Black tax: Your disposable income is under attack from ‘urgent 2k’

Banks begin charging taxes on bonds | securities

Black tax is a part of your disposable income that goes to upsetting bills from parents, siblings, friends and even extended family members. ‘Urgent 2k’ is a jargon used by youth to describe black tax.

In the black race or African household it is responsible to care for both your immediate and extended family needs. It is an honourable thing to do, until it becomes detrimental to your income.

Black tax has gone beyond just financial needs from family members, friends, acquaintances and generally to anyone that feels entitled to one’s money or thinks you are more privileged.

The term ‘urgent 2k’ is very common amongst the younger generation, it is used to request for N2000 that would most likely not be returned.

Chuks, a second child in a family of five, said that during the Easter break he had spent over N30,000 on black tax.

“All of my siblings came up with one request or the other, of which I could not say no to because it is how we were brought up, to help one another, they also assist when they can but it can sometimes be a burden.”

In developing countries such as Nigeria, with an unemployment rate estimated to reach 33 percent, poverty rate of 42.6 percent, and a minimum wage of N30,000 per month.

This means that over 95 million Nigerians live in poverty and over 80 million are unemployed, with an average number of families being 5 in number. An average of 3-5 persons depends on whoever is seen as the privileged one in the family.

The African mentality that it takes a village to raise a child does not also help the situation.

A Nigerian source living in the US expressed the responsibility that comes with living in the US but having a family in a developing country like Nigeria.

“I am comfortable where I am, I need to make home a little more comfortable for those at home too. It is huge responsibility but I embrace it,” he said.

 

Furthermore, he said, “My family takes care of the daily needs but whenever bulk money is required it usually falls on me.”

In developed countries with better economic situations, black tax is not rampant as there are also resources like food stamps, financial aids for tuition to help its citizens. There is also a bad habit of people borrowing and not willing to pay back.

“As regards borrowing people money, I have decided to stop that because I don’t think they prioritize paying me back because they somehow feel I don’t have need for my money,” he said.

Managing the constant financial demands can get overwhelming and can become a strain on your financial goal.

Here are a few ways you can manage

Make a budget for your Black Tax- Putting aside a certain amount monthly and sticking to it will curb excessive giving into demands of family and friends.

Also creating a list and prioritising according to urgency or importance, remember that you are your first priority.

Establish a time frame for your support – Create a time frame for those you are helping, so they do not become a constant burden. There can be exceptions to your elderly parents as they might not have other source of income.

Collaboration – It is important to not take the figure of a saviour in your friendship and family circle, collaborate with other members of the family or friends to empower those in need in the circle. Trust funds, skill empowerment programmes, health insurance plan and the likes will help ease the burden off one person.

Have a Financial Goal – With a financial goal in mind it helps to curtail black tax. Stick to a balanced spending, saving and investment plan. This will also prevent you from being a burden to others.

Demand repayment Plan – It is very important to ask for a repayment plan for those that ask for loans. Create an environment amongst friends and family where they can borrow and return by putting into writing.

Written by Eniola Olatunji

Earlier featured on BusinessDay.

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