Black Tax: Six ways to Manage it and Financial Freedom.

My life has not been the same since I learned about the black tax and realized that my income is not mine alone. I always dreaded receiving a phone call from my uncle or another relative at the end of the month. 

When that call comes through you can already tell h

\ow that conversation will go. There is money needed for medical expenses, school fees, funeral expenses, or a leaky roof. These calls are usually urgent and cost you money that was not in your budget.

Black Tax is a term for an African professional or entrepreneur’s obligation to support their extended family financially, which includes supporting their elderly parents, educating their siblings, building family homes, financing their siblings’ businesses, etc.

The philosophy behind the Black tax forms part of the backbone of African communities. It is through this ancient law of sacrifice that an African child can change the course of their destiny.  In spite of this, unbudgeted expenses can cripple your plans for financial freedom.

A report by the Institute of Policy Studies revealed that 37% of black families in the US (where black tax is also common) have debts that are equal to or greater than their assets.

Our parents’ financial and retirement plan was to give birth to more children who will take care of their finances when they get older. If you have a girl, she was also worth the dowry that the future husband brings. 

As an extreme example, I know of a family who would not let their daughter be buried in her matrimonial home because her husband had not paid the dowry. 

How to manage family /black tax

Black tax in Kenya is a phenomenon that we have to consider when thinking of our financial freedom. Likely, we may not get rid of it for a few more generations, however, we must get organized and learn a way to manage it. 

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  • Learn to Say NO

We can learn how to say NO and try to empower our relatives to be more financially independent. However, this will take time, and personal effort, and sometimes cause conflict with your loved ones. 

Managing your family’s expectation of your income is one of the most effective way to manage black tax, however, this doesn’t cater to the obligation you are expected to provide for the family.

  • Budget Group Medical Insurance 

The best solution is to plan for it and insure yourself from those unexpected expected expenses with Insurance and other investment strategies.

With medical insurance covers for your relatives in shags/ rural areas you will not get impromptu calls from home asking for money to go to the hospital. 

The insurance market has grown and there are subsidized or budget medical insurance packages that would cater to those who live in rural areas and access good health care in rural towns. 

  • Senior medical insurance package

Your insurance advisor will also provide you with a senior medical insurance package for the elderly parents whom we want to ensure they live comfortably. 

  • Last expense Insurance package

Funeral expense insurance packages go a long way in reducing the burden of funeral expenses for the briefed family than what-apps and Harambee contributions.

These packages include your family, siblings, parents, and parents-in-law.

  • Education policies

If you have siblings and children that you need to help educate, you could take up an education policy to help you save for their college or high school fees. Being prepared is better than disrupting your finances every term.

  • Life Insurance policies.

For us to break this tradition of depending on our children for future finances. We should come up with ways to create generational wealth through life insurance. With a life insurance policy, you protect yourself and your family from having to depend on other relatives for their income and finances in the future. 


We must find a way to stop burdening our children with our expenses with every generation. 

African traditions were made for good reasons. They ensure the continuity of family legacies and remove them from poverty. 

However, we can pick the good lessons from some practices and learn new lessons that work better for the modern family.  With a good financial plan, black tax should not pull you or your family back from achieving your financial goals.


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