you for financial assistance will have an impact on your physical and emotional wellbeing as well. This in turn could have an impact on your performance at work and your relationship with your family because you might resent the expectations that you will automatically step in and help out.

Have a conversation:

If the financial burden of taking care of your family has become too much try and have a conversation with the people who depend on you for financial assistance. This will take courage and honesty and you need to prepare yourself for the fact that the discussion might become emotional. However, this might be the best way to change a pattern and ensure that everyone becomes more financially aware and responsible.

  • Agree that you will either contribute a fixed amount per month or that you will only help with necessities and not luxuries.
  • Make sure that everyone understands basic money management skills.
  • If you find that cash gets wasted rather contribute to fixed items like Funeral schemes, Medical aid or buying certain items yourself.
  • Money that is used for productive causes like education or entrepreneurial efforts has a much better long term impact than money spent merely for consumption.