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Black Tax And Saving: Don't Become The Family ATM

By Faeza
13 July 2017

A conversation about black tax, consumerism and saving may be complicated by the fact that "financial spend can be emotional", says the head of consumer education at FNB, Eunice Sibiya.

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Black tax may hamper the financial goals of many South Africans but it is not solely to blame for their financial difficulties, says the head of financial education at Old Mutual, John Manyike.

"Materialism, consumerism, instant gratification and over-reliance on credit are real issues affecting our people," he tells HuffPost SA.

Speaking during the launch of Savings Month, the founder of wealth management solutions company Inkunzi Investments, Owen Nkomo, described the situation in which a recently graduated engineer might find himself in. "He is lured into this new lifestyle but is not mentored or financially astute. Then he starts spending aggressively."

He also supports his family. As a result, saving becomes almost impossible, Nkomo said in Johannesburg last week.

Manyike's concern is that if this generation does not save -- especially for their own retirement -- the black tax phenomenon will likely be passed on to future generations and wealth creation through savings will prove difficult.

A conversation about black tax, consumerism and saving may be complicated by the fact that "financial spend can be emotional", says the head of consumer education at FNB, Eunice Sibiya.

How people engage with money could be influenced by a number of factors including their background. At a financial literacy session she once conducted, Sibiya says one attendant said: "Money is like the father I never had.

Read more on HuffingtonPostSA