Cut back on 'black tax' for family's sake

The start of December is a reminder that the Christmas season is here. Retailers are eagerly anticipating their biggest month of the year, hoping that it helps them to reach some of the sales targets missed throughout the year due to the low-growth environment.

Individuals face the month with mixed feelings. On the one hand, they are excited about spending time with friends and family. On the other, they dread the excessive spending that characterises the holiday season.

This excessive spending affects some more than others - it all depends on how many relatives are looking to you for financial support.

The most common situation is the typical South African low- to middle-income family structure where one or two people are the primary income earners responsible for the entire family.

They end up covering the bills for many members of the extended family, most of whom are unemployed. Each year, the family grows, and each year, the financial burden on one person rises.

Being the primary income earner often results in that person feeling obligated to spend way beyond their means, because simply saying no and telling people you have reached your limit can attract anger and judgment from those you care about.

In the black community, this dilemma is often referred to as "black tax".

The ability to help financially is not an expectation you can opt out of - it has become an obligation. It can be hard to tell the families and communities that raised us that we cannot spend as much as they expect us to. As such, we stretch our means, pretending there is an endless pit of funds available, if only as a means to express our appreciation to them since we might not have succeeded in getting a job in the first place if it was not for the support from some of those relatives.

What worries me about this obligatory mindset regarding black tax is that it has led to people not being able to improve their economic conditions over time. Instead, they sink deeper into debt and fail to build the savings needed to achieve financial security and start building multigenerational wealth.

It is important to start being realistic about our means and limitations. We must have a budget and be honest when that budget has been met. This is likely to be resisted initially, but, hopefully, those around us will learn to understand the concept.

We need to teach them that being responsible about money has a direct positive impact on the future of the individual , their dependants, members of their extended family and the generations that follow.

People who are responsible about money in their adult lives often became that way because someone in their family was a role model in this regard when they were growing up.

The same can be true for primary income earners in large families. If each of them starts managing money in a smart way, the younger generation will one day follow suit.

That way, we will leave behind a culture of wealth creation, not debt accumulation.

I am inspired by Sanlam's recent Wealthsmiths commercial, which is encouraging people to focus on building wealth while being cognisant of the fact that it takes planning, patience and diligence to achieve success. It encourages people to see we take small actions each day to improve our lives, and the same with our money.

Wealth building is not reserved for the select few - it can help all of us secure our own and our family's future.

As the festive season approaches, let us remember that we do not have to spend everything we have, and beyond. We do not need to max out all our credit cards, either - rather leave them behind in a safe place.

Saying no when you have reached your limit, especially during the season, can be hard. The only way to make it through is to focus on what you are saying yes to when you choose to say no.

Saying no to excessive spending during this season is saying yes to financial security and freedom from debt, and starting on a path to building multigenerational wealth.

zipho@ziphosikhakhane.com

Sikhakhane is an international speaker and an executive at Circle Food Group, with a business honours degree from the University of Cape Town and an MBA from Stanford University