National Treasury’s response to Eskom can be a lesson on managing family demands.

You get a call from a family member who urgently needs money for some emergency. Your finances are stretched, and you have already provided support to the person. How do you handle the situation?

You could approach family demands in a similar way to how National Treasury responded when asked by Eskom for more money. What bigger crisis could there be than running out of diesel and plunging the country into darkness?

Yet National Treasury laid out the facts: this was not in the original budget and to fund this additional request, money would have to be taken from other areas of the National Budget – like wages, education and healthcare. This is not something to be done lightly.

For many working professionals, the financial demands of extended family can put enormous pressure ‒both financial and emotional ‒ on their own household.

While you might feel some responsibility to help out, those supported family members need to acknowledge that there are limitations to how much you can help. When it comes to family demands, expectations and boundaries need to be set up front.

In its response to Eskom’s request, National Treasury explained that “the staggered nature of the budget process, which allows for well-informed planning about how to allocate the country’s scarce financial resources, makes it difficult to consider and accommodate any ad-hoc funding requests outside of this process, especially large requests that are made at short notice.”

This statement could be a great template to use when engaging with family requests. You could look at your family commitments as if they were a state-owned entity:

• Request a budget: Ask that the family member submits a budget and includes expected expenses which will arise. Once you have this information, you can make an informed decision as to how much you can allocate from your own budget each month to support them. Make it clear that you will honour this commitment, but that this is all you can provide. As much as you need to stick to your own budget to meet your obligations, family members who depend on you should also stick to a budget.
• Set boundaries: Explain that if there are to be additional financial requests, those must be planned for. You would need several months’ warning so that you can budget for this additional payment and that it may not always be possible.
• Have a policy for external requests: Decide how you will handle ad-hoc requests from extended family that you don’t have an ongoing financial arrangement with. This can either be a blanket “no” or you can request that if they have a specific need, they provide you with a budget detailing how they currently spend their money, and explain that you need time to consider and plan for these requests.
• Prepare for emergencies. There will always be emergencies that cannot be planned for. Even in the national budget there is a contingency reserve to cater for unexpected and urgent expenses. Apart from having an emergency fund for your own finances, start one for your family to cover emergencies such as hospital bills or funerals.
• Build an education fund: Many educated professionals recognise the benefits of assisting younger relatives to become educated and therefore no longer dependent. While the student may qualify for NFSAS funding, there are always additional costs such as registration fees etc. You can create a savings account to help fund these future expenses or connect with working professionals from the same community to create an education fund. This fund can be used to support qualifying students in the community.

Tools to assist with medical and educational family demands

Prepaid medical card: Oyi

Medical costs are one of the biggest expenses when it comes to family support, especially if you have elderly parents. One way to plan for these expenses it to have a prepaid medical card that your family can only use for legitimate medical expenses.

Oyi is a payment card that you can pre-load and give to a family member which can only be used at medical providers, including doctors and pharmacies. There are no monthly fees for the card, but it comes with a once-off R100 delivery fee and charges R5 per transaction. Any top-ups via EFT or banking apps are free.

The card allows for a limited credit facility if there aren’t sufficient funds immediately available to fully cover a doctor’s bill or for medicines. For medication, an advance fee of R5 plus 25% of the borrowed amount is charged and for a doctor’s bill an advance fee of R12.50 plus 25% of the advance amount is charged. For example, if the card-holder needed to pay a doctor’s bill of R200 and the card was empty, the loan amount of R200 would attract a total fee of R62.50. This means that a total of R262.50 would need to be repaid. Any future top-ups would first be allocated to repay the borrowed amount.

While the advance fee is high, considering that most credit facilities such as credit cards and overdrafts have monthly credit facility fees of R69 a month in addition to service fees, it could work out more cost effective to use the Oyi facility for a short-term loan.

Pay for education by spending: School-Days

If you are helping to educate family members, you could earn points towards school fees by swiping a School-Days card at participating retailers. You can also top up the account with direct contributions. Anyone can top up the card, so various family members could club together to boost the education fund.

Every time you shop at Dis-Chem and Baby City you earn points which can be used to fund school expenses. Other partners include NetFlorist, King Price and CarLicence. When you join School-Days and you choose your family as your beneficiary, the Edu-Time Points (ETPs) you earn by spending at partners are stored in your School-Days account until you’re ready to use them to pay towards your family’s education fees.

When you are ready to use your ETPs, simply contact support@schooldays.co.za and request a redemption. School-Days will pay the registered education institute on your behalf.

Crowdfunding for education: Feenix

Feenix is a crowdfunding platform for students in tertiary education. After the student has registered on the Feenix website, their profile is verified to make sure they are a bona fide student. The student creates a profile in which they tell their story – how much they need, what they are studying etc. They can reach out to their communities, friends and family, individuals and businesses, who can all contribute to that student’s funding goal.

As Feenix is a Public Benefit Organisation, all bona fide donations are tax deductible. Anyone other than direct family can download a section 18A tax certificate if they donate to a student.

The funds are paid directly to the tertiary institution, so the student never gets to handle the money themselves. This is a great way to ensure that the funds go towards the student’s education costs.

This article first appeared in City Press.