Faustinus Shikukutu
As a country with a high inequality rate, many black employees are finding it difficult to save or build generational wealth because they have become Automatic Teller Machines (ATMs) for others.
They face an additional ‘tax’ on their income in the form of support rendered to the extended family and sometimes to friends. The beep or alert of an incoming cellphone messages on payday has become both pacified and stressful in equal measure.
Pacified because it reports of the deposited salary but it is also stressful as it reports of messages from those who want to be bailed out. For many these messages become depressing especially if one is the only income earner in the family who also has to look after a widening list of direct and indirect dependents.
While it is not noble to enjoy the benefits of one`s success alone, especially without those that helped raise you, it becomes harmful when one is not able to provide for one’s needs. Black tax has gone beyond just financial needs from family members, friends and acquaintances but these days anyone feels entitled to anther person’s money or blames them for being more privileged.
The majority of the black working class doesn’t have unilateral power in deciding how to spend their money and this seriously impacts their lifestyle, and their ability to accumulate wealth long term.
The predicament
Black tax is a practice where an employed or successful individual supports members of their immediate and extended family financially. The term typically refers to financial contributions that black professionals are expected to make to less fortunate family members.
It is a part of one`s disposable income that goes to settling bills from parents, siblings, friends and even extended family members. While seemingly beneficial to those who are struggling, this puts a tremendous pressure on the individual to not only maintain their status financially but to grow it with very few resources which can increase financial stress or financial anxiety.
It restricts many to take on financial risks because financial failure for the individual has a ripple effect on those they support. It also makes it difficult for the majority to save money, which in turn, passes this tax down to future generations.
From the current reality and many conversations people are having about the subject, it is evident that our current approach to family members helping each other has become fundamentally flawed. Today’s black tax model is largely a cash transfer system, with an increasingly complex network of dependents and extending the list of needs for arguably diminishing base of income.
The failure to save due to this “tax” is leading many to a vicious cycle of generational dependence and mental health issues, especially for those who are not able to manage it.
The reality
The harsh reality about being black or African is that the deck is often so stacked against one that the weight of it all can feel devastating - no matter one`s income, net worth, or how much one has achieved.
While a few might enter the labour market with generational wealth and additional support from their parents, the majority face systemic inequities and generations of poverty which make it seem like whatever one is doing is never enough, especially when you know you’ll have to support relatives or make contingency plans for any number of scenarios out of your control.
Saving for tomorrow remains a dream to many as they have to support siblings or other relatives. You save a little, next thing you hear is: “We haven’t eaten for two days, send us something.” In truth, families should help each other but this so-called “black tax” has become a real burden as many are becoming depressed and contemplating resignation or early retirement.
One wants to help other family members, but also cater for own needs, and this becomes a tough juggling act.
Therefore, the majority who can generate wealth and reach a level of comfort is often also financially supporting family members or repaying debt. The inability to build up wealth means one is perpetuating a cycle where children will have to support ageing parents one day, whereas if one can invest, one will leave a legacy for the next generation and the chain of black tax will be broken.
How to manage it
In African culture especially, the issue of ubuntu black tax is almost unavoidable but one has a right to keep the total value of one`s income to himself or herself. Therefore, for those who find it difficult to manage this delicate balance between family expectations and their own needs which is a challenge, the following might be helpful:
Avoid becoming another person’s ATM; set the ground rules for what you can afford and stick to that; learn to say no, particularly if you cannot afford it and the situation is not life-threatening.
It is a very bad idea to go into debt just to help others; Don’t live beyond your means and go into debt because you want to impress others that you always have money; Make a budget for your black tax by putting aside a certain amount monthly and sticking to it which will curb excessive giving into demands of family and friends.
Finally, create a list and prioritise according to urgency or importance, remember that you are your priority and avoid being an ATM of others where you are forced to dispense the cash – only dispense it when you can do.