TAXING FAM­ILY IS­SUES

Sup­port­ing your loved ones is about mu­tual re­spect, writes

CityPress - - Business -

few weeks ago, I at­tended a break­fast with a group of women, where we landed up dis­cussing so-called black tax.

Ir­re­spec­tive of de­mo­graph­ics, most South Africans are sup­port­ing fam­ily mem­bers in one way or an­other. White South Africans are most likely sup­port­ing par­ents who have not put enough money aside for their re­tire­ment – the Old Mu­tual Sav­ings and In­vest­ment sur­vey found that more than 50% of white re­spon­dents ei­ther plan to or ex­pect to sup­port their par­ents or other fam­ily mem­bers.

For black pro­fes­sion­als, the bur­den is greater be­cause their sup­port of­ten ex­tends to sib­lings and ex­tended fam­ily. Of those sur­veyed, 80% ex­pected to sup­port fam­ily mem­bers.

When it comes to money, uni­ver­sal prin­ci­ples ap­ply ir­re­spec­tive of gen­der, race, cul­ture or in­come. In all cases, those sup­port­ing mem­bers of their ex­tended fam­ily need to find a way to jug­gle this re­spon­si­bil­ity with sup­port­ing their own fam­ily.

I want to share some of the con­ver­sa­tions we had at that break­fast, as well as the sto­ries of read­ers and friends who have had to find a way to strike this bal­ance.

THE RE­SPECT­FUL RE­LA­TION­SHIP

Nazeer’s par­ents did not have enough money to put away for their re­tire­ment. They al­ways strug­gled to make ends meet, but they in­vested in his ed­u­ca­tion. To­day, Nazeer is a suc­cess­ful pro­fes­sional and his sin­gle goal is not to end up like his par­ents.

Cre­at­ing wealth from a young age was im­por­tant to him. He de­layed start­ing a fam­ily and lived with his in­laws un­til the young cou­ple had enough money to put a sig­nif­i­cant de­posit down on a home.

How­ever, he re­spects the fact that he needs to sup­port his par­ents. Rather than just be­ing an ATM, he pro­vided his fa­ther with cap­i­tal to start a small fruit and veg shop, and also gives him ad­vice and sup­port for the business.

This has al­lowed him to main­tain a healthy re­la­tion­ship with his fa­ther, who is not re­ly­ing on his son for monthly hand­outs. Nazeer still “spoils” his mother by giv­ing her money each month to spend on her­self. He feels that she did so much for him while he was grow­ing up that he re­ally en­joys be­ing able to pro­vide for some lux­u­ries in her life – he re­cently bought her a sec­ond­hand car so she could have some in­de­pen­dence.

His sup­port for his par­ents is built into his bud­get and fi­nan­cial plan. It has not af­fected his goal of build­ing fi­nan­cial in­de­pen­dence, but it has meant he has for­gone some of the lux­u­ries his col­leagues may en­joy. This does not bother him be­cause he gets a great deal of sat­is­fac­tion from see­ing his par­ents cared for.

The idea of be­ing an en­abler rather than a provider came up as a cen­tral theme at the break­fast. Those who found a way to get their fam­ily to help them­selves rather than rely on them solely for in­come had a far health­ier re­la­tion­ship with their fam­ily, felt less re­sent­ful and could also im­prove their own fi­nan­cial wealth.

In some cases, the sup­port was pro­vid­ing some cap­i­tal for a small business, like help­ing them get fi­nance for an Uber car. For oth­ers, it was us­ing their net­works to help them find work. The best re­la­tion­ships are those where giv­ing is a joy, rather than some­thing that is re­sented.

THE ABU­SIVE RE­LA­TION­SHIP

Nicky is a young black pro­fes­sional whose mother places a huge amount of guilt and fi­nan­cial strain on her. Her mother be­lieves that now that Nicky has a job, it is her daugh­ter’s duty to give her the life she has al­ways wanted – she ex­pects new clothes and over­seas trips. When Nicky tells her she can­not af­ford it, she gets an­gry and says she is em­bar­rass­ing her in front of her friends.

This is clearly not a healthy re­la­tion­ship. When a par­ent be­lieves it is a child’s duty to re­pay them for what they have pro­vided (with in­ter­est!), the par­ent is for­get­ting that rais­ing and ed­u­cat­ing a child is ac­tu­ally their parental re­spon­si­bil­ity.

My son has a dis­abil­ity and, as a re­sult, we have spent an enor­mous amount of money on his ed­u­ca­tion and ther­a­pies. I re­mem­ber ques­tion­ing the ra­tio­nale of all the money we spent and the im­pact on our own fi­nances. My hus­band replied: “We owe him the best ed­u­ca­tion we can af­ford.”

We are not do­ing this be­cause we ex­pect him to pay us back one day, we are do­ing it be­cause it is our duty as par­ents, and be­com­ing his par­ents was our choice.

A par­ent who ex­pects their child to suf­fer fi­nan­cially to meet their ex­pected life­style needs is not be­ing fair. As one of the women at the break­fast said, she was only able to start look­ing af­ter her own fi­nances when she learnt how to say no to un­rea­son­able de­mands from her fam­ily.

In Nicky’s case, she needs to set bound­aries with her mother and work out how much she can af­ford to give her each month, and pos­si­bly even bring in a fi­nan­cial ad­viser as a me­di­a­tor. The mother, in turn, needs to live within her means.

IN­VEST­ING IN THE FU­TURE

Palesa has two younger sib­lings and she pays for their ed­u­ca­tion. This means she can­not put much money away for her own fu­ture at this stage, but she sees their ed­u­ca­tion as an in­vest­ment.

Firstly, with an ed­u­ca­tion, they are more likely to be­come fi­nan­cially in­de­pen­dent. Sec­ondly, once they start earn­ing, they will be able to help her sup­port their par­ents. Once her sib­lings are fi­nan­cially in­de­pen­dent, she will have more dis­pos­able in­come to start look­ing af­ter her own fu­ture.

Ed­u­ca­tion is def­i­nitely a fam­ily tax worth pay­ing, but it has to go both ways. If you are pay­ing for some­one’s ed­u­ca­tion, the stu­dent has an equal re­spon­si­bil­ity to work hard and en­sure they get the most out of it. Par­ty­ing while some­one else is fund­ing your ed­u­ca­tion is dis­re­spect­ful and abu­sive.

A fi­nan­cial ad­viser once told me about her own ap­proach to tough love.

As a sin­gle mother, she stretched her­self fi­nan­cially to ed­u­cate her chil­dren. She had a daugh­ter who was stu­dious and ap­plied her­self at univer­sity, but her son was an­other mat­ter al­to­gether. He spent most of his first year at univer­sity par­ty­ing and drink­ing. When he failed his course, she re­fused to fund his ed­u­ca­tion fur­ther. It was now up to him to sup­port him­self.

Faced with the prospect of pay­ing his own way, he de­cided univer­sity was not for him and found a job. Ed­u­ca­tion can be­come a bot­tom­less pit if you do not set bound­aries.

Apart from money, you can also pro­vide sup­port. Use your ac­cess to in­for­ma­tion to en­sure the stu­dent is study­ing an ap­pro­pri­ate course that will help them get a job. Help them get work ex­pe­ri­ence while study­ing by guid­ing them when they ap­ply for in­tern­ships.

Ask your em­ployer if the stu­dent can spend time in the of­fice to see what a cor­po­rate en­vi­ron­ment is like. Any work ex­pe­ri­ence, even un­paid, will give them an edge when it comes to en­ter­ing the work­force.

In South Africa, fam­ily tax is a re­al­ity, but it can also per­pet­u­ate a cul­ture of de­pen­dency, which is not sus­tain­able for the provider or the re­cip­i­ent.

Ac­cept your re­spon­si­bil­i­ties, but set your bound­aries and find grace and joy in giv­ing.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.