Warning: This column contains sarcasm and brutal honesty. Reader discretion is advised.
It’s been a while, I know.
To be honest, I’ve had some trouble coming up with anything meaningful to say over the last few months. I am still struggling but have decided to meet readers halfway and say something mean. Unfortunately, the Oxford English Dictionary doesn’t recognise the word “ingful” yet.
You see, it’s one thing to tell people to save and invest when things are going well. It’s something different when expenses are skyrocketing while salary increases seem to have gone missing. Taxes have been rising, the fuel price has gone crazy, the rand is in the doldrums and despite some columnists best attempts at writing up the JSE’s performance with their never-ending cheerfulness, money has been tight.
To add insult to injury, the expense mob has come knocking.
First, the City of Johannesburg (CoJ) in its wisdom decided to reclassify my high density residential property as a sectional title business. I checked the new market value during the revaluation process but must admit that I was naïve enough to think that it was impossible that the “category” of a run-of-the-mill residential property could be changed during the process. So in July I got slapped with a bill that was more than three times the usual amount, even though the valuation was only 18% more. Of course, I have not been paying the monthly bill in full, but my research suggests that it can cost more than R5 000 to get the classification fixed by an outside party. (As a law-abiding citizen, I have turned a deaf ear to suggestions of using an inside party.)
I realise that I can try and fix it myself, but my estimation is that the cardiologist I would need afterwards might be even more expensive. For the moment, I am trying to find comfort in the fact that the CoJ’s aerial camera technology has now advanced to the point where they can spot people burning the midnight oil at their homes while simultaneously, with a little help from Eskom, taking steps to stop them from burnout.
And then there is my car. Regular readers of this column will remember Goldie, my Toyota. She recently turned 13, still has relatively few kilometres on the clock and is as reliable as ever. But when I picked her up after her recent service, I almost had a heart attack. (In hindsight, I should have scheduled my call to the CoJ call centre on the same day – I could have saved a lot in cardiologist fees.) The service agent handed me a quote for “urgent work”. Apparently, the only things that didn’t need to be replaced were the indicators (I assume this is only because it is not a BMW). Luckily the service centre was kind enough to keep the quote a whopping R550 lower than the car’s insured value. Business must be booming.
“Didn’t you hear any strange noises while driving?” the service agent asked.
Lady, the strange noises you are hearing are not coming from my car, that I can assure you, I thought.
I may be ignorant, but there was absolutely no indication that there was anything wrong. Despite suggestions to the contrary, men don’t name their cars after women because of appearance – it’s because you know immediately when you have neglected to pay attention …
For someone who carefully budgets and plans ahead for months where irregular expenses will have to be paid, this has been a tough pill to swallow.
The unfortunate reality is that no matter how careful you manage your finances, there are bound to be unexpected mishaps. The idea is to structure your financial plan to give you the best chance of overcoming these roadblocks so that the setback is only temporary, and you don’t fall into a debt spiral.
Unfortunately, planning for such eventualities may fall by the wayside. As humans we are wired to focus on immediate needs. In South Africa, this may be exacerbated by unemployment and inequality, which leave many people with little choice but to try and make ends meet today.
According to the Momentum/Unisa Household Financial Wellness Index 2017, only 17% of South Africans who are considered financially well have a comprehensive plan that includes providing for emergencies and unplanned expenses. Only about 60% of them will be able to cope with an emergency requiring R20 000. (If you are part of the 40%, consider this a warning not to visit a certain service centre in Johannesburg.) The stats are much worse for those who are financially unwell – almost three-quarters of households.
My experience underscores the importance of an emergency fund. But before you dip into your rainy-day account, look at the situation critically. Just because someone comes knocking with a quote or invoice, it doesn’t necessarily mean that it must be incurred or paid. As I write here, I am convinced that at least some aspect of the repairs is not immediately necessary.
Moreover, there is often a case to be made for shopping around. Although this type of expense makes a like-for-like comparison difficult, the first comparative quote I obtained (40% lower) suggests that there is significant scope to negotiate a better offer. Unfortunately, the CoJ situation doesn’t leave me with all that many options.
With the economy expected to remain under strain for the foreseeable future (Moody’s on Thursday revised its real economic growth forecast from 1.5% to between 0.7% and 1% for 2018) it is imperative to take a hard look at your finances, update and revise your budget (and stick to it) and ensure that you have some cash for emergencies.
Also, even if sarcasm is not your thing, try and see the lighter side of things. It can save you a lot in cardiologist fees.
PS:. If anyone knows a mechanic in the northern or western parts of Johannesburg who would be able to pass a lie detector test (they don’t have to pass on their first attempt), kindly send me their details.