Remittances and Black Tax 2: Dealing with and Living with Black Tax
Now that we know that there are historical reasons behind black tax – YOU can STOP blaming yourself or feeling let down by your parents. Anger and guilt can do a lot of harm to the soul.
First step: Develop an understanding of your financial responsibility
Before you even have the big talk with the family about money (these rarely end well) do your math. If your family expenses are not fixed, then try to go over your spending over the last few years – itemize each expenditure and cost, for example:
- Health care for mom $200 every month or 6 months
- Rent for the parents -$200 every month
- School fees for your baby sister and or niece $1,000 a year
- Agriculture inputs for gogo $300/year
- Groceries for the in-laws $500
Even if you are married, I would suggest doing this first part individually, then comparing your numbers and expenditures. You can decide on a plan together later.
Second Step: Evaluate each expense and prioritize
- Is this a necessary expense? If I do not pay for it, will it ruin someone’s life?
One of our favorite married couple mentors sat my husband and I down and asked us this question. Is this an expense that we need to be taking care of? Are you the only person who can take care of your niece’s tuition? What is the situation with the parents? If they are not late, are the parents in a position to make part payments for this expense or another?
- Rank the expenses in order of importance
You cannot cover every expense. You have to be honest with yourself about what you can afford and what you need to be paying for. If an expense is sinking you into debt, cut out other expenditures. You are the only one who can tell you an honest story about what it is that you can afford
- Cut out any frivolous expenses
My husband and I realized that we were paying for a lot of things that we shouldn’t have been. I also spoke to my therapist because one time I was feeling overwhelmed, and she said – people will never stop asking for money. You have to say no. I no longer give people cash for leisure trips. I cannot afford to pay for every church trip or kid’s school trip. I also no longer provide start-up funds for business projects because as my therapist gently reminded me – I am not a bank.
A lot of diaspora friends have lost a lot of money to half baked ideas that sink your money. But this is something that you need to decide for yourself.
- Decide if you are giving someone a loan or a gift.
Third Step: PLUG IT INTO THE BUDGET
Now that you know your black tax/remittance responsibilities plug the numbers into your budget and treat that number like any monthly bill. If the money you spend ranges from let’s say $100 to $500 then you want to set aside maybe $250 each month. THESE FUNDS ARE NOT PART OF THE EMERGENCY FUND. You know you will spend this much so set it aside.
If you are consistently going over budget, you will need to adjust some things in your budget to make this bill fit into the equation.
FOURTH STEP: Family talk (only and only if you need to)
If possible, you may want to have an honest conversation with your family about how much you can afford to give them each month. I will write a separate post with a step by step guide on opening up this kind of conversation. It does not have to be a big thing, and not everyone in the family needs to know your plans. I discussed my ideas with my mom, and that was it.
Because life happens and sometimes, we need to spend a little more – I keep what I call a Zimbabwe emergency fund. I put in $30 a month in one acorns account just for this and minor emergencies.
I do not have a foolproof plan for dealing with back tax, and I still get shocked once in a while– please share your tips for a remittance/black tax survival.