Facts About the “Black Tax”
Although this isn’t a tax in the IRS code, this is a real tax in the black families. We usually feel the black tax when a first-in-the-family college graduate, professional, or others who “make it” are suddenly obligated to financially care for their family.
While there’s nothing wrong with helping family members, healthy boundaries are a must. Here are a few tips to minimize the Black tax:
- Put on your oxygen mask first– prioritize your savings and retirement goals. There are no loans for retirement and you can be a better resource from a place of abundance vs. lack
- Create a line items in your budget for giving, and when you’ve exhausted those dollars, you’ve exhausted that budget!
- Buy life insurance for a family member you would have to take financial responsibility for if they passed away
- Think about other ways you can offer support beyond money. Think time, resources, or creative ideas for them to get money on their own Last and certainly not least, Be clear about where your help begins and ends
Saying no to family can be tough, but remember your goals matter and you don’t have to be anybody’s savior. If generational wealth is your goal, you’ll need to stop overextending yourself financially
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