Dear Khanyi,I am 24 years old and just started my first job. I’ve been waiting for this moment for the longest time and been looking forward to finally saving towards all the things I’ve wanted and needed while growing up. One thing I did not take into consideration though, was black tax. The fact that I have to send back almost half of my salary to help out at home, means that I won’t be able to save the money I need to put a deposit towards a car this year. I obviously want to keep contributing at home, but how do I do it in a way that benefits both me and my family instead of leaving me financially crippled each month?
Hi Millennial,Congratulations on your new job! This is an exciting time of your life and you no doubt feel on top of the world.
Black tax is a reality for the majority of South Africa’s population, and although many contribute monthly towards the upkeep of families back home it’s important that everyone establishes an understanding.
Firstly, sit your family down and explain the situation. Many times you’ll find that if you are transparent about your goals, you can negotiate a certain amount to contribute back home. You’ll find that your family will probably be more understanding than you think. Remember not to feel as if you owe the family anything. And always stay honest with your family about your financial position, and you’ll avoid getting into debt because you’re trying to make ends meet.
Secondly, organise your finances so that you contribute to every area of your life. Draw up a budget for yourself that will help keep things in perspective. When all is mapped out in black and white, it’s easy to see exactly where your money is going and maybe even find ways to put more into your savings account. The budget will really help in pinning down exactly how much goes towards your living expenses, the contribution to your family as well as your savings goals. The sooner you can start saving, no matter how small, the better. And with regards to saving for that car, put money away towards a deposit that you can put down when you’re ready. A deposit will help decrease your overall monthly instalment costs, and strengthen your credit record.
Yours in financial health and prosperity,
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