It’s that time of year again – the festive season is a time for sharing, giving, and spending time with people you love. For Africans and others who can relate, it’s time to extend a hand of help to relatives again and help to pay their bills.
Black tax often reflects love, sacrifice, and care for family but can also be financially burdensome. It stifles the ability of the giver to save, invest, or manage their finances.
According to the Piggyvest Savings Report 2024, over 70% of Nigerian income earners pay black tax. However, the frequency varies: 35% contribute monthly, while 65% do so occasionally.
This article will discuss how you can change the narrative and turn the black tax into family wealth with the right plan.
1. Provide non-monetary support
You can use this festive period to talk to them about proper financial management – saving, budgeting, and making plans. Also, instead of giving them money, you can invest it in something that will help them grow and make them better. For instance, you could sponsor a relative’s course in digital marketing, invest in setting up a small retail business, or introduce them to freelancing platforms. The goal is to ensure that they can make enough to pay their bills and be independent.
2. Collaborate as a family.
During the festive season, if you want to turn black tax into family wealth and avoid being broke, use the holidays to discuss savings and investment as a family.
You can all come together to save money for a cause – investment, the purchase of a small commercial farm, the need to start a family business, or just about any initiative that keeps the family engaged and financially aware.
3. Join a savings community
In addition to family collaborations, a savings group can add more structure to the plan. So, during the festive period, you can talk your family into joining a savings group. This will give everyone a sense of responsibility. To achieve this, you can all decide to save towards achieving a particular goal, like buying land, paying bills, or investing in real estate.
4. Set boundaries
There are consequences for not protecting your space, especially when there is resistance from your family. While seeking to change the narrative by turning the black tax into family wealth and helping your family, at the same time, ensure that you set clear boundaries on how much of yourself you can give them financially. Remember that black tax can be burdensome and can stifle your financial plans.
This will keep their expectations in check and help control their entitlement mentality. However, ensure that you are clear while communicating this with them, and more importantly, be kind and gracious.
5. Be strategic with gifting
The festive season is a time to give family and loved ones gifts. You can give thoughtful and strategic gifts that will contribute positively to your family. It could be a financial literacy course on Coursera, a financial consultation, or a book on finance management like Rich Dad Poor Dad by Robert Kiyosaki. Gifting them shares is also not a bad idea. This will drive them to build wealth instead of depending on you.
Note that you can’t turn black tax into family wealth alone, so you must train your family members to be financially literate.
Ultimately, the black tax does not have to be a financial burden. With the above strategies, you should succeed at turning the black tax into family wealth. Therefore, prioritise financial literacy in your family. If they can learn how to speak, eat, or do everyday things, they can also learn about finance.
