Earning money in Nigeria especially as a young person can come with a lot of responsibility. You have to figure out your financial journey, cultivate good habits, hone your craft to keep yourself in demand and employable while trying not to go broke. It can be very tricky, especially with the concept of black tax in Nigeria. If you don’t know what black tax is, you’re about to find out.
What is Black tax?
Black tax is a term that originated from South Africa but has now found its way around the world. It simply means the financial aid or support that a person earning money is expected to provide for their immediate and sometimes extended family. Black tax in Nigeria is a very popular idea and a big challenge when it comes to achieving financial independence and stability.
We spoke to three young professionals about the effects on their finances and they had interesting takes:
Where do I start? First of all, it’s not that I don’t make enough money. I do, I think. I’m a software developer, so my earnings are decent. The demands just never end. I do my best to satisfy everyone, but at this point, I’m not sure what to do anymore. I got a bonus after working on a project two months ago and I was hoping I’d use the money to keep myself afloat because I wanted to take a break from work for a month. But it was at that point my mother decided that she wanted to join a committee in her church and needed to donate “something heavy”. That’s just one of the many things that came up during that period. The money finished in a week.
My biggest project right now is my wedding. I’ve asked my fiancé to marry me and she has agreed. I don’t want to keep her waiting for too long. The girl has been with me for six years. It took half that time to find my feet in the importation business. The problem is, every single time I put some money aside for the wedding, someone swallows iron or jumps off a cliff in my hometown. I don’t know how, but every kobo of spare cash I have has gone into treating someone who got bitten by a snake or fell from a palm tree. I just don’t get it. It’s difficult to raise money with so many dependants.
I’m one of those kids who always did well in school, but my family isn’t in a good place financially . Sacrifices have been made to keep me in school. It’s not that I’m not grateful. I am. Sometimes I just wonder if I’ll ever be able to save some money or even buy myself nice things. There are so many needs and my siblings are not earning yet. I’m the first daughter, so this is my responsibility, I guess. I don’t even earn that much. I’m still serving my country. I’m not complaining, but I could use a break and some new shoes. Black tax in Nigeria is bad vibes please.
Black tax can put a significant dent in your finances and make it difficult for you to plan. Since you have no control over the needs of your dependants, you need to be even more intentional about your money habits.
Here are some tips to manage the effects of Black tax on your finances:
- Assess the needs brought before you: Some “needs” aren’t necessary. Carefully assess the situation to see if it is possible to avoid spending money.
- Budget properly: Allocate a certain amount of your income to footing these bills and do your best to stick to your budget. Demands will always come and there will always be needs, but you do have to consider your own future so you will always be in a position to keep rendering financial help.
- Say no if you can’t afford it: This one is a little tricky, but you may need to decline these requests sometimes. If they’re frivolous and unnecessary, it’s okay to say no. If you say yes to every financial request that comes your way, you will stretch yourself thin and run out of funds.
- Get your priorities in order: You may need to figure out whose needs are most important to you, so you don’t run out of money. If it is your immediate family, feel free to prioritize them.
It’s almost christmas and expenses are at an all time high. Always remember that it is up to you to find a comfortable financial balance, even on days when you’re feeling generous. Your future is important and reviewing your finances is essential for growth in the new year.
If you haven’t been saving, it’s not too late to start. Having dependants means you should get as smart as possible with your money and learn good money habits. Save as much as you can. Don’t wait till it’s pouring to plan for a rainy day. Get on Crowdyvest today!