SOUTH AFRICA: As a country with a complicated and difficult past, many parents, families and even communities have sacrificed much to give their children the best chance at getting a decent education and a start at realising their dreams.
Although these efforts continue to benefit individuals and communities, Kanyisa Ncemane, General Manager: Customer Solutions at Old Mutual Personal Finance, points out that they also inadvertently create a cycle of financial responsibility.
Findings of the 2017 Old Mutual Savings and Investment Monitor support this, citing that 70% of working metro South Africans are currently supporting, or foresee that they will have to support older family members in the future.

This responsibility is colloquially known as “black tax”.
Ncemane explains that black tax is linked to complicated emotions and must be approached delicately.
“While many of us are thankful for the opportunities we’ve received – and want to repay this in some form – our success can also come with a sense of guilt,” she says.
Busi*, 27, an electrical technologist earning R560 000 a year, shares her salary with her grandmother and cousins.
“There is a great deal of anxiety that goes hand-in-hand with the responsibility to support your extended family while at the same time building your career and trying to achieve your financial goals,” says Busi.
While she accepts the responsibility of helping to care for her family, it can be overwhelming.
“The irony is that my own financial success is essentially on hold because of my financial responsibilities.”
Ntando*, like Busi, shares his income with his family: his mother and father, and younger sister.
In his early thirties, he works in an art curating position at a top gallery, making R280 000 a year.
When he is not travelling for work, Ntando lives at home with his family.
He says he has not considered moving out as that would mean a significant cut from the money he uses to support them.
“I spend a large part of my income on my family, and the rest I put back into my art. I think that investing in my family means future financial success for both them and me.”
According to Ncemane, while many young South Africans cannot avoid paying “black tax”, they can learn to manage their finances in a way that helps them support their families without ignoring their own financial needs and goals.
When rethinking black tax, Ncemane lists a few tips for swimming instead of drowning:
Be realistic about your money.
We believe in the adage, “Know better, do better”.
This means that you will be able to get a good grip on your finances once you understand your situation better.
Weigh up your income against your expenses and commitments.
Take time to review your bank statements, or use a free app like 22seven which categorises your income and spending automatically.
Get help and good advice.
If you’re struggling to stay afloat financially, get a life jacket.
If you’re lost and off track with your money goals, get direction.
“We don’t always know how to create and maintain financial boundaries with our loved ones, and this is something a financial adviser can help you to put in place.”
Have open conversations with your family about money.
You don’t necessarily need to disclose your payslip, but Ncemane says that sharing your financial goals and giving your dependents a view of your expenses will help them understand what you can realistically afford.
“Sometimes our families believe we can afford more than we can. This is why it’s important to have open conversations with the people that we care for and feel financially responsible for.”
Empower yourself and your family.
Demonstrate healthy financial behaviour by, for example, drawing up your own budget and sticking to it.
“Our parents did not have access to the tools and resources we do today, so helping them understand the value of good money habits can benefit everyone.”
Enjoy your income.
Finally, Ncemane says it is important to enjoy your income.
“We work hard so that we can enjoy the rewards. Finding a balance between your financial responsibilities and taking steps towards your own financial goals can give you peace of mind when it comes to your money.”

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