Limited research has been done on the phenomenon of black tax, according to academic researcher, Gilman Whiting, it is a cost that is incurred by black people because of circumstances not experienced by their white counterparts. Black tax relates to the financial burden borne by black South Africans, who have to provide financial assistance to their immediate and extended family. This is an important concept because of the scale of the support required, given the large size of black households and the extent of poverty experienced by these individuals.
For many, there isn’t a way to avoid black tax because their families rely on them for their survival. Even though, there is no avoiding it, there are ways to better manage it. We have provided four tips to help you manage your black tax.
1. Incorporate it in your budget
This is to ensure that you are always prepared and that your black tax expenses are taken care of and do not derail your other financial goals and responsibilities.
2. Finance living essentials and investments before luxuries
Prioritise things your family members can’t live without such as food, electricity and education before financing luxuries such as expensive cellphones and sneakers fro your siblings.
3. Be realistic with your family and yourself
Sit your family down and explain to them what you can and cannot afford. It is also important to set boundaries to ensure that you stick to your word.
4. Empower your family to be financially independent
It is wise to keep in mind that any financial support should be given with the intention of assisting the recipient(s) in achieving financial independence in the long run. Long-term financial dependence on anyone is a precarious slope and can become a comfort zone for some. By assisting them with budgeting, providing educational articles on managing debt and saving, getting them access to professional financial guidance, etc., you may help individuals you support develop their financial independence and resiliency. Therefore, releasing the financial burden on you.
Also see: Simple ways to be more money savvy in 2023
