Contrary to popular belief, the majority of indebted black professionals get into debt to support family members and not to feed a flashy lifestyle.
This is according to research conducted by Lifecheq, a personal finance advisory organisation based in Cape Town and Johannesburg.
The research, conducted on a sample of 150 Lifecheq clients last year, 84% of those with high debt took a loan to help a family member or to adjust to a loss in the family.
Eighty percent of these professionals are supporting family members financially and otherwise, while 32% got into debt because of a vehicle finance on a luxury car.
The study further shows that 24% of these professionals are working side jobs to make ends meet.
Lifecheq chief executive Abu Addae said this phenomenon, colloquially known as black tax or family tax, refers to a situation where a member of a family, who is considered educated and earning a decent income, takes up responsibility to look after their parents and siblings, and in some cases, the extended family as well.
Addae said while the manner in which families share resources was informed by political and cultural factors, the organisation advises clients on how to make decisions to achieve their life goals, especially how to manage their finances.
But there is always an element of sacrifice when an individual puts their own dreams on hold or gets into debt to help another member of their family.
One of the people trying to find balance between black tax and their own dreams is * Nandi Peters, a university lecturer and eldest of four siblings.
Peters agreed to speak to Weekend Argus on condition that her identity is withheld to protect her family.
The 34-year-old is unmarried with no children, and according to her dreams, would be living in another country and making more money than she currently is.
But, despite her not having children of her own, she has a 20-year-old brother to consider.
The other two siblings between Peters and her brother are married and live with their spouses.
She said she received a bursary loan to pursue her studies and her father did all he could to support her through university.
“I am grateful to my parents for that. And as part of our culture, we stick together and help one another,” she said.
When she got a job as a lecturer at one of the country’s prestigious universities, her being a staff member opened doors for her younger brother, whose university fees were taken care of as a staff benefit.
But, she has to work at the university for longer than she would have liked, to repay his fees in time.
“I had to turn down a lucrative appointment in another country, so I could remain here until my brother finishes his studies,” said Peters.
She considers her career sacrifice as a way of paying back her family for having supported her through university.
“I live at home, because culturally, I cannot leave home until I am married and because my salary is not great to afford a house on my own,” she said.
The sacrifice would be worth it if her brother pulled his weight and worked hard at his studies, she said.
“I don’t think he appreciates the sacrifices made for him.
“He takes it all for granted, and that puts a strain on me because my dreams are further pushed back,” she said.
With the country in a recession and the cost of daily life becoming increasingly more expensive, financial experts advise making use of a financial adviser to craft a plan towards achieving one’s goals and financial freedom.
* Name changed to protect the identity of those involved.
Written By: Noloyiso Mtembu
First Published 11.11.18: https://www.iol.co.za/weekend-argus/news/dispelling-the-myth-of-black-debt-17848828