Black tax: When relatives become your financial business

Esther Mbuthia, 34, happily married and a proud mother of two. A businesswoman, she spends her day in her salon as her husband runs their poultry business.

A modern day couple, the two have split family responsibilities. The husband pays house rent and school fees for the growing children.

Esther takes care of groceries and other household needs. They make savings for their projects via one account. Whatever is left from their individual earnings does not bother them.

However, since they got married nine years ago, the couple has had to put up with other silent expenses, that at some point threatened to break their marriage. Coming from a humble upbringing, Esther has been paying for her young sister’s school fees and has also been the bread winner for her extended family.

These sacrifices have taken a good sum out of her business earnings. Her husband has not been spared as he too supports his extended family starting with a brother they are housing.

“At some point, my husband felt we were both carrying unnecessary weight and asked if we could discuss relatives and money issues, which we did. Just like it is the case with many African families, family burdens are spread throughout the family. You have to support other family members and be there for their every need,” Esther remarks.

“If I don’t support my siblings, they could end up living a miserable life, which again will be a shame for the family. We have to support each other until the point where everyone is stable. It is how we have been cultured. The family belongs together,” she notes.

Enter Joseph Kioko, an accountant. Kioki chose to distance himself from carrying burdens of other family members aside from catering for the needs of his wife. He says splitting his income towards other needs aside from their immediate ones is something he has had to avoid. Kioko says its such vicious cycle that make it impossible for many African families to meet their financial goals and keeps them in poverty.

“I don’t mean to sound rude, but my money is mine and not for the extended family. When relatives start to rely on you, you discover you will never get anywhere in life as your finances are always depleted. I have made this clear to my wife and we have reached an agreement that unless it is necessary, our extended family does not take off our earnings and savings. Yes, we can have common projects and can commit to financial issues aside from those kind that requires us to keep on assisting relatives as if it was their right,” he notes.

“Its Easter, we can do family lunch together as the extended family, but that can be planned in a way that everyone contributes to the budget. It can’t be my business to feed the rest of the family. Financial discipline is key for an individual’s development. Everyone should pull their weight,” he goes on.

Is it your duty to support your relatives financially? Black Tax is commonly used in South Africa, where it refers to “the financial support that black professionals are expected to give their extended families.”

The fact that many people from black communities, both locally and abroad feel that obligation to take care of their families after they have made it appears to be, in equal measure a blessing and a curse.

“At 77, my mom is single, retired, and has no retirement savings at all. Meanwhile, my family and I are doing great financially; thanks to entrepreneurship, investments in stocks and real estate, and some other smart money moves, we’ve amassed a seven-figure net worth,” money coach Lynette Cox wrote on Vox last year.

Cox noted that “a quarter of black households have zero or negative net worth, compared with a tenth of white families, according to the Economic Policy Institute.”

In her assessment of the matter affecting so many families, Cox said the reason for the wealth gap are complicated and multi-layered, with racism, historical injustices, structural inequality, and educational disparities all playing a huge role.

Tackling the same matter closer home, the Standard Digital team held a Twitter Space discussion, joined by nearly two thousand Kenyans.

In the candid conversation, Black Tax in this case was used to refer to the amount of money a person is expected to send to their family, outside of their own expenses and bills.

“Is this an obligation to you as an individual, or is it something you do genuinely and willingly every now and then?” was the first question tackled.

Brian Imbo, who joined the conversation, described Black Tax as more of a moral duty than the typical duty- one that is done out of respect.

“You can help your family and in my opinion, it’s good to do so.” Imbo said.

He added: “Every member of the society has a responsibility or a part to play. It means it’s the role of the family to bring up the young one. The family is the basic unit of all social interactions.”

Imbo argued the culture Black Tax cultivates can break generational poverty and build generational wealth through mutual support.

The discussion progressed to include some of the ways to properly give, and speakers expressed that it is better to equip loved ones with the tools they need to be successful rather than constantly give handouts.

The Wealth Tribe, a business blog advises there are some key ways to fight the negative sides of Black Tax.

The report, How to help without sabotaging your financial goals says that the first thing to do is to take responsibility for one’s finances and become self-sustaining.

“ As an adult, especially one who has a job, you have one key financial responsibility: to work towards self-sustenance. By doing this, you will remove yourself from the family dependency equation, which will not only set a good example to others, but also lessens the burden of Black Tax from your family as a whole.”

The study urged the black community to then assess which family members would fall under their “responsibility”. It warned the youth to remember that “you are your first primary responsibility, before taking on requests.”

“There’s no magic bullet for Black Tax. After settling on an amount, determine who or which cause needs it the most (your prioritization sheet will also come in handy in this case), give towards that, and make peace with it.”

On the Twitter spaces forum, Ronny Reagan maintained that maybe Black Tax isn’t all bad, rather it is a way for us to show appreciation to those who brought us up. But he questioned how blurry the line is between reciprocation and unfair obligation.

“My point of concern is that many people are raised in families whereby aunties and uncles play that parenting role. They make sacrifices to get you better opportunities in life, and when you have made it, they expect you to do the same for their children.”

He added: “How many people can you help, if they are all depending on you? This kind of pressure in families is one of the major reasons why our youth are dying after suffering from depression- the burden.”

Mr Onyikwa said that as to whether it is our duty to support relatives- the answer can be yes or no depending on the circumstances.

“Many of us have had family come through for us at one point or another, whether it was financially or emotionally. In my opinion, once you are financially stable, it is your moral duty to help whenever you can.”

He added: “But you have to have a personal threshold. How far can you help? You can’t solve every problem in life. But there are those causes that you may hold dear.”

A Twitter user and advocate going by Lou agreed with Mr Onyikwa, adding “You kind of have to choose and follow through.”

“If I’ve got a little bit extra, maybe it’s been a good year, I definitely don’t mind helping. In Africa, we say that it takes a village to raise a child. And Mr Onyikwa hit the nail on the head when he said that ‘we’ve all been helped at one point or another- whether financially or emotionally’,” she said.

Lou urged the youth to resist the pressure that comes with social media by avoiding living a lie on social platforms.

“Before you put yourself out there, think about the repercussions You don’t have to keep feeding a lie and hurting your mental health.”

Mandila reflected on his own experience lacking the support he anticipated from his family while planning his wedding.

He felt it was a hard lesson to learn when relatives who didn’t help out were back months after the wedding expecting help.“When you get married, I’d say the priority goes to your immediate family member - your wife or husband and children. After, you can extend that to your parents if you want and consider creating room for siblings and the rest. Prioritise your own family, wife and kids and then consider the rest.”

“I’d like to think about it like tithe - if I relate this with a bible reference. The higher you earn, the higher you are required to give. So if you decide to, go as per your earnings and what you can afford. If the Black Tax is 10 per cent of my salary, that will continue to go up as my income increases,” Natalie Wanjiru, a speaker at the forum said.