👪Master Family Duties vs. Finances

The rising cost of living is putting more pressure on Africans abroad to support their extended families back home financially.

You can trace this back to the staggering unemployment rates in Africa. (For context, 30% of South Africa’s population is unemployed, while Nigeria’s rates are expected to hit 40.6% this year). Additionally, the lingering effects of the past and the economic ravages of the pandemic are contributors to this phenomenon.

Hence relatives abroad are often thought to be better off— after all, they live in better economies and have access to better opportunities. But immigrant life is not as easy as people back home may think, leading to a lot of pressure to fulfill duties.

This financial responsibility, known as black tax, can be a challenge, but it doesn't have to be a burden.

In today’s newsletter, you’ll learn how to manage black tax by:

Tip 1: Know your limits and stick to them.

It's important to be honest with yourself about what you can afford to help your family financially. Overstretching your budget will only hurt everyone in the long run. Consider your income, expenses, and savings goals when determining how much you can realistically afford to give.

For example, let's say you make $5,000 per month and have $2,000 in monthly expenses. You also have a goal of saving $1,000 per month for retirement. This means that you have $2,000 per month that you can potentially use to help your family financially. However, you should be careful not to exceed this amount, as it could jeopardize your financial security.

Here’s how you can learn what your limits are, and stick to them:

• Create a budget and track your spending. This will help you see where your money is going and identify areas where you can cut back.

• Set financial goals and make a plan to achieve them. This will help you stay motivated and on track.

• Talk to a financial advisor. They can help you create a budget, set financial goals, and develop a plan to manage your black tax.

• Be realistic about what you can afford to help with. If you're struggling to make ends meet, you may not be able to help with everything your family needs.

• Be willing to say No. If you can't afford to help with something, don't be afraid to say No. It's better, to be honest than to overextend yourself and end up in financial trouble.

Tip 2: Money is not your only resource

You can also help your family by providing them with financial education and guidance. Help them develop their financial skills so they can become more self-sufficient. This could involve teaching them how to budget, save money, and invest.

Here are some additional tips for providing financial education and guidance:

• Offer to help your family create a budget and track their spending.

• Teach them how to save money by setting up a savings account and automating their savings contributions.

• Help them invest their money in safe and reliable investments.

• Refer them to financial resources, such as books, websites, and financial advisors.

• Encourage them to take responsibility for their financial future.

Tip 3: Have tough conversations

It's important to be open and honest with your family about your financial situation. This will help them understand your limits and set realistic expectations. Don't be afraid to have difficult conversations about money, and be clear about what you can and cannot afford to help with.

Need help with those tough conversations? These additional tips make it all easier:

• Choose a time when you're both calm and relaxed.

• Start by explaining your financial situation and why you're concerned about black tax.

• Be clear about what you can and cannot afford to help with.

• Listen to your family's concerns and try to find a solution that works for everyone.

• Be willing to compromise.

Tip 4: Look after yourself

Don't sacrifice your own mental, physical, and financial health to help your family. Make sure you're taking care of yourself so you can be there for them in the long run. This could mean setting boundaries, taking time for yourself, and seeking professional help if needed.

What can you do to look after yourself more? We’ve got some helpful pointers:

• Set boundaries with your family. Let them know that you're willing to help, but you also need to take care of yourself.

• Take time for yourself each day. This could mean reading, going for a walk, or spending time with friends.

• Seek professional help if you're struggling to manage your stress or anxiety.

The Bottomline

Black tax can be a challenge, but it doesn't have to be a burden. By following these tips, you can positively navigate black tax and strengthen your family ties.

Here are some extra tips for positively navigating black tax:

• Be proactive. Don't wait for your family to come to you with their financial needs. Instead, take the initiative to talk to them about your financial situation and what you can and cannot afford to help with.

• Be flexible. Things change, so be prepared to adjust your plans as needed. If you lose your job or have other unexpected expenses, you may need to adjust the amount of money you can afford to give to your family.

• Be patient. It may take time for your family to adjust to the new financial reality. Be patient with them and help them to understand your limits.

• Be positive. Black tax can be a source of stress and conflict, but it can also be an opportunity to strengthen your family ties. Focus on the positive aspects of black tax and use it as a way to build a stronger family unit.

If you're struggling to manage black tax, please reach out to a financial advisor or counselor for help. They can help you develop a plan to manage your black tax in a way that is positive for you and your family.

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