1. Avoid indiscriminate giving. Make sure you have a strategy around giving, he says. Otherwise it’s just charitable giving and sets unreasonable expectations for relatives and friends to get something for nothing.
A good rule of thumb is to set aside up to 10 percent of your total wealth for emergencies, he says. Other methods include using tax refunds to assist relatives in need. When they run out, it’s important to let family know that you will be glad to help out again next year, Cousin says.
2. Develop plans for sustainable giving. This could be in the form of endowments or trust funds that set requirements for withdrawals, including college and graduate school degrees. “The funds can be intergenerational, for kids currently in college and beyond that,” Cousin says.
3. Invest in dividend-paying funds. Cousin established a college fund for all the kids in his family, which teaches them about the importance of financial planning and investing.
4. Monitor social media. Friending friends and family on Facebook, Twitter and LinkedIn can be good and bad, says Cousin.
“Some friends and family can be vile on your social media pages,” he says. “So it’s important to monitor what is being posted because donors and investors in your business will evaluate you based on your social media profile. At some point you will be looking to get a loan or a line of credit and the last thing you want them to do is to put your name in Google and have cousin Pookie coming up in the searches talking trash.”
It’s OK to block friends and family who exhibit reckless behavior on social media, he says.
Cousin adds: “Everyone has their own individual things that they are passionate about in their giving. As soon as you have wealth, family and friends believe they were instrumental in getting you to that point. They have been friends with you, kept you out of trouble, etc., and they feel as if you have a long-term debt to them. That’s just not the case. You can and should establish boundaries for giving to friends, family and other relatives. If not, it could break you.”
Lynette Holloway is a contributing editor at The Root.The Chicago-based writer is a former New York Times reporter and associate editor for Ebony magazine.