NICOLETTE’S NICKELS:
One of the biggest unspoken burdens young professionals face is that of Black Tax. Not the simplified "I send some money home" rhetoric, but the true essence of having to consider your extended family with every financial decision you make.
Considering that many South African households do not have generational wealth, the first ones from the house to "make it" cannot indulge in their income selfishly but must share a portion of it with the family to keep them living sustainably. Nor can they make individualistic financial decisions as these have a ripple effect on the family's financial trajectory.
Black Tax is a phrase you hear joked about by comedians and overlooked by people of privilege, but it truly is a real struggle for many, as they may need that money to start their own businesses, save for investments, or merely feed their own mouths.
However, as mentioned in my book, “What's your move – a collection of ordinary financial lessons”, I feel that Black Tax is as complicated as trying to generalise personal finance. Each person's situation is different, so there is no one-size-fits-all solution.
Back in 2017, my baby sister had just passed matric and was preparing for her first year of tertiary study. She came up to Johannesburg, and I had to take time off work to accompany her to register. At the tertiary institution, we were given the registration amount she needed to pay immediately so that she would be able to commence with classes, pay for textbooks and buy the computer software she needed. I remember sending a text to my father requesting this amount – in all fairness, I was embarrassed sending this text. I was her big sister – why was I not able to pay this amount for her? You see, I had been brought up with the mentality that as an older sister, at some point, my younger siblings' financial needs would be taken over by me. This was not a conversation I ever had with my parents, but I had some sort of pressure to take up the responsibility. At that moment, I realised that sometimes Black Tax was not an external expectation due to entitlement but rather an internal pressure I had placed on myself.
A huge misconception about Black Tax is that it is done to manipulate the paying person. Spending any amount of your own money on another person will always feel like you are prejudiced. And the last thing you want to feel is resentment towards your family due to this. Aunts and uncles may tell you that they changed your diapers when you were a baby, that they fed you when they did not have money, and for that reason, you should help them in their elderly state. You may also find that, within your social circles, other people always talk about giving to their families, so you feel guilty, and if you do not give back, you are not playing your part to the societal notion of ubuntu.
Unfortunately, no one can ever force you to give from an empty cup. You determine your budget, so you can determine how much you are willing to give. There are healthier ways to approach Black Tax, ways that are not as daunting.
One, you can see it as an investment. You contribute financially, knowing that in the future you will receive your return tenfold. For example, you may have a cousin who needs petrol for his car. You could then give your cousin petrol, and in return, he fetches your child from school after work whenever you are unable to.
Two, you may view Black Tax as a way of giving without expecting any quantified return. This is probably the truest to ubuntu as Black Tax can be. For example, you see a need at home for financial assistance, and you genuinely want to help out of love and care for your family, which is self-satisfying on its own.
But how can you best prepare for Black Tax? Do your research. Read and find out how the general society perceives Black Tax and how other people are managing it. You can have a conversation with your immediate family members and tell them that you will provide what you can, but they must not make you feel as if they are entitled to your money. In the conversation with your family, do a needs analysis and plan for the Black Tax. My sister was in matric in 2016 – everyone was well aware that she would be in varsity the following year. Her registration fees could have been planned for through saving. Finally, set financial goals to know how much you can actually give without financially depriving yourself.
Remember that you need to live within your means. Money does not grow on trees, so you cannot just go into your garden, and voila, your pocket is full again. Create a budget plan for the month, and determine where your money needs to go without anyone pressurising you. Instead, you pressurise yourself because you genuinely want to help your family. Black tax can be favourable if you approach it in a healthy and financially savvy way.
Nicolette Mashile is the co-host of the SABC1 talk show Daily Thetha, an actress on Generations and the founder of Financial Bunny, a financial literacy platform. She has recently written a book, What’s Your Move? A collection of ordinary financial lessons.
PERSONAL FINANCE