Black tax survival guide: Getting your financial groove back

Black tax is more than just a popular phrase among Mzansi breadwinners, it’s a definitive term describing the lived reality of most young black South Africans who often carry huge family financial responsibilities on their own.

Being the bearer of many ‘firsts’ can be burdensome.

First to go to university, first to graduate and first to get a stable job – these achievements often come with implicit obligatory tags attached; providing for immediate and extended family members.

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Adding to the financial strain is SA’s rising living costs, high interest rates and volatile economic environment, leaving less money left to go around.

‘Handle black tax like a pro’

‘Handle Black Tax Like a Pro – Setting Boundaries, Improving Relationship and Achieving Freedom’ author Ndumi Hadebe said recently at the PSG Think Big webinar, that black tax is the “elephant in the room” waiting to be addressed.

Hadebe said having honest, transparent conversations about finances and setting clear boundaries are key to dealing with the emotional aspects of black tax.

Setting clearly communicated boundaries

“In South Africa, where black tax is prevalent, these discussions are pivotal in navigating the way forward and bringing healing to financial situations,” she said.

Hadebe said this may entail sharing a breakdown of your monthly budget.

Cautioning against the fine line between letting people know of one’s situation and needing approval, the author said disclosure of finances doesn’t necessarily mean asking for permission.

“Because when you ask for permission, you disempower yourself,” she added.

Hadebe said that being assertive is the ultimate key to setting clear boundaries.

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Acknowledgement and accountability

If you’re the party providing financial assistance, Hadebe advised starting by taking responsibility for your own part in creating the “problem.”

“We talk about [black tax] at dinners with our friends and our colleagues, but we don’t afford our families the right of reply,” Hadebe said.

“I feel this is the biggest shortfall we are making,” she added.

The author suggested calling a family meeting to inform your dependents about your true financial situation, and admitting to bad financial choices you might have made such as getting into debt.

“These open conversations allow for a degree of transparency where the reality of one’s financial situation can be brought to light,” she said.

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Committing to a financial plan

Hadebe advised working with your family to come up with a financial plan and minimise expenses – said the responsibility doesn’t rest solely on the shoulders of the breadwinner.

“Better financial planning towards a specific set of measurable goals will allow families to work together in a way that is intentional and deliberate,” she said

When it comes to living beyond your means, Hadebe said it’s important to evaluate your lifestyle and financial choices.

“Solutions need to be practical to really have the desired impact,” Hadebe said.

“Perhaps it means spending money less frivolously when it comes to gifts,” she added.

Letting go of “luxuries we can’t afford” can help in coping with economic tough times.

“We need to be strategic and deliberate about managing our money,” Hadebe said.

“…And to do this, we need to commit to delayed gratification,” she concluded.

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