Keep those you support in the loop on your finances

South Africans are more than familiar with the joys and the strain of having to look after extended family. Stretching the rand further than what is considered humanly possible is a lot of people’s lived experiences. This is commendable and something that should be celebrated, if only it didn’t come at such a big cost.

With impending job losses and an extended lockdown, the strain is going to be more pronounced. We’re all under pressure to keep afloat, and having to extend ourselves even further to look after members of the extended family may just be some people’s undoing.

It will take tough decisions to survive the next few months. Will it still be possible to help those you care about without jeopardising your own financial wellbeing?

What of the family members with unreasonable demands and no accountability? To have any hope of getting through the Covid-19 pandemic and the lockdown intact, we’ll need discipline from both ourselves and the family we support.

Agree upfront

I teach children about money whenever I can. A lot of literature (and experience) shows that once you condition a child regarding your financial abilities and the cost of living, they become more reasonable and less demanding. The same goes for the people you look after.

Let your “beneficiaries” in on how much it actually costs to live the life you do. You could also give them an idea of how much you earn in relation to your expenses, if you are comfortable doing so.

The income you divulge needn’t be the exact figure. It just needs to give them an idea of how little wriggle room you have.

The next thing to do is to get a full picture of your beneficiary’s needs and, from there, work out how much you can provide.

Agree upfront on the amount you are prepared to part with and make it clear you cannot give any more than that.

You may have a responsibility to look after your family, but they too have a responsibility to look after what you give them.

Schedule it

Create a payment schedule that you can honour and that your beneficiaries can get accustomed to. Make it fixed, like a salary, on the same date of every month. Predictability and consistency allow for better planning for both you and your beneficiaries.

Get a mediator

As an adviser, I often see instances of unhealthy benefactor-beneficiary relationships. I’ve met a few clients who’ve forgone retirement savings and many other important acquisitions in a bid to support their families.

In many instances, it is clear that the benefactors simply cannot afford to support themselves, let alone their families — but are afraid to speak up. In some instances, benefactors create unnecessary dependencies and unreasonable expectations by not setting boundaries.

Either way, getting a mediator to review your situation may provide you with a muchneeded fresh perspective. They should also be in a position to review your budget, which may help you plug any unnecessary wastage.

Your mediator can also help you to have difficult conversations about money with the family you support, and this could ultimately benefit everyone involved. It will help if your mediator is well versed and experienced in the subject of personal finance.

When all else fails …

… stop funding. If none of these remedies are of help and you’re still having to contend with financial strain and unreasonable family members, it may be time to consider cutting them off financially.

If you don’t, you are aiding their behaviour and enabling dependency with no responsibility, while ruining your finances at the same time. In the long run, you’re causing more harm than good.

As mentioned, helping is a good thing and should be celebrated and encouraged, but not to your detriment. And certainly not when it enables unhealthy financial habits in those it is intended to assist.

If you have to cut down on your lifestyle expenses, so does everyone else. It’s not a great conversation to have, but it’s one that is absolutely necessary.

Keep everyone affected by your income, or lack thereof, in the loop.

Sidaki, a certified financial planner, is director and wealth manager at Wealth Creed