Last week, we discussed at length about Black Tax and its significance on the socio-economic structure of the African family system. In the article, we established that Black Tax is an informal financial obligation where individuals, often from middle-class or relatively affluent backgrounds, provide support for their extended families. This support can cover expenses such as education, healthcare, and even daily living costs.
Black Tax is deeply rooted in African cultural values of family and community, but it also places a significant financial strain on those who are expected to provide.
So, the question now is, how do you manage these financial obligations without jeopardizing your own financial health or personal goals? In this follow-up article, we’ll explore strategies for managing financial expectations from extended family members while maintaining your financial independence.
Understanding the African Family Structure and the Scope of Family Obligations
In many African communities, the family extends far beyond the nuclear unit. Unlike in the West, where family often refers to just parents and children, in Africa, the family includes grandparents, cousins, uncles, aunts, and even distant relatives you may have only met once or twice. The African family is a complex web of relationships, and the expectation of financial support can extend to anyone within that web.
For example, in Nigeria, family households are often large, with the average household size being over five members, and some households containing as many as ten or more dependents. These dependents often rely on the more financially successful members of the family for upkeep, education, and other essential needs. This creates a dynamic where individuals, particularly those who have “made it,” are expected to not only care for their immediate family but also for distant relatives.
This raises a critical question: How do you balance these responsibilities with your own financial well-being? To answer this question, we need to first of all understand the financial realities on ground.
The Financial Realities of Supporting Extended Family Members
1. The Pressure of Dependents
The economic burden on the average working individual in many African countries is compounded by the number of dependents they are expected to support. Unlike the West, where social safety nets or government welfare programs provide some support, many African families rely entirely on their employed family members.
A great instance is Nigeria where the dependency ratio (the number of dependents per working-age individual) is high. This often leads to a situation where a single individual is responsible for the financial well-being of multiple people. Given the current state of Nigeria’s economy—characterized by rising inflation, stagnant wages, and a high cost of living—this burden can become overwhelming.
2. Rising Costs and Dwindling Resources
With inflation rates skyrocketing, managing financial obligations to extended family members has only become more difficult. Take for example the basic cost of living in Nigeria, where household expenses, particularly for food, have dramatically increased. A bag of rice that once cost ₦10,000 now retails for around ₦100,000. In such conditions, even the most well-intentioned family members may find themselves struggling to maintain their own standard of living while also supporting others.
This financial strain can leave you feeling trapped—torn between wanting to help and recognizing the limits of your own financial capacity.
Strategies for Managing Financial Obligations
While the cultural expectations tied to Black Tax may not disappear, there are practical ways to manage these responsibilities without compromising your financial future. Here are a few strategies to consider:
1. Set Clear Financial Boundaries
One of the most effective ways to manage financial obligations to extended family members is by setting clear boundaries. This means being upfront with your family about what you can and cannot afford. It’s important to understand that saying “no” is not a rejection of your family; rather, it’s a way of protecting your own financial well-being.
How to do this:
• Create a family budget: Set aside a specific portion of your income each month that you’re willing to allocate to family support. For example, if you earn ₦500,000 per month, you might decide to allocate 10% (₦50,000) for family-related expenses. Once that amount is depleted, you can politely decline additional requests until the next month.
• Communicate openly: Have candid conversations with family members about your financial situation. Let them know that while you’re willing to help, you also have your own financial responsibilities that must come first.
2. Prioritize Urgent Needs Over Wants
Not all financial requests from family members are created equal. Some are urgent and necessary (e.g. medical emergencies or school fees), while others are optional (e.g, funding a social gathering or a non-critical purchase). It’s essential to develop a system for evaluating which requests you can reasonably meet and which ones can be postponed or declined.
How to do this:
• Categorize requests: Create a mental or physical list that ranks the importance of each financial request. Urgent needs like healthcare or education should take precedence over non-essential expenses.
• Offer partial assistance: If you can’t cover the full amount requested, consider offering partial assistance. For example, if a family member needs ₦100,000 for school fees, you might contribute ₦40,000 and suggest they seek additional support elsewhere.
3. Contribute in Non-Financial Ways
Helping your family doesn’t always have to involve money. Sometimes, offering non-financial assistance can be just as valuable. For example, providing career advice, mentorship, connecting them to job/business opportunities, or even helping a family member access educational resources can have a long-term impact that goes beyond immediate financial support.
How to do this:
• Share knowledge: If you have expertise in a particular field, offer to help family members develop skills that can improve their earning potential. Also, if you come across a job or business opportunity that you think they can apply for, then share it with them. Who knows? They just might get selected.
• Encourage entrepreneurship: Support family members in starting small businesses by offering advice or helping them create business plans instead of just handing over money. This approach fosters long-term financial independence rather than temporary relief.
4. Create an Emergency Fund for Family Support
An emergency fund is not just for personal use—it can also be a safety net for family-related expenses. Setting aside money specifically for family emergencies allows you to support your loved ones without dipping into your own savings or going into debt.
How to do this:
• Open a separate account: Consider opening a dedicated savings account for family emergencies. You can deposit a small portion of your income into this account regularly, so you’re prepared when unexpected family needs arise.
• Set contribution limits: Decide in advance how much you’re willing to contribute in the event of a family emergency. This ensures that your emergency fund doesn’t become depleted too quickly.
5. Encourage Financial Independence
As a little addition to our third point, one of the most sustainable ways to manage financial obligations to extended family members is by encouraging financial independence within the family. This can involve helping family members develop skills, start businesses, or pursue education that will enable them to become self-sufficient over time.
How to do this:
• Promote financial literacy: Offer to teach family members basic financial skills, such as budgeting, saving, and investing. This empowers them to manage their own finances more effectively.• Encourage collective projects: Instead of providing ongoing financial support, encourage the family to pool resources for collective investments (e.g. a family-run business or property). This shifts the focus from individual dependence to collective wealth-building.
The Emotional Side of Family Obligations
It’s worth noting that managing financial obligations to extended family members is not just about budgeting—it’s also about navigating the emotional complexities that come with saying “no” or setting limits. African cultures emphasize reciprocity and the idea that family members should always be willing to help one another. Turning down a request for financial support can lead to feelings of guilt, shame, or even strained relationships.
However, it’s important to remember that financial self-care is just as important as helping others. By taking care of your own financial well-being, you’re better positioned to provide meaningful support to your family in the long run. Learning to manage these emotional dynamics is key to maintaining healthy family relationships while also protecting your financial future.
Conclusion
In the end, while Black Tax and the broader concept of family responsibility are deeply ingrained in African culture, it’s crucial to approach these financial obligations in a way that considers both your family’s needs and your own financial well-being. By carefully implementing a few or all the points we’ve outlined, it’s possible to fulfill family obligations while ensuring your own financial stability.
Remember, the goal is not to eliminate family support entirely but to create a sustainable system that allows both the giver and receiver to thrive.
As the African proverb says, “If you want to go fast, go alone. If you want to go far, go together.” The key is finding the right pace and path for your family’s journey—one that uplifts both you and your loved ones.
Bravewood is licensed by the Central Bank of Nigeria to provide investments with low risk and high returns for Nigerian professionals.
