TIPS TO HANDLE THE FINANCIAL RESPONSIBILITY FOR YOUR FAMILY

Taking financial responsibility for your immediate or extended family can be taxing. We find out from a few experts how you can manage this obligation better

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In the 90s, rapper Notorious B.I.G had a hit called ‘More Money, More Problems’. Yip, having money comes with problems. This is especially true in the black community when it comes to the cultural phenomenon known as ‘black tax’, a subject that in the last few years has been hotly debated and unpacked across social media platforms. Millennials and Gen Z in particular have become increasingly vocal about its impact on their lives.

Ndumi Hadebe, author of Handle Black Tax Like a Pro, points out that previous generations didn’t call their financial assistance or obligation ‘black tax’ – they just contributed in whatever way was required from the family, “whether there were entitlement issues or their assistance was appreciated or not. They just did it because refusing or setting boundaries was viewed as being stingy, mean or arrogant.”

But based on her observations of people she’s coached, she says: “Gen Zs tend to be stricter with their boundaries compared to Millennials. Gen Zs tend to have a heightened sense of their needs, wants, thoughts and feelings – therefore, they are more aligned with their boundaries compared to generations before them. Even though Millennials may know boundaries, they are more likely to betray themselves by saying yes when they mean no."

Perhaps it is selfish or arrogant to resent supporting your family financially, but the tide is turning and the burden and expectations of 'black tax' are being publicly and heatedly debated. What the recipients of 'black tax' may not have taken into consideration in the past is the financial and psychological burden placed on the 'tax' payer, as well as the impact it has on their personal goals and aspirations.

In the current socio-economic climate, breadwinners are contending with paying off student loans, personal debt, the increasing price of petrol and food, and rising interest rates. The reality is that most entry-level jobs for young professionals offer very basic salaries, and even for those who have work experience and secure jobs, salary increases may still come in below inflation. So, it would not be an exaggeration to say that 'black tax' is simply becoming unaffordable.

"There are many families where black tax is happening but remains an elephant in the room, where the payers feel it would be inappropriate to express their strong views and feelings about the situation:' says Ndumi.

To avoid this, and also avoid setting yourself up for financial ruin, she advises "having a peaceful and honest conversation with your family about your financial situation. Do not portray a picture that you have lots of money if you are drowning in debt."

She adds that "the conversation should include how you feel about the cycle of poverty or whatever financial or spending pattern you've observed in the family, and how you would like it to be addressed." She further advises that you do not jeopardise your own financial goals: "Be honest about what you can assist with; don't commit to what you can't afford. Avoid at all costs getting into interest-bearing debt, like personal loans and credit card debt, just to fund black tax requests."

Ndumi says most of us do not know how to set boundaries or how to have difficult but necessary conversations with our families —especially about money. What she often sees with clients that she is coaching is people paying black tax and resenting their families, which creates unhealthy family dynamics or people being passive-aggressive when asked for money by family members because they are scared of confronting the issue.

@jenn.nxumalo Saving as a family is just as important as saving alone, it might lesson the burden of the Black Tax. #blacktax #savingmoney #financialmaturity #southafricafinance ♬ original sound - Jenn Nxumalo

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Handle Black Tax Like a Pro - Ndumi Hadebe

Black Tax: Burden or Ubuntu - Niq Mhlongo

You’re Not Broke, You’re Pre-Rich - Mapalo Makhu

What's Your Move? - Nicolette Mashile

Set Boundaries, Find Peace - Nedra Glover Tawwab

In her book You’re Not Broke, You’re Pre-Rich, Mapalo Makhu recommends that you also do the following:

• Make family members accountable by making them differentiate between wants and needs.
• Remind learners and students whose fees you may be responsible for to work hard so that they can become financially independent too.
• Encourage family members who can work to get part-time jobs or start a side hustle to generate income.

“For most families the topic of money brings up various emotions, including shame, secrecy and anxiety. But communication is key. Planning is all-important,” writes Mapalo.

Words by: Thando Pato
Photos: Gallo/Getty Images, Supplied.