For many black people, once we start working, we feel obliged to provide for extended family members, especially our parents. Doing this is a big thing in the black community.
Giving extended families and friends financial support and how this affects your finances is what I call the black tax.
Our parents made us believe we needed to give back. We grew up seeing them support their community and people with low economic status.
There is a black tax in the US regarding how black people are affected in their careers and business by being black. But that is not what I am writing about today.
The black tax, in this context, is the sacrifices we make when we extend financial support to extended family members. We do this because we supposedly have the financial ability to do so.
When we start working as young black professionals, the demands come in from parents, uncles, cousins, aunties, and extended family. From contributing to a deceased family member’s funeral to paying a sick person’s hospital bills.
Someone may need help with schooling, while another has children they cannot care for. We have seen our parents do it. We know how good it is to help those in need. So, when these family bills come in, we believe we have to meet them.
How does the Black tax Impact Our Finances?
The moment we start giving and giving until barely anything is left, it starts to impact us. Sometimes, the more you give, the more you get asked to provide.
Now the giving impacts your ability to save, invest, and build a future for yourself and your children. It begins to affect the quality of life you live.
So how do you help yourself? How do you continue to pay the black tax without impacting your finances and family? How do you avoid the black tax altogether?
The first question you need to answer is, “do you want to say NO entirely to everything or just a few things?”
Suppose you plan to communicate an absolute NO; it is your prerogative. But it would be best if you remembered why you are saying no.
For example, if it is because you want to build savings, investments, and a future, you need to be clear on that.
There would be a backlash. You need to be able to look at your reasons for saying no and stand by it. Your flat-out no could be temporary, like, “no, I need to sort myself out for now.”
It might help to communicate your reasons to your parents and others who would understand, so they can back off without being offended.
Sometimes, you may not want to share your reasons because it would not achieve anything. However, at that point, holding steadfastly to your reasons would help you pull through.
It is also OK to say no to a few things beyond your ability. However, you need to know the reasons also. Let them know that you want to save, pay off your debt, improve your quality of life, and all other reasons you may have.
Expect a lot of manipulation because these people may make you feel like you are not being emphatic and do not care. But being able to fall back on your reasons would support your mental health.
So how do you save and live the Bulletproof Life in the face of the black tax?
Budgeting Your Money is Key
If you know that there are things that you need to do for your extended family, build them into your monthly budget. Not as a priority but as something you do after you have settled your bills and saved for emergencies.
Have a Monthly Allocation For Black Tax
An excellent way to tackle the black tax is to have a monthly allocation for it; this works a lot. But, unfortunately, there’s little you can do beyond that allocation—plan for the black tax.
Sometimes, there are emergencies like someone falling ill suddenly, and they need your support; you can dip into your black tax fund and give towards that. Doing this controls how much you give because you can only give what is in the black tax pot.
When you get your money monthly, build your black tax into your budget. Do not prioritize it above your savings, emergency funds, or bills.
Toughen up in your mind about saying no. Saying no to your loved ones can be some of the hardest NOs’ to say.
For example, when you hear people you love complaining about how bad their situation is and how they have not eaten for days, it is hard to say no.
Understand When It is Essential and When It is Not
Sometimes people come to you with requests that do not sound urgent or important. For instance, when they ask you to contribute to a lavish wedding or burial, you need to ask yourself if it is something you need to prioritize or not.
You can dip into your black tax fund, but you need to do it with care, mainly because you are being asked to contribute to an extra instead of a life-and-death need. This contribution should not impact your ability to pay your bills or give your children the desired life.
Avoid Bragging and Stunting
If you live a quality of life that people feel is essentially high, they will likely come to you for more help because they think you can afford it. I am not saying you should not buy nice things for yourself or live a good quality, but it will be good if you don’t brag and show off.
You cannot brag and wonder why people are coming to you for help. When you stunt on the gram and try to show that you are living large and well, it is expected that people will continue to ask you for money.
Once you start doing this, you are more likely to get more requests for help from people who think you can help them.
Till next time.