Given SA’s history, the reality is that inequality in the form of race, income, gender and economic opportunity is still rampant, 28 years after democracy. One of the manifestations of this income and economic inequality is “black tax” — a term despised among my friends and colleagues; we prefer to call it family tax. Essentially, it’s the extra money black professionals are expected to give every month to support their less fortunate relatives and extended family members.
We are taught ubuntu from a young age, to share with those around you. Not extending a hand in some instances means that those financially dependent on you go without. Especially at this time, as households grapple with high inflation, rising food prices, record petrol prices and economic hardship, the working class has no option but to lend a helping hand to support extended families.
I draw from my own experience growing up. The need to share our financial resources beyond our own household was evident in the expectation my working-class parents had that we needed to help not only my grandparents, but their siblings too. At 21, when I received my first salary, I found myself responsible for a family of six as sole breadwinner. I was grateful for the opportunities afforded to me as a young graduate at one of the big four banks, thanks in part to employment equity.
The problem is that family tax comes at the cost of trying to balance living in the present while building financially for the future
The problem is that family tax comes at the cost of trying to balance living in the present while building financially for the future. Depending on the extent of the assistance, this needs to form part of your monthly budget. These are some pointers I have found useful:
- Come together as a family to have a plan in place in terms of the assistance required;
- Define what the financial assistance looks like and what is feasible and what is not;
- Be honest and realistic in terms of expectations; and
- Form a family stokvel for emergencies.
My generation is often viewed as the sandwich generation: we are among the first after democracy to get opportunities, which means giving back, but we are also the product of the sacrifices and help of loved ones. We cannot talk about personal finance without looking at some of the factors that play a role in perpetuating the inequalities in our society.
So, when does family tax stop? The only real way to safeguard our children from these obligations is to save and invest for the future.
* Mukumbo is a financial literacy enthusiast and investor
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