4 expert tips on how to navigate black tax

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  • The rising cost of living is subjecting more people to black tax.
  • Financial experts say that black tax is not a negative thing, but it can help unite families.
  • They share four tips that can be used to navigate black tax.


While the rising cost of living is making it harder for South Africans to make ends meet, more people than ever are subject to black tax.

This, according to Sanlam Connect, is due to the country’s 45.5 percent unemployment rate, the lingering effects of the past and the economic ravages of the pandemic.

“While black tax is often portrayed in a negative light, South Africans who bear the responsibility for extended families can find ways to empower themselves and their families financially through good practical suggestions to build generational wealth, thereby leaving a legacy for the future,” says Sipho Mncwabe, head of adviser for transformation at Sanlam Connect.

READ MORE | 8 expert tips to surviving South Africa’s rising cost of living

“The family responsibility, which has come to be known as ‘black tax’, is deeply rooted in the African way of being. While admirable, if not managed well, shouldering this burden can be financially draining. With the right financial guidance and an integrated approach to financial management, we can change the narrative and turn black tax into a vehicle that can help many South Africans live with confidence,” he adds.

Farzana Botha, Segment Solutions manager at Sanlam Savings, believes that black tax can help unite families, through honest conversations and shared goals.

Here are four ways that black tax can be navigated:

Know your limits and stick to them

Being honest about what you can and cannot afford, especially when confronted with family members who may be experiencing challenging times, can be difficult. Nonetheless, it is an important lesson to master. Overstretching your budget has the potential to leave you unable to assist your family or yourself. 

“It is important for caretakers to realise that decades of unbalanced allocation of resources have resulted in inequality and poverty for many South Africans. Against this background, it is important to balance one’s compassion with realism and accept that we will be one of the links in a chain of change,” Sipho says.

Money is not your only resource

Help is available in many forms when it comes to building generational wealth. Often the most important form of help is not the money itself, but the lessons around money management.

Farzana says, “It is vital to see your financial position as one of leadership. Through your lived experience, you can offer more than just your financial aid. You can also offer your intellectual and emotional aid.”

It is often said that a rising tide lifts all ships, so by improving your own financial education, you are holding the door open for those coming up behind you.

“To assist others you also need to help empower them. Guide them toward financial education and budgeting advice. Help them to look for ways to make ends meet on limited resources. Crucially, be upfront and honest about your financial position to help manage their expectations of your time and resources. If you can, instead of just sending money, allocate money to opportunities for development for those who depend on you,” he adds.

READ MORE | 7 tips on creating financial cohesion as a couple

Have tough conversations

“None of this can happen without open and honest communication. Unfortunately, for many South Africans, conversations about money can be sensitive. Destigmatising financial conversations is the most important step in the process of turning ‘black tax’ into a tax return. This means having frank discussions that specify the nature of the financial assistance you will be offering – outlining why you are helping, the duration, and what you hope to achieve. Facilitate a conversation with yourself, your family and a holistic financial adviser who can help you all map out attainable goals that are unique to your circumstances,” Sipho explains.

“As a caretaker, one should insist that the dependent takes steps that are within their means, to make a difference in their own lives. Otherwise, you can easily find yourself starting to own the challenges faced by a family member with an expectation to provide all the answers, and help. This means having difficult conversations and setting clear boundaries,” he continues.

Look after yourself

“While empathy and support are important and necessary human characteristics, be careful of sacrificing your mental, physical and financial health on the altar of family responsibility. Remember that, without you, others may find themselves in greater difficulty and unconstrained support may not be constructive. Make sure all aspects of your mental, physical, and financial health are in good shape. This may also ensure that your obligation feels less like a burden and more like an investment,” Farzana says.

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