logo-1-1 (1)

The Dark Side of Black Tax

Black Tax: When a young person shares their income not only with their immediate family but with extended family as well, this means that they financially support their own kids, their parents and oftentimes aunts and cousins as well. It is the sandwich generation.

In my personal experience, black tax has not been burdensome, I give my parents money from time to time to help out with just a few things. My oldest sister might have a different recollection! Although my parents are mostly self-sufficient, I know my sister helped out a lot while all of us, her siblings were in University. Something I know she is proud of.


Having interviewed many people for my upcoming book on the topic of black tax, majority said they were proud that they could help their families to move forward i.e. send their siblings to school, that even though it put a lot of strain on their finances, they would do it again in a heartbeat.


Now, what is the other unspoken side of black tax? A month ago, I got a call from a young professional who was in a dilemma. He told me his story: he’s single, owns a property that he rents out in Johannesburg while he works in PE. He wants to either start investing in the stock market or purchase a second property that he will also rent out. Now, his dilemma is this: his father wants him to buy a car.


He lives 10-minutes walking distance away from work in PE and does not need a car. His father wants him to buy a car because when he visits home, he doesn’t have anything tangible to show that his son is ‘successful’, hence the request for him to buy a car.


Another example, a year ago in a coaching session, a client said she was finally getting out of revolving debt and started making her finances a priority, when I met her, she had already done a lot of mental work and had come up with a plan to pay off her debts. The next decision she wanted to take was to downgrade her car to a smaller, more cost-effective one. Her mother said to her: “you have already downgraded on so many things, why do you have to embarrass us by getting a smaller car!”


This made me realise that there is a lot of expectation of ‘success’ coming from parents, what their children drive, where they live etc. And it does not matter at what cost this success comes.

Having spoken to Dr. Ingrid Artus, a counselling psychologist, she says people normally operate from either an internal locus of control or external locus of control.

External locus of control says: I am respected and liked because of where I live, what I drive, where I am seen hanging out etc. validation of success comes from the outside.

Internal locus of control on the other hand, says: I am worthy with or without ‘things’. And unfortunately a lot more people and parents operate from an external locus of control, as seen in the two examples above.


Another example of Black Tax that is not spoken of is the (financial) abuse. In another coaching session, a client told me she was in a financial mess. She lived at home with her mom and siblings to cut costs of having to support two households. The siblings had finished school but did not want to work, and so she kept on dishing out money.


So, how does one deal with black tax?


  1. Communicate

There are a lot of unspoken expectations when it comes to family and money. Having candid conversations about your finances can help your family know what it is you can and can’t do for them.


  1. Set boundaries

 Boundaries are important in any relationship. Boundaries set the basic guidelines on how you will be treated. Set boundaries with your family to say, for example, unless it is unexpected expenses with school, you will not be giving out any extra money.


  1. Have a budget and stick to it

Let everyone involved know the budget for each month. If it is R3,000 or R5,000 per month. That is it. Teach them how to budget and live within what you provide.


  1. Think about ad hoc expenses

 We often underestimate our expenses, by far as 30%! We tend to think about the obvious i.e. fixed expenses and groceries, but we tend to forget the birthday gifts, wedding presents or unexpectedly having to buy new tyres etc. Even when you have set boundaries, unfortunately there will still be expenses that come up and are beyond their control.


Try to put a small amount away every month to cover such costs.


  1. Another source of income

Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.

Encourage your family members to use their skills to start enterprising; one might be good at baking. Ask them to start baking to sell the cookies from the house. Use social media to your advantage by advertising on it, for example. You can also look into their different hobbies and see if you can help them start a business from those.


Black tax needn’t be a burden. Helping your family is something to be proud of but you need to manage it well to ensure your financial success and ultimately, theirs too.


Tribe, what’s your experience with ‘black tax’?


**This article first appeared in City Press.


Latest Post

The Women & Money Brunch is Back!

Remember the incredible energy and inspiration from The Women & Money event last year? We’re thrilled to announce it’s returning in 2024, bigger and better than ever! This year’s event promises to be a life-changing experience for South African women ready to take charge of their finances!
Open chat
Hello Welcome To Woman & Finance👋
How can we help you today?