01 Jul Black Tax: Another Debt Trap?
Coming from a lower or middle class background, a South African youth is the first or possibly the second generation in their family to attend a tertiary institution. The pressure and burden is felt to put this young person through tertiary and reap the financial rewards as soon as possible from their immediate family and often extended family. This reap may involve sending money back home for parents living expenses, school fees for younger siblings, financial contributions to cultural ceremonies and emergencies and home extensions
This is essentially what is coined in the media as “Black Tax”. The recent graduate is burdened with a sense of financial indebtedness to their family and is perceived as an agent of change to the family. The saviour of the family who will ensure a better life is given to all. All of this is financed through income and also debt. There is a surge of people between the ages 18 and 35 applying becoming over indebted and entering processes such as debt consolidation and debt review.
We acknowledge existence of such an obligation and even beyond it, a sense of Ubuntu exists in all of us to help those around us. Young people must be wary to not make financial mistakes that may have greater and unintended consequences on their personal finances. Although debt remedies such as debt review are essential debt rescue measures, young people must objectively look at these debt remedies before selecting one
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