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How ‘Black Tax’ Impacts You Financially & How to Manage It Better
Money Management

How ‘Black Tax’ Impacts You Financially & How to Manage It Better

Amid the struggles of trying to meet your financial goals, there is always an unspoken challenge for many young professionals in Africa - ‘black tax.’ 

It is inescapable for many young adults in Africa to carry the financial burden of supporting their extended families. It is a cultural obligation. It is expected of you. The calls come in when you least expect, and in many cases, you cannot say no. 

This is especially so for firstborn children. However, the burden is not only limited to older children. Irrespective of what number you are on the family line, when you are the first person in the family to reach a certain level of success, the burden of supporting the rest of the family inevitably falls on you. 

What Is ‘Black Tax’ in a Typical African Family

Black tax’ is a term used to describe the duty of a black child to support their extended family financially: supporting their elderly parents, educating their siblings, building family homes, funding their sibling businesses, etc. 

This phenomenon mainly affects middle and lower-class families - the upper class rarely expects support from their children. In the actual sense, ‘black tax’ is a positive thing that was initially meant to be a way to propel the whole family out of poverty. 

As the first child, the family sacrifices a lot of their resources to help raise you into a position that will enable you to lend a hand to the rest of the family. As such, it is your duty to turn around and help offload a little bit of your parents’ burden. 

If you watch Nollywood films, you have probably seen this depicted many times. A young village boy in the city is constantly reminded that his family in the village is looking up to him to save them. This is perfectly okay as it benefits the community as a whole. 

However, the issue arises when the said parents transfer all the burden to you and expect you to step into their shoes because they have now completed their duty. As a result, this lays a massive burden on your shoulders, making it harder for you to move up social classes.

Family Love or Burden?

No one can choose where to be born. If you were born in the lower class (those who live in the slums, for example), your ‘black tax’ responsibility starts even as soon as you are born. Some parents even profess to have children only to have someone to care for them in old age.

A very common phrase in many African households is ‘ remember where you are coming from.’ From a young age, you are taught that the family future lies in your hands. Hence, when you get your first job, you do not have a choice but to spend all your income helping your family. 

Sometimes it is not by choice. Some families even guilt trip you into giving - demands from family are endless.

The burden of financially supporting a whole group of people is tasking. Even when you do not have enough to give, it is still expected of you to share. This puts you between a rock and a hard place and, in many cases, limits your financial growth.  Also, it is not surprising that these obligations come as demanding, tiring, and grossly unappreciated. 

Therefore, it is advisable to treat these responsibilities as your Corporate Social Responsibility - like companies do. Companies do not give all their profit to charity, and you shouldn’t either. 

Prioritise your financial needs first before you give back to your community. After all, no one will help you financially if you cannot take care of yourself. 

How ‘Black Tax’ Is Impacting the Young Generation, Especially After the Pandemic

Covid-19 has brought many economic challenges to the young generation. For many, jobs were lost, businesses went bankrupt, income plummeted, etc. Situations are different for different people, but everyone has had their own set of struggles.

But it is not only the working class that has felt the effects of the pandemic. Families at home are also in critical condition, and with this, the pressure to send home more money has also increased. 

So now the stress has doubled. You are not only trying to stay financially afloat, mask up and sanitize to keep the virus away, but you are also struggling to make sure people at home do not go hungry. 

It’s no wonder there is an escalation of mental health problems among the youth. 

How to Give Back Without Breaking the Camel’s Back

It will be daunting to say no to a struggling family member when you are making a sustainable income. 

However, there are ways you can balance the cultural obligation and still meet your financial goals and successfully build wealth for your future generations.

Define Your Cashflow

The first step is to assess your income. How much do you have coming in every month? After you get a clear view of your income, then establish where your money is going. Analyze your expenses for the last 3-6 months to get a clear picture of how you spend your income. 

To have an even clearer view, separate all the expenses into the following categories;

  • Living expenses
  • Savings 
  • Investments
  • Monetary support, etc. 

Once you have your summary, then analyze each subsection. Are you meeting your financial needs appropriately? How much went out as monetary support? Did a large portion of your income go to support your family? What did your support money cover? Did it cover a basic necessity for the said family member? 

These questions will help you know where you stand financially and if the money spent on family is really necessary.

Define Your Financial Priorities

Once you have a clear picture of your cash flow, it is time to decide your priorities. Always remember that you come first.

Just like flight attendants always remind passengers during the safety announcement before takeoff, be sure to put on your oxygen mask first before assisting someone else. It will be impossible to help others if you run out of oxygen first. 

The best way to do this is first to assess your current financial situation. What do you have at hand? How much is in your savings account? Do you have an emergency fund? Do you have investments? 

Then think about your financial goals. What are your short-term and long-term goals? Do you have a vivid route to reach these goals? Are you on track to achieving these goals, and what is holding you back? 

Once you have a clear view of your personal goals, it is now time to establish priorities. Remember, your financial goals come first. After which, you can now analyze the needs of those you want to help. Put them into categories. 

For example, parents may be a priority in some families, while siblings are the priority in others. There is no right formula. Your answer will depend on your family’s needs. Who needs school fees? Will your parents go hungry if you do not send them money for groceries?

Encourage Them to Be Independent

It is in human nature to want to rely on others. People in your life might try to push the boundaries and take advantage of your kind heart. Therefore, it is vital to set expectations. Do not just give money to anyone because they ask for it. 

An excellent example of setting clear boundaries is in the story of the late Billionaire industrialist Chris Kirubi. Dr. Kirubi took over the responsibilities of raising his younger brother when they were orphaned at a young age. 

However, according to his younger brother, Michael Kirubi, “You can go to him asking money for this and that, but he might tell you ‘go and make your money,’ but if you go there and say I want money for education, he will say how much and right away you will get it.” This is setting apparent boundaries and expectations. 

So, here are a few strategies to help you get started;

  • Set clear expectations. If you are paying school fees for someone, make it clear that you will not pay for a retake if they fail the first try.
  • Offer solutions instead of cash. Instead of sending money for hospital bills every time someone is sick, offer to subscribe to medical insurance and guide them to pay the premiums.
  • Avoid loans. This is a rule of thumb. Do not give loans to family and friends. Instead, offer to gift them an amount you can afford to lose. 

Empower Family Members With Financial Knowledge

In addition to setting expectations, encourage family members to fish instead of giving them the fish. Instead of funding your siblings to start businesses, you can help them draw good business plans and find angel investors. 

Better still, teach them how to do it themselves - provide them with learning resources. Teach them the importance of financial management; budgeting, saving, investments, etc. 

The same applies to your parents. Encourage them to go into business and teach them the ropes. If they have ancestral land, encourage them to go into farming - you can even hire a farm consultant if you have to. 

So instead of having all the burdens on your shoulders indefinitely. It is essential to empower your dependants to not rely on you much in the future. This way, you have fulfilled your cultural obligation while freeing yourself from the financial burden. 


They say what doesn’t kill you makes you stronger - however, although the burden of ‘black tax’ might not kill you, it could very well leave you financially crippled. 

So it is time to take matters into your own hands. They are family members, so you can not ignore them. Instead, learn how to manage the situation better. Learn how to prioritise your needs and set clear boundaries. This way, everyone will win. 

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Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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