Aug
Articles, Building better men, Finance
How To Navigate Through Black Tax
Most young ‘black’ professionals carry the burden of being the “first everything” to their families, which means that they have to take care of their families financially. This concept is known as “Black Tax”.
In formal terms, Black tax is a term for financial support that a professional or entrepreneur of colour is obliged to provide to their family on a continuous basis outside of their own living expenses.
Yes, it’s the correct thing to do to support your family and loved ones financially, but at some point, it may affect your financial growth. Especially when you’re living in an economy that is tough to live in. So you have to be very careful and strategic with your financial decisions.
Here are a few ways you can conquer black tax even in this economy because you’re a champ!
Learn how to set boundaries
Let your family members understand that you have a boundary with how much or how far you can go with financial support. For example, if you’re supporting a cousin or a sibling, you can give them a limit of how many years you plan on offering your financial aid.
Have open money discussions
If you have grown up in an African family, you know that topics of money are taboo and forbidden. But when you think about it, a lot of financial issues are brought about due to a lack of financial transparency.
Create an open and safe environment where you and your family can have honest discussions about your financial situations. Be vocal about your current situation as well as your aspirations. This will help avoid a lot of entitlement around your finances as a supporter.
Equip your family with financial resources
Educate them and provide them with financial resources they can use to better their understanding of finances.
Pay yourself first, champ!
This basically means putting your income into your savings and investments first before spending it on expenses or leisure. Put yourself first! Get your finances in check and then you can in be in a better position to help where you can. At the end of the day, you can’t serve from an empty plate.
Read our article about paying yourself first here: PAY YOURSELF FIRST
Do you agree with the idea of Black Tax? And how can other people create more boundaries around Black Tax?
Let us know what your thoughts are in the comments section below.
Until next time Gents!
Article inspired by: https://www.withkoa.com/blog-posts/lets-talk-about-black-tax
Every black person knows how it goes: there’s the normal tax every South African citizen has to pay then there’s black tax – the burden of having to share your salary with every family member until you have nothing left to save or invest. Frankly, you’re lucky if you have anything left to carry you into the next month.
Black tax is the reason why most young people dnt progress in life if people do not put boundaries to it. A young professional is supposed to be realistic and set boundaries when it comes to black tax.
The question on black tax is that is it an investment or a burden?
While many might see black tax as a burden on individuals, it also has a pivotal socio-economic role to play. It lifts families out of poverty, uplifts communities, and builds generational wealth.
If my family had not subscribed to this system of sacrifice, if my older brother and sister had not contributed once they had graduated, we would have never gone to university and I would have never become an investment professional. My life and that of my siblings would have turned out very differently. But we defied the odds, collectively, and we broke the cycle of generational poverty, of scraping by, thus allowing us to concentrate on the long-term goal. Today I have the generational wealth to start my adult life.
Black tax becomes a burdern if there is a lot of expectations from the family members to be supported. I have learnt to set my budget straight, take care of myself first and then take care of black tax. One should not stop developing self simply because there is black tax. Do that second degree. Upgrade yourself. Take that post graduate course. It is impirtant.
In your budget, list your fixed expenditures, monthly deductions and income. If your expenses are more than your income, you need to look for ways to cut down. Make sure you leave room in your budget for savings too.
The issue of ‘black tax’ can make it extremely difficult to save, compared with those who don’t have to shoulder the financial responsibility of taking care of extended family members, such as parents and siblings, even grandparents and grandchildren.
What causes black tax?
Black tax is a term that originated in South Africa for money that Black (or other person of color) professionals provide to their family every month outside of their own living expenses, usually out of obligation. It is caused by continued economic imbalance that can be traced back to apartheid and slavery.
I am 100% behind supporting family. However, sometimes we get abused in the process and end up being in debt all because one cannot say no. I have learnt to set boundaries and say no without feeling guilty. That is healthy.
This is a very sensitive discussion for me because just today l am typing this comment with a heavy heart. I love my family and l do whatever l can to support them but sometimes l feel like parents feel entitled to our money and they can blackmail you for saying no. It is sad that sometimes as young people we do not progress in life because of this black tax.
Lesson learnt from all this is that you definitely need to learn to say no without feeling guilty and set boundaries. Thank you Manbox.
This is a very powerful yet deep topic. We’ve seem many families fall apart in the name of money. Parents often feel entitled to their children’s achievements and expects them to take care of them financially because mostly of their sacrifices that they made to get where you are.
I want to say it is okay to support your parents financially as long as it doesn’t affect your progress in life about the things you want to accomplish(financially). As soon as you are not meeting your own requirements with your own money because you’re financially assisting family members, then that’s where the problem lies. Set boundaries and be firm at all times. If someone loves and appreciates you, surely they can understand!
Yeah black tax is real and it’s time for us men to wake up and get real. Set boundaries and boundaries again. If you don’t set limits you can’t pay yourself. Thank you manbox I’m definitely going to share this article with my friends they need to hear this.