Parental Support Part 3: Living Expenses

As we come to the end of the year and the #52WeekChallenge 2019 edition, this series of posts is supposed to trigger us to reflect a bit more deeply than usual as we make our 2020 money goals.

In this Parental Support series of posts, we are discussing how to handle the fact that many working-age children are expected to support their parents financially, in one way or another. In many societies, children are still viewed as an investment. Parents use their resources educating their children with the hope that those children will then start supporting them once they are gainfully employed. This expectation can be heavy financially and often stands in the way of the children gaining financial independence. The South Africans coined the term “black tax” that so accurately describes this financial burden and expectation.

How do we deal with this expectation, while pursuing our own financial freedom? The strategy depends on the nature of financial expectations. We have discussed how to deal with the expectation that you help with your siblings’ school fees, and how to handle medical expenses. Today’s post is about day-to-day living expenses.

The living expenses expectation often arises from two areas. First, if your parents are retired or are unable to earn an income for some reason, and secondly, if they are earning an income but it is insufficient to meet their living expenses. It is a complex need to address because unlike medical expenses which may come up once in a while (with the exception of chronically ill patients), or school fees which have an end in sight, this need persists for years, and possibly decades. Your “plan of attack” has to take this into consideration.

First, you should think about sustainability for the long term. This comes into play in two ways:

How sustainable their standard of living is. This means you must critically look at their living situation and evaluate whether there are ways you can support them to reduce living costs to either fit their income or to a level that does not compromise your financial future. Say for example if your parents are living in a rental property in the city, it might be more sustainable to do some heavy lifting and help them build a simple home in the outskirts or the upcountry to save on the rental cashflows. This is especially viable if saving them the constant rental expense means they will no longer need your support with the rest of the bills. The second more difficult bit to consider is speaking to your parents about financial management. In our society especially, parents are viewed to be wiser and well-positioned to be teachers. This flips the table on that, and it can be a cause for potentially uncomfortable discussions. But as I wrote before, part of being an adult who pays bills is being willing and able to have these uncomfortable conversations. Talk to them about drawing a budget, and managing their expenses.
If you can sustainably support them financially for the rest of their lives. This is a factor of your earnings and their needs. If the need is minor relative to the cash you can spare, then this may not be a problem. However, in many instances, children have to forgo saving and investing to fund their parents’ living expenses which is not sustainable. If you are in this position, you have to think about the investment you can make in the short term that will see them become financially independent. When I floated the question of sustainability on Twitter, many people responded that they handled this by asking their parents to propose a business venture they can help them fund, that would sustainably sort them out for good.

The final point is that you must always involve your siblings if you have any. In a family, there is always that one child that is easy to talk to, that parents come to whenever they need that help. If you are that child, do not feel obliged to carry that burden alone. Always rope your siblings in to help.