27 June 2022 | 8 – 10 min read
Navigating black tax: Support your family AND your future
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You should be proud of yourself.
As a South African professional millennial, you don't exactly have it easy. Not that we had to remind you of that, but it's true.
Whether it's load shedding, crime, the price of petrol or the rising cost of living and inflation, your path to success isn't exactly paved with sapphires and rubies.
But as a young black professional, you're faced with the additional pressures of a financial commitment commonly known as 'Black Tax'.
Is the pressure of supporting your family stressing you out? Book a free session with a Velocity Club expert for advice from people who understand.
We know this is a difficult, sometimes awkward topic that many of you would rather avoid discussing. We get it. But today, we're tackling it head-on because it's an issue that affects so many of you in different financial ways. And since we're interested in the things that affect you financially, we're talking about Black Tax and how to cope with it so that we can help you to achieve your financial goals.
What is 'Black Tax'?
The loose definition of Black Tax is the extra money younger black professionals are expected to pay to support less fortunate immediate or extended family members.
Calling it a 'tax' is, however, increasingly controversial. A tax implies money paid to another entity begrudgingly or unwillingly; in other words, a payment made against your best wishes.
On the contrary, the money young black professionals send home to their families is done out of their desire to help support those family members. It's not typically done against their will or because anyone says they have to.
For those reasons, some have argued that labelling it 'black' is also a misnomer because anyone would do the same for their family, regardless of race.
But whatever we choose to call it, we know that many of you are financially supporting your families, other relatives and even friends regularly, and that's a BIG personal, financial and emotional commitment. We want to help you cope with it.
Book a free session with a Velocity Club expert today [scroll down to see who is on your team!], and we'll help you develop a personal financial plan for your life, income, and goals. We understand Black Tax because we've been there ourselves. With our financial plan, you'll be able to get your finances in top form to support your family while still achieving your future goals.
How does black tax affect you?
Some now refer to black millennials as the 'sandwich generation. Many of you support older family members - like parents and grandparents - and your children. Plus, of course, yourself.
One survey reported that over two-thirds of young black professionals support family and/or friends, leaving over three-quarters of the survey respondents feeling insecure about their financial situation.
The same analysis showed that most South Africans - not millennials - are so burdened by these financial obligations towards relatives that they cannot save for retirement. Altogether, it means that the cycle of poverty and financial problems is repeated.
The data, then, is clear: Even if you willingly contribute financially to family members, Black Tax's financial burden on you is heavy. And it affects both your present AND your future.
To make matters worse, it also affects your children's future. When you cannot save sufficiently for retirement because you're making large monthly payments to family members, you'll have to rely on your children for financial support. That places them in an identical situation to the one you might be in now. It's not sustainable.
It's time we spoke about finances and, in turn, black tax more freely
We know that Black Tax is a topic that most of you would rather avoid discussing. But that's not going to solve the problems we've just discussed.
The Velocity Club team is passionate about helping people like you build personalised financial plans that are perfect not only for your circumstances but also for your future. We want to break the cycle of poverty and hopelessness that so many of us are often born into. Our mission is to ensure that you and your children can look forward to the financial future you dream of.
Take that first step towards your best financial future today by booking a free consultation with a Velocity Club expert.
Get started. Book a session. Our team understands professional South African millennials' needs, fears and burdens better than anyone!
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