FAMILIES & FINANCES

My generation is sometimes called the sandwich generation. Now this may sound delicious (Sandwiches? Where?) but it actually refers to the fact that so many of us are expected to support children, but also our aging parents.

Because of history and culture, this expectation is felt most acutely by black South Africans, so it’s sometimes called ubuntu tax or black tax (although it can happen to anyone).

Ubuntu tax often doesn’t mean supporting just parents, but also extended family, siblings and family friends. This isn’t necessarily a horrible thing. We love our families and it can be a privilege to help look after their wellbeing.

If you’re in the position of supporting a number of other people right at the start of your career, then I’m sorry there’s all this extra pressure on you. It’s unfair.

I’m sure no one knows better than you do about the difficult compromises you have to make every day.

You may be in a position to offer financial support right now, but this doesn’t mean the relationship is necessarily lopsided. Remember what they tell you in aeroplanes: “Make sure your own oxygen mask is secure before attempting to help those around you.”

It’s no good being so generous in the moment that you’re compromising your own long-term financial security. If you aren’t saving enough for your own retirement, you’re just perpetuating a cycle.

It’s okay to have limits to your generosity, even when it comes to family.

When we think about family tax, it can be helpful to reframe the narrative: thinking about building intergenerational wealth for your children and their children.

Most difficult things are easier if everyone talks about them as honestly as possible. Make sure you and your siblings and your parents have had some honest conversations about the expectations you all have of each other.

Do your parents expect to live with you when you own your own home? Do you expect your parents to leave you an inheritance? Do you expect your older sibling to help pay for the schooling of your children, if they make more money than you?

These conversations are awkward, but it would be more awkward to discover way down the line that you’ve been working off completely different assumptions. The more you know about what your family will need from you over the coming decades, the better you can plan for these needs in your financial plan.

By having deeper conversations with our families, we can also get out of the trap of always offering short-term support but never actually improving their long-term financial situation.

If you understand their money world, you might be able to offer more meaningful forms of help than just money. You could help them find a job, or figure out how to apply for better types of credit, or get a better return on their long-term savings. You can teach the other people in your family to have as healthy a relationship with money as you do.

Avoid signing surety for loans in someone else’s name. Things can go horribly wrong and your own credit record can be irreparably damaged, along with the relationship. Rather help them to apply for credit in their own name from a reputable institution, or give them the money directly.

If you give a loan to family, call it a loan, but in your head, think of it as a gift. It’s not worth ruining love over a loan that doesn’t get repaid.

Lastly, this can be difficult to talk about, but make sure your parents have a will that’s clear and unambiguous. No one wants to be grieving and simultaneously fighting with siblings over inheritance.