I was recently speaking to someone who is indebted to the tune of 7x their monthly income. Now, not all debt is bad debt. This wouldn’t be noteworthy if they had taken out all those loans to invest in their future: say to buy a house, move to Canada, or pay for a well-chosen master’s program. But in this case, they were concerned – and I was concerned, because they had borrowed the money over many months to meet family obligations.
My last Twitter thread about black tax, financial support young black people are expected to provide their families and extended families, elicited a deluge of comments. People argued about its definition, whether young people should “pay” it, and how it perpetuates poverty. I’m not getting into matters of definition or propriety. I’m instead focusing on how to manage financial support to one’s family so that it does not result in debt or create lasting resentment.
I have a three-step approach. The first is to determine how much you can share with your family. Ideally you would determine this as part of a balanced budgeting process where you also set aside enough money to meet your financial obligations and prepare for the future. The second is to let your important stakeholders know how much they are getting. You should select important stakeholders because it is unlikely that you can provide for everyone all the time. And you should let them know what they are getting so that they can plan for it and manage their expectations. The third is to stick to the amount you have determined except there is an emergency. There will be things that sound like emergencies but are not. There will be wants that are presented as needs. It falls to you to display backbone and stick to your ceiling.
I recognize it can be difficult to tell a beloved family member that you can’t send them any extra money this month. In my experience, we make it even more difficult for ourselves when we don’t budget and therefore don’t truly know what we can afford to share. In the absence of that clarity, we can feel guilty for not doing enough. But once you’ve done the work to consider it – would you rather let them eat your seed or plant it in hopes of a bumper harvest?
Another thing to consider is whether we can make things more sustainable over the medium to long-term. We all win when people can stand on their own feet. For example, if you currently send N20,000 a month (N240,000 a year) to support a hardworking cousin with a small business, are you able to send a one-off N120,000 to help them scale the business and therefore remove the recurring monthly obligation?
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What I’m currently reading: I’m still reading James Dyson’s Invention: A Life, from last week. I also loved A dog’s inner life: what a robot pet taught me about consciousness by Meghan O’Gieblyn. With a price tag of $2,899.99 (somewhere around N1.6 million), you can buy this robot dog that Sony claims has real emotions and instincts. The essay explores topics around consciousness and humanity. You can also listen to it here.
What I’m currently listening to: I’m going to expand the definition of “listen” a little by throwing in a movie here. (And not No Time to Die – which was very enjoyable). I quite liked Infinite, now streaming on Prime Video. I very often wish I could have seen the world centuries ago but still have my current life, and Infinite explores what that might be like and feel like.
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Have a fab week!
Koye.
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