How do I make my parents financially independent?


Black tax may be viewed as a way of repaying for being brought up in an African home. PHOTO | SHUTTERSTOCK

My parents are financially dependent on me. How do I make them more independent? I want my own family and my parents to be independent.

The Good Book says, “A good man leaves an inheritance for his grandchildren.” The implication here is that the man has enough to cater for his children, thereby having a surplus for his grandchildren.

So, what happens when the roles are reversed, and the children take over the responsibility of taking care of their parents and siblings? How do we build generational wealth while our current income is stretched to the limit?

Let’s talk about the elephant in the room: black tax! Black tax is prevalent in African homes, and it refers to the contributions that a perceived or financially stable person must send home in support of one’s parents and siblings.

Black tax may be viewed as a way of repaying for being brought up in an African home. This applies the concept, “To whom much is given, much is expected.”

Although supporting one’s kin is noble and should be encouraged to foster goodwill, it may lead to bad blood between family members as it now becomes an obligation.

When a young person is compelled to support his/her family before becoming financially stable, it may stall personal growth and affect one’s person’s social life.

The question is, where do we strike a balance between supporting our family, showing kindness, and encouraging generational financial dependence?

If not adequately dealt with, back tax has emotional, social, and financial ramifications.

Walk with me as I let you in on what would work for you and your family in an ideal situation.

Introduce a revenue-generating activity for your family

Introduce a value-adding activity back at home. Look around your family for any potential business that you can set up or advance.

For instance, you could try commercial farming or rearing domestic animals that can bring income such as cows, chicken, and goats.

Learn your area and establish what could work for you based on your disposable income. Setting up an income-generating activity will not only keep your family busy, but it will instil financial discipline and reduce over-reliance on you.

Have a reasonable time limit that you can support

For any initiative to work, it is important to ensure that you have targets and time limits that you can use to track your progress.

Once you set up a business or start farming with your family, politely give a timeline for things to stabilise before withdrawing your support.

While you do that, give maximum support in terms of skills and expertise to ensure that the business becomes sustainable.

Develop a long-term financial plan that you can follow

If you fail to plan, you certainly plan to fail. It is important to develop a long-term financial plan that can guide you. Have a 360-degree view of your life; marriage, finances, school, and housing.

Where would you want to be in the next, say 10 years? Such activities require money, and it is imperative to have a plan on how you can achieve your goals.

Having a long-term financial plan will limit your distractions and you will only channel your money where you have purposed to.

Have a budget and stick to it

Ensure that this financial aspect is covered in your budget and not as a miscellaneous expense and stick to it. If you have planned to give Sh10,000 to your parents each month, commit to following that.

Putting this in your budget ensures that it is not an afterthought and you do not become destabilised each time you send money home. The budget will also ensure that the financial discipline trickles down to your family members.

Educate your family on financial management and discuss it often

You must learn to deal with the root cause of issues to effectively deal with them. Do an introspection to understand why your family cannot seem to be self-reliant.

Could it be that they make poor financial decisions? Do they lack empowerment or skills? How can you solve that? Help your family to draw up a budget that they can stick to, you may be surprised that they do not need your help after all.

You may also spot loopholes that may be eating away your family’s resources and seal them immediately; that way you will have finally dealt with generational dependence.

Get your parents a medical cover

Get a medical cover for parents to cater for any medical emergencies. If your parents are salaried and are about to retire, encourage them to purchase a pension plan such as an income drawdown which can give them cash flows on a regular basis.

Medical emergencies also tend to consume so much cash in the sunset years and it is advisable to acquire one for your parents so that you can adequately deal with any emergencies.

Family is the basic unit of society and giving support is noble and emotionally fulfilling. However, there are countless ways that you can support your family.

Try to make constant communication to build a relationship that transcends paying bills and giving money. Cultivate an open communication that assures your family members that you love them and encourage them to find ways of becoming stable and prospering without relying on you 100 percent.

Saying No is essentially saying yes to you. Learn to stand by your word and honour yourself enough to stick by the standards that you have set for yourself, and others will follow suit.

Ms Kibata is an investment analyst at Zamara and can be reached via [email protected]

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