Thread by @mentorshipzim

The final thread of the day.
I am going to touch on the controversial personal finance topic of "black tax." On a Facebook group that I am part of, A lady in the diaspora asked, "what is reasonable to send for monthly upkeep for a family of 4?"
A debate on black tax ensued.

As part of my financial education workshops, we talk about how to align financial goals in families. Furthermore when discussing budgeting, we look at the likelihood of family needs making their way to an individual or couple's budget. So let's talk, what is black tax anyway?

According to the Urban Dictionary black tax is the extra money that black professionals are expected to give every month to support their less fortunate family and extended families. In Zim this term has really begun to gain popularity recently, why?

we have a culture of interdependence, “kubatsirana” as we say. There is also an expectation that if you take care of your children and take them to school, they will one day take care of you. "Chirere chigozokurerawo" a popular shona proverb used to explain why we ought to help

So as soon as you secure a job, there is excitement across the whole family because this means, we now have someone to take care of us whenever we are in need. There are various expectations on what one will do with their income or paycheck...

This includes gifts to your parents/grandparents, taking care of orphaned relatives, and also remembering the extended relatives in the village whenever you visit or when they call because of a financial need. these cultural expectations are complicated by religious beliefs too.

PS: I am Christian myself but I do not want to get into a religious debate on giving. So I won't go into the specific details of the religious beliefs, I will focus on detailing the financial implications that black tax can have on financial planning for an individual or family.

1. Family expectations can increase monthly financial obligations,reducing an individual's ability to save or invest. 2.The black tax burden doubles if the individual is in diaspora where financial fortunes are seemingly better so making it harder for them to ignore any requests

3.The financial stress caused by constant requests can strain relationships and cause conflicts in families (ask couples)
4.Emergencies within the family can derail an individual’s financial plan if they did not have an emergency fund or savings available.

So what can you do if you are struggling to manage family expectations on your finances: Here are a few practical tips.

1. Run your budget and put a figure for giving towards family needs (that you are comfortable with). It could be a specific amount or a percentage of your income. Once that amount runs out, you don't have money. And rightly so, because that budget line is spent.

For emergencies like funerals or medical bills, have a separate e-fund that you draw from. If that is also finished, then you do not have money. This helps you to make sure that you do not solve everyone else's problems & yet be left with no money for rent or school fees for kids

2. Never EVER feel like you are the answer to everyone's problems. You will never be able to take care of everyone's living expenses. That's unreasonable. If you die today, people who seem to "only be alive" because of your remittances, will continue to live. Sorry to be blunt

So pick and choose. What will you help with? School fees? Or rent? or monthly groceries? Be honest with your family about what you can do. Remember point one, your budget informs you of your capacity.

3. As part of family conversation, encourage each other to work and generate something. If you are the "MBINGA" in the family, do not come up with an idea, no! Allow people to come up with something they may want to do then offer to partner with them. This has to be tactful.

4. If you can, run a side hustle that has income dedicated to supporting family especially if you are responsible for elderly relatives and orphaned children. It could be Avon, being a runner, doing hair over the weekends etc. We did this with my husband.

We started a business with the intention of helping family members with a huge family project, school fees for the young ones, and family emergencies. It has gone a long way in helping the family without stretching our monthly income or going without what we love.

We have dreams and goals for our own family that we do not want to completely ignore because we are helping the rest of the family. This is a critical balance in personal financial management.

in a nutshell, finances are not easy to manage in our challenging environment. We have a volatile economic environment & huge needs within our families. Many of us are struggling financially. However, with a few practical tips and principles, we can do better financially.

I hope today's session wrapped up nicely the amazing content that we have had from @prosmoon @kudzie_sharara @Dudu_Nyirongo and @DannyChax
My focus today was to sensitize the youth on various issues and perspectives around personal finance management & small business finance.

with that said, a massive THANK YOU to the @mentorshipzim for trusting me with this platform. I will stay on for questions for an hour or two until I hand over to the admin.

PS: there is a free Financial Management course & various articles on thefinancewiz.co