Black Tax: Sink, Survive or Thrive!
I have always thought, “Where would I be if I didn’t have the extra financial responsibility of taking care of my loved ones back home?” I frequently think of all the times my savings amounted to something and then something happens that requires me to send money home. I think of all the ewallets I really didn’t want to send, but how could I sleep at night knowing that my loved ones were not okay. I think of all my friends who have lost their potential spouses because no one wants to be with a person who is eternally indebted to their family.
At the Moshal Scholarship annual event this year the keynote speaker said something that to this day doesn’t sit right with my spirit. He made a conditionally valid argument about how we view Black Tax. He stated that “by calling it tax, we are giving it negative connotations and making it feel like a burden”. I say that this is conditionally valid because, if your Black Tax(BT) is paying for your parent’s vacation then yes, that is beautiful. It’s not tax, it’s a way of showing appreciation, it’s a love language. But for a lot of Young Black Professionals(YBP) BT is more than that. It’s being the breadwinner for a family of 5+ on an intern’s salary, having to be a savior at home and not being able to disclose your mental condition to the people who are closest to you.
There is a certain aura about graduation that makes Black communities feel that their struggles are over. You have done the impossible, and now “Chicken Licken will fall like Manna from Heaven”. This is soon to be followed by the the defining realisation that your entry level salary is not going to change your family’s situation overnight. Even after graduating from the best institution in the continent, or even the world can leave you one foot out of poverty.
Some of the best advice my bursary co-ordinator Nozuko Mzamo told me before I started working was that I would have to have a difficult but crucial conversation with my family about money. Money is a difficult thing to talk about, even more so when expectations are high and it’s your first time talking to your parents as an adult.
I have compiled a list of things that have helped me somewhat thrive in my first year as a YBP and paying BT.
Disclosing your salary
Honesty is the best policy in my opinion, but you are an adult now so you are allowed your own “Affairs”. Disclosing your salary is something you should not be doing recklessly, especially to your loved ones. It’s something you only do as a strategic move that benefits you. Say it with your chest, “My salary is MY BUSINESS and my business ALONE”. Disclosing your salary can sometimes mean, this is our budget. Leading to questions like “but you earn xxxxx, surely you have an extra R500.00”, “how can you finish xxxx on your own?”.
Is your family financially responsible?
Being well off and being financially responsible are very different things. My mother, who earns significantly less than my father can do so much more with her salary. When it comes to making money go further she is my G, she gives the best financial advice. She even stops me from sending money if it means crippling my balance. It’s important to determine if your family is in a position to give you sound financial advice, else you need to speak to a professional and learn financial literacy. Research financial planners like Lifecheq, SA Financial Planners or Netto and look through their various options and decide on one. They will help you with your budget, supporting your family, paying SARS Tax, medical aid and so on.
Make sure you have a budget that works for your financial goals as well as being able to take care of your family. The last thing you want is to look back on ten years of “working twice as hard” and not having anything of your own to show for it.
You don’t have to be a hero
Being able to help your family get to a better place is everyone’s dream, but if you take on that responsibility too early it can easily become a crippling burden. The most important thing is for you to understand that you are not a superhuman. With an entry level salary there is only so much you can do. Sometimes you are going to be able to help and sometimes you won’t. That’s just a reality.
It really annoys me how financial institutions are using BT to manipulate YBP into taking out loans to prove their success. The same institutions whose advertisement’s only feature YBP also charge YBP higher interest rates and mark us “high risk”. It perpetuates the stereotype that unless you have bought your first car or built your parents a home, you are not successful, even if you are drowning in debt and your credit score is six feet under. Give yourself time to build up a good credit score, delay taking out a loan as long as possible. The less debt you are in, the better.
Strategic Black Tax
What exactly does it mean to “help” your family? First of all, you are not obligated to helping your family, you are a child, your family is responsible for you and never the other way around. Should you CHOOSE to be there for your family financially, you should go about it strategically. NB: Every financial decision you make should be strategic! I chose to help with my brother’s education because it’s fulfilling, it also has a deadline and it’s the gift that keeps on giving. The distinction here is that I am not giving my brother money, I am actively empowering him instead of creating a dependency. I also help at home but most of it is towards education. I only buy my little sister clothes when I have reached my financial goals. Which brings us to the most important part:
Having financial goals outside of your family.
I know that as Black children we are taught to prioritize family but you also need to remember that you have your own life to account for and you may one day have your own family, thus you need to plan for that. The last thing you want to do is live “pay cheque to pay cheque” and find yourself making your children pay BT or have to move back home after being “temporarily” laid off. It’s important you have your own financial goals, buying your own house, going on vacations, retiring early, investing, starting your own business. All these things require planning and you need to plan for your own future. This will help fight BT Fatigue: when you feel that you have been endlessly helping but the situation is not getting better. Your long term savings and investments may be the key to your family’s financial freedom.
And so follows the most important question for our generation:
ARE YOU FREE OR ARE YOU DOM?