Evergreen Content

'Black Tax'... working hard, earning well, but struggling financially

As a country with a complicated and difficult past, many parents, families and even communities have sacrificed much to give their children the best chance at getting a decent education and a start at realising their dreams.

Although these efforts continue to benefit individuals and communities, Kanyisa Ncemane, General Manager: Customer Solutions at Old Mutual Personal Finance, points out that they also inadvertently create a cycle of financial responsibility.

Findings of the 2017 Old Mutual Savings and Investment Monitor support this, citing that 70% of working metro South Africans are currently supporting, or foresee that they will have to support older family members in the future.

This responsibility is colloquially known as “black tax”.

Ncemane explains that black tax is linked to complicated emotions and must be approached delicately.

“While many of us are thankful for the opportunities we’ve received – and want to repay this in some form – our success can also come with a sense of guilt,” she says.

--

Busi*, 27, an electrical technologist earning R560 000 a year, shares her salary with her grandmother and cousins.

“There is a great deal of anxiety that goes hand-in-hand with the responsibility to support your extended family while at the same time building your career and trying to achieve your financial goals,” says Busi.

While she accepts the responsibility of helping to care for her family, it can be overwhelming.

“The irony is that my own financial success is essentially on hold because of my financial responsibilities.”

--

Ntando*, like Busi, shares his income with his family: his mother and father, and younger sister.

In his early thirties, he works in an art curating position at a top gallery, making R280 000 a year.

When he is not travelling for work, Ntando lives at home with his family.

He says he has not considered moving out as that would mean a significant cut from the money he uses to support them.

“I spend a large part of my income on my family, and the rest I put back into my art. I think that investing in my family means future financial success for both them and me.”

--

According to Ncemane, while many young South Africans cannot avoid paying “black tax”, they can learn to manage their finances in a way that helps them support their families without ignoring their own financial needs and goals.

When rethinking black tax, Ncemane lists a few tips for swimming instead of drowning:

Be realistic about your money.

We believe in the adage, “Know better, do better”.

This means that you will be able to get a good grip on your finances once you understand your situation better.

Free, open online courses like Moneyversity means there are easy ways and valuable tools available to help you understand money matters.

Weigh up your income against your expenses and commitments.

Take time to review your bank statements, or use a free app like 22seven which categorises your income and spending automatically.

Get help and good advice.

If you’re struggling to stay afloat financially, get a life jacket.

If you’re lost and off track with your money goals, get direction.

“We don’t always know how to create and maintain financial boundaries with our loved ones, and this is something a financial adviser can help you to put in place.”

Have open conversations with your family about money.

You don’t necessarily need to disclose your payslip, but Ncemane says that sharing your financial goals and giving your dependents a view of your expenses will help them understand what you can realistically afford.

“Sometimes our families believe we can afford more than we can. This is why it’s important to have open conversations with the people that we care for and feel financially responsible for.”

Empower yourself and your family.

Demonstrate healthy financial behaviour by, for example, drawing up your own budget and sticking to it.

“Our parents did not have access to the tools and resources we do today, so helping them understand the value of good money habits can benefit everyone.”

Enjoy your income.

Finally, Ncemane says it is important to enjoy your income.

“We work hard so that we can enjoy the rewards. Finding a balance between your financial responsibilities and taking steps towards your own financial goals can give you peace of mind when it comes to your money.”

--

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : 'Black Tax'... working hard, earning well, but struggling financially


Recommended

by NEWSROOM AI
Read More
Foreigners rule informal trading (outcompeting even Shoprite). Consumers win!

Foreigners rule informal trading (outcompeting even Shoprite). Consumers win!

About 20% of every rand spent in South Africa goes to informal stores, mostly foreign-run. GG Alcock on his book “KasiNomics".

Adri Williams - Ubuntu personified - saved Khayelitsha Cookies and changed lives

Adri Williams - Ubuntu personified - saved Khayelitsha Cookies and changed lives

Bruce Whitfield interviews Williams about her transformative business delivering quality cookies to hotels and Pick n Pay.

How much you need to retire ‘comfortably’ (and the best ‘investment’ ever)

How much you need to retire ‘comfortably’ (and the best ‘investment’ ever)

For your assets to generate an income that lasts as long as you do; here’s what you’ll need to amass (and tips for getting there)…

7-step roadmap to riches (it’ll happen slowly, but surely)

7-step roadmap to riches (it’ll happen slowly, but surely)

Old Mutual personal finance expert Lizl Budhram offers a step-by-step guide to get your financial future right.

‘Love of freedom’ making even well-paid Millennials worse off than their parents

‘Love of freedom’ making even well-paid Millennials worse off than their parents

Millennials’ love of flexibility does NOT have to have devastating financial consequences.

Does your Tax Free Savings Account suck? You’re not stuck! How to transfer…

Does your Tax Free Savings Account suck? You’re not stuck! How to transfer…

How to – quickly and easily – transfer in or out of an existing Tax Free Savings Account, for whatever reason.

Popular articles
[BREAKING NEWS] Johnny Clegg (66) has passed away

[BREAKING NEWS] Johnny Clegg (66) has passed away

Specialists diagnosed the singer with pancreatic cancer in 2015.

[LISTEN] Voice of the underworld - a 'retired' Cape Flats gangster speaks out

[LISTEN] Voice of the underworld - a 'retired' Cape Flats gangster speaks out

Jason is a 50-year-old former member of The Americans, the largest street gang operating in Cape Town.

Shark attack: 'I saw a cloud of blood in the water'

Shark attack: 'I saw a cloud of blood in the water'

Joao Felizardo helped rescue his surfer buddy Dusty Phelan after a shark bit him across both his legs in Port Alfred.

'Batchelor was once close to Mikey Schultz and self-confessed Kebble killers'

'Batchelor was once close to Mikey Schultz and self-confessed Kebble killers'

Journalist and author Mandy Wiener describes former footballer Marc Batchelor's links to alleged underworld figures.

How Christo Wiese became the richest in SA, and how it all came crashing down

How Christo Wiese became the richest in SA, and how it all came crashing down

The Money Show’s Bruce Whitfield interviews TJ Strydom, author of “Christo Wiese - Risk And Riches”.

'We find connections between gangs in Cape Town, Johannesburg and Durban'

'We find connections between gangs in Cape Town, Johannesburg and Durban'

Global Initiative against Transnational Organised Crime's Simone Haysom says gangs operate far broader than the Western Cape.

'I should have told the Sunday Times the pot smoking was irrelevant'

'I should have told the Sunday Times the pot smoking was irrelevant'

Investigative journalist Jacques Pauw says he's sorry for any harm caused in his article on Mkhwebane and her principal witness.

I decided to make this Rihanna song with my maskandi vision - Mbuzeni Mkhize

I decided to make this Rihanna song with my maskandi vision - Mbuzeni Mkhize

After South African star Mbuzeni Mkhize performed a remix of Rihanna's track 'Diamonds' she contacted him to collaborate with her.

[WATCH] Over 50 artists record special version of Johnny Clegg’s  “The Crossing”

[WATCH] Over 50 artists record special version of Johnny Clegg’s “The Crossing”

For this week's #GoodNewsThursdays, we find out the inspiration behind the production.