Wananchi Opinion: How to deal with relatives and black tax

By Abol Kings

"Black tax" refers to the financial support that individuals, particularly in African and other developing communities, provide to their extended families.

This responsibility often falls on the first generation of financially successful individuals who are expected to support parents, siblings, and sometimes even extended relatives.

While black tax is rooted in cultural values such as Ubuntu and communal responsibility, it can place financial and emotional strain on those who bear the burden.

Handling black tax requires financial planning, open communication, boundary setting, and a long-term strategy to create generational wealth while avoiding personal financial struggles.

Create a Budget and Financial Plan. One of the best ways to manage black tax is through proper budgeting and financial planning.

It is important to assess income, fixed expenses, and savings before determining how much can be allocated to family support.

Setting aside a fixed amount each month ensures that financial assistance does not interfere with personal financial goals.

It is also wise to separate personal finances from black tax contributions. Having a dedicated budget for family support prevents overspending and allows individuals to maintain control over their finances.

Set Clear Boundaries and Expectations. Setting boundaries is essential to ensure that black tax does not become overwhelming.

Many people struggle with saying no to family requests, but it is important to recognize that financial limitations exist.

Communicating openly with family members about what is affordable and sustainable can help manage their expectations.

For example, instead of giving unlimited financial support, one can set specific guidelines, such as assisting with school fees but not daily living expenses.

Providing non-monetary support, such as helping family members find jobs or start businesses, can also be a way to reduce dependence.

Encourage Financial Independence. Instead of continuously giving money, individuals can empower their families to become financially independent.

This can be done by supporting education, investing in skills development, and encouraging entrepreneurship.

Helping a sibling complete their education or funding a small business can have long-term benefits, as it reduces their dependence on black tax.

Additionally, financial literacy is crucial. Teaching family members how to budget, save, and invest can help them manage their own finances better.

By fostering a culture of financial responsibility, individuals can reduce long-term financial strain.

 Prioritize Savings and Investments. Handling black tax does not mean neglecting personal financial growth. It is important to prioritize savings, emergency funds, and investments.

Many people fall into the trap of giving away too much money, leaving themselves vulnerable in case of emergencies or retirement.

A good strategy is to follow the "pay yourself first" rule, where a portion of income goes into savings and investments before contributing to black tax.

Long-term investments, such as property or stocks, can help create generational wealth and financial security.

Involve the Family in Financial Planning. Many families that rely on black tax do not fully understand the financial pressures it places on the contributor.

Having open discussions about finances, expenses, and long-term goals can help create a sense of shared responsibility.

If possible, family members should contribute to household expenses collectively, rather than depending on one person.

Encouraging family members to find alternative income sources can also ease financial burdens.

Seek Emotional and Professional Support. Managing black tax can be emotionally draining, especially when there is guilt or pressure from family.

Seeking emotional support from friends, mentors, or financial advisors can help navigate these challenges.

Financial advisors can provide guidance on wealth management, investment strategies, and how to balance black tax with personal financial goals. Additionally, speaking with a mentor or counselor can help address feelings of guilt or stress associated with black tax.

In conclusion, black tax is a complex reality for many individuals, but it does not have to be a financial burden.

The goal is to provide meaningful support to family members while maintaining financial stability and working towards long-term financial success.

Ultimately, handling black tax responsibly allows individuals to uplift their families while also securing their own financial future.

Mr. Abol Kings is a personal finance coach and a former banker