Spendthrift

Holiday
In the cheesy movie trailer voice: “This Holiday Season…Mylky goes where she’s never gone before! Well…technically, where she was her whole life, but read on!”

Some Context for the Kids

I’d been “planning” to go home all year.

I started my internship in January this year, hundreds of kilometers from home, in a semi-rural township that I didn’t even know existed until about three weeks before I had to move. It was the first time I’d been away from home and family in any significant capacity–although I spent my high school years away in boarding school and then subsequent University years in residence, I still lived in the same province as my relatives and at least got to go home every six months at the very least. I’d never been so truly independent, and although I relished the freedom and excitement of new tastes and sounds, I desperately missed my family.

Internship rotations can last anywhere between two and four months, and the length of your permitted leave is determined depending on the length of the rotation. There is no airport where I work and now live, and the nearest ones are hours and hours of driving away, which means that at least a day or two of any leave I get could be lost to just traveling to the nearest airport!

My first rotation was four months long, so I got seven full days. That would have been the ideal time to head home and touch base with my extended family…except…

The days allocated to my leave were when I was actually six figures in debt and effectively quite broke. I’d also spent those first few months sending significant portions of my take home pay home to help smooth out some financial issues my family was having. My mother, who moved to one of the airport-containing cities for work many years ago, told me that she was eager to see me anyway even though I wouldn’t be able to do the typical dance of going home and making it rain! This would have been fine–I’m a homebody and frugal anyway–if my siblings hadn’t made me feel so awkward and unwanted during that off time. I also missed my grandmother desperately, but couldn’t afford to travel all the way home to see her just yet.

My second rotation was only two months long, so I only got three days of leave allocated. This time around I had signifiacntly less debt due to my laser focused payoff schedule, but but I was just as broke as I’d been the last time around. With this low liquidity situation, traveling home was still off the table, but it was made even more unrealistic by the short time period I would have to do it over.

My third rotation was no different, with four days allocated to leave this time around. It fell over my mother’s birthday season, which was quite exciting because although I had very low cash reserves, I was finally debt free and so I felt a lot less silly about cash-flowing a visit to see her. This time around I felt a lot better prepared, and it made me feel so much pride being able to go home and do what I’d seen other young newly employed relatives and friends do–buy groceries for the household that would last long after I’d left, help fix things that were broken, spoil my mother and show my appreciation for all the years of sacrifice she’d poured into my education. I couldn’t spend too much of course–and I didn’t–but I got bitten by a very dangerous bug that set me up for a very bad mindset…

The Difference Between Being Financially Savvy And Financially Secure

I’d like to preface the following with a little deeper context into my financial situation. I’ve always considered myself financially savvy, more so now that I am earning an income and “adulting” my way through difficult financial priorities. I was a “saver” as a kid and a relatively frugal university student, and I’ve always measured things by their value instead of their price. When I graduated, I knew that I wanted all that debt off my back ASAP. I applied my debt aversion and discipline to get out of debt within my first year of working–and beat that goal by a kilometer. I’ve been playing catch-up for my retirement savings since I reached Net Worth Zero and am trying to get an Emergency Fund built up again. I don’t buy things I can’t afford and I am conscious of cost-per-use of the things I can afford. I’m learning as much as I can about investing to ensure I deploy my tax free savings well and put my discretionary savings to good use to reach my long term goals. For all intents and purposes, I’m doing “well”.

However, I have low liquidity. Most of my savings are in my retirement account, which I can’t access until age 55 by current legislation. The rest of my “savings” went to paying for past expenses in the form of the debt I paid off. I get paid well for a new graduate, but I’m not rolling in the Mandelas and I’m not naive enough to believe that my personal and family financial road will be smooth going forward, so I’m aggressively building my Emergency Fund and a financial buffer back up before I can start considering my net salary after-expenses as “discretionary”. I had a scare early this month from HR that I wouldn’t be paid because they didn’t receive some of my HPCSA paperwork–a glitch on their side that was eventually resolved, but still left me with palpitations as I considered how I would need to shuffle things around so that I could get through a month of not being paid without cancelling every debit order including my RA! At this point in my financial journey, I’m technically still living paycheck to paycheck, but I have very high hopes (and plans!) to change that within the next year or so with the same discipline I applied to getting out of debt.

But since I’m not yet financially secure, I had to apply my financial savvy to the eventual fourth and final leave that was looming–a seven day period during which I would finally have enough time and money to visit my grandmother and the extended family members that supported me throughout my childhood and early twenties. It was difficult and required me to walk the talk in a way I hadn’t had to since I’d started earning a salary. Was I ready to navigate my homecoming without becoming completely broke in the process?

Okay, So What Was The Damage*

I started this journey home doing all the wrong things. My leave was approved rather late, so I had to book my tickets late. Then my younger sister let me know that she too desperately missed home and I felt so guilty about the fact that she wasn’t yet at the point where she too could afford to go home after being away as long as I had, that I offered to turn it into a bit of a girls’ trip. After the initial financial shock, I was pretty excited that she was coming along. As I’ve said, I tend to gravitate towards introversion and being a homebody, so beyond a couple of reunions I had planned, I didn’t really plan to do much more than chill at home with my grandmother spending quality time and helping her as much as I could. My sister joining the trip made for an interesting dynamic shift–she isn’t much younger than me but is the spontaneous extroverted one, so I knew I’d be doing much more than going home and chilling with her in for the ride. But this drove up my travel expenses quite significantly, and amounted to over a third of my ‘spending’ for this vacation. Of course, I still frugalised it as much as possible by booking with a budget airline at an ungodly early hour to get the cheapest return trip tickets for two adults with one checked bag each. (If I’d only known not to book the checked baggage since we both toted small sports’ bags instead! Next time…)

Spendthrift Subtotal: Late bookings, extra tickets for the sis, return trip = R3721

When the time to go home rolled around, a family member who had promised to drive down with me to Johannesburg (one of the two closest cities with airport facilities) completely bailed on me. At the last moment, with no alternate arrangements made and a very limited time between my leave beginning and my flight takeoff time, I opted to take a long distance taxi. I’ve done this a few times this year–I’m not snobbish about taxi’s and I actually enjoy the peacefulness of not having to think or talk or do to much while utilising them–but it’s usually a planned expense and not usually a stressful last minute choice that can easily be thwarted by missing the last taxi or a taxi-workers’ strike. Unfortunately, it was either the taxi or the long-distance bus  and since the latter fill up very slowly and drive quite slowly and thus can lead to significant delays I opted for the former. I also decided to simply take the taxi back on my return to avoid future frustration and disappointment, even though my family member offered to make up for their initial unreliableness. This was just because I’m actually fiercely independent and once you show me once that you’re unreliable, I’m pretty unlikely to count on you again. It’s an unsustainable personality trait, but there you have it.

Spendthrift Subtotal: Long-distance taxi both ways, and taxis to the taxis = R440

Once I arrived at my pitstop in Joburg where my ‘immediate’ family is currently staying, the slippery slope spending began. I got there in the late afternoon, with our flights scheduled for early the next morning, so I had some time to kill. I started killing it at Park Station where I got some Nandos out of sheer frustration at my travel situation. The Nandos sucked despite it being my usual order simply because food at train stations, bus terminals and airports generally sucks since they know you’re tired and hungry and not likely to walk out looking for alternate options. On the back of a really bad meal, I made my way to Bree station and headed home. I’d been given really bad directions by a taxi driver who misheard me, hopped on the wrong taxi and ended up in the wrong suburb! I ended up having to grab a second one which required quite a bit of walking–thankfully I’d packed light!–and then eventually made it home exhausted and a bit annoyed. When I got home all I wanted to do was eat, but there was no food.

Now I felt guilty all over again. As much as I try to balance helping my family with not becoming a financial crutch to them, going home always convinces me I should be doinng more. Although I don’t live in the city during my internship, I never go without a meal unless it’s because I’m at work. Thinking about my mother or my siblings struggling with basic living expenses makes me so nauseous I could cry. So obviously I bought everyone takeout for supper (because that was supposedly the sensible thing to do?) and then gave my mother some grocery money (I would have rather bought the groceries but I was so fatigued and the early flight prospect made the idea unbearable).

Spendthrift subtotal: Pitstop convenience and groceries = R1680

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I really should have just taken a colouring book to distract myself from my lack of padkos.

The early morning flight was a schlep to get through. We told my mother it was earlier than it actually was because she’s always running late for things and yet we still managed to only make it in time! We hadn’t eaten breakfast and, like all poorly prepared travelers, bought overpriced underflavoured airport food while waiting at our boarding gate. On the upside, we didn’t buy any aeroplane food! Still, R84  for muffins and coffee is so wasteful I still can’t believe it. After we landed, my sister went straight home to surprise her dad (who hadn’t been aware I was bringing her) and I met up with a friend at the airport who was also en route to the reunion we’d planned for months. It was a small reunion, just a bunch of friends getting together to catch up and make some music, but it was so refreshing. It went on all day, and although not everyone could stay throughout, the three of us remaining kept talking past sunset. At this point I offered to take everyone out for supper (don’t worry, I’d budgeted for this unlike most of the spendtriftyness thus far) and we made our way to the heart of town for an evening of food, fun and friendship. By the time they dropped me off back at my home in the township near midnight that evening (to my grandmother’s disdain) I was full in more ways than one. Totally worth it.

Spendthrift Subtotal: Treating Friends (including the airport food and a generous tip) = R584 

The next couple of days I spent with my grandmother while my sister did her social butterfly thing. Again, doing an inventory of the house, I felt shameful and guilty. Her microwave hadn’t been working for weeks, her kettle hadn’t worked in months, her TV was no longer transmitting her beloved soaps with any kind of clarity, her roof was still leaking quite a bit and there were a host of little expenses she was deferring. Of course, my grandmother being the badass woman she is, none of this phased her. She was just as content as she’d ever been, and she waved away my offers to help, expressing how none of that mattered as she was just happy to have her grandchildren home for the first time all year. This is one of the reasons this woman is my hero–she is the least materialistic woman I know and knows how to live a full, grateful life on next to nothing. She is creative and resourceful and adapts to whatever curveball life throws her way. Now, as much as I admire this and hope to emulate it, she’s not a twenty-five year old recent graduate. She’s taken care of everyone her whole life, and she deserves to be taken care of too. So my sister and I secretly devised a plot to slowly start replacing some things in the house that aren’t up to scratch anymore. We started simple–the usual grocery shopping megahaul that most people do when they go home, based on a list we extracted from her hesitant lips. Then we got sneaky. A new kettle magically on the spot of the old decrepit one–she cried and my heart broke for this beautiful woman who appreciates a little kettle more than most people appreciate designer clothes. Finding the contracters who initially botched her ceiling repair and then looking around for quotes for new ones since they were clearly crooks. Sneaking her schedule so I can order her a new microwave to be delivered around Christmas–which is hella ironic since I don’t really do Christmas and have never given a Christmas gift in my life! I don’t even think I’ve ever received one…

Spendthrift Subtotal: Making Granny’s Life Easier = R2000.43

The last leg of my vacation invloved some quality time with my sister and my Uncles. We visited the coast and swam a bunch, went to the markets and bought a bunch, planned (and failed) to go to the movies (the movie we wanted to see was only available as a VIP screening and my frugality reared its head and said, “Holiday or no holiday, you’re not spending R150 per person on a movie ticket. Keep it moving.”), were treated to my sister’s excellent culinary skills. My grandmother cried again during our final Sunday Brunch at our home when she looked around the table and told us how grateful she was that we were (mostly) all together as a family and how long it had been since it had been that way. I didn’t shed a single tear. I promise.

Spendthrift Subtotal: Making It Rain = R2250.11

I almost forgot: midway through my leave I got a call from the person I had swopped one of my Casualty shifts with saying he could no longer make it. I scrambled desperately to find a replacement, but my best friend was already going to be on call the next day and everyone else had just worked shifts. Eventually my friend got me the contact details of someone who would be willing, at such short notice, to “buy” the call from me. (This is a little bit of a medicine-specific thing in the sense that the terminology makes no financial sense and yet makes complete philosophical sense. If you are on call and can’t make it and can’t find someone to cover for you or swop with you, you can essentially “sell” your call to someone else. But instead of the seller getting the money and the buyer getting the product, it works the other way. In essense you pay someone else in order to offload your call, so in reality you are the one “buying”, but what you’re buying is your time back. But the tradition is still to call it “selling” because the other person is giving you time instead of money exchange for your shift and your money. It’s a mindbinder!)

Anyway, long story short, I had no option but to sell my call since whoever is officially on the roster is responsible for filling the shift and I couldn’t hold the other person who had cancelled on me accountable. I’d never sold or bought a call before so I didn’t know the going rate, but my friend negotiated it down to the lower end of the spectrum for me, for which I will owe her forever!

Spendthrift Subtotal: Buying Time, Selling Calls: R1500

Eventually, it was time to say goodbye. Again at an ungodly hour, my sister’s dad dropped us at the airport and kissed us goodbye. I compensated him for his petrol, not because he asked, but because we have a private joke between us from the days when I was a broke student and he would bring me food to campus…My sister and I got Wimpy breakfasts and some airport snacks (again, disappointing) in preparation for the inevitability that my mother would be late to fetch us on the other side  And late she was.

Spendthrift Subtotal: Pitstop Conveniences and ‘petrol’ = R650

We stopped off briefly at the house so I could see my brother before my mother dropped me off at the taxi rank for my return to work (already accounted for above). For the first time that week, I opened my 22seven app* and my jaw dropped to see how much I’d spent in a period of seven days–it was more than I usually spent in two months! But after the initial shock, I calmed down, made sure all my transactions were categorised correctly (many weren’t) and assessed the damage.

GRAND TOTAL: R12825.54

Wow. Wow. It was, on the surface, bad. I’d just gotten out of debt and then blown a significant portion of what little savings I’d had in seven days! So much for being financially savvy! Nothing about what had just occured seemed savvy at all…in fact there were so many areas of non-frugality and wastefulness that I should have turned in my FIRE/Frugality card right then and there.

But you know what…I wasn’t really worried. Why?

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A really horrible photo of a really great (previous) family holiday…Ayyee!!!

I Was Spending On What I Valued

Maybe the gross convenience food and the resturant meals weren’t things I valued. But in the grand scheme of things…these accounted for very little of my expenditure. Yes, I can plan better next time. I can make my arrangements better in advance, I can pack homemade meals for long-distance journeys or journey’s with possible delays. I can have backup plans for when I’m on duty and have arranged a replacement to cover for me so I don’t end up paying thousands to get a last minute replacement. I can veto all the entertainment line items that cost money and just embrace what the city has to offer.

However, I could also fall into the trap of crossing from optimisation to miserliness. I’m naturally frugal, but I try not to be cheap. Sure, I could have avoided staying with family and instead stayed with friends to avoid all the familial ‘obligations’. Sure, I could have sucked back all the guilt and told myself that I had to worry about myself and my own financial situation before feeling bad about theirs. Sure, I could have ignored the longing in my sister’s voice and told her I’d send her love to everyone back home and simply gone alone. But these things would have broken my heart and darkened my spirit. I value time with family and I’m proud of being able to break some financial tension (albeit temporarily) for them whenever I am around. Yes, I helped out plenty this year from afar, but I could never be truly content living frugally by choice while knowing that the people I love are struggling out of necessity. Can I solve all their problems? No. Should I? No, and that’s something I need to learn. But I don’t ever regret spending money on experiences with people I love, within reason–even when it costs more than the kinds of experiences I enjoy alone–and I don’t ever want to be so tightfisted that I let them suffer while knowing it would only inconvenience me to lighten the load. Do I want to derail my own savings goals? No. Did I? Yes, and that’s a lesson I had to learn.

Not All Savings Are Equal

Although I had a ballpark budget for this vacation, I learned that this was actually deceptively low. Although I admit that I overspent, a big part of that was thinking I had more money set aside than I really did. What do I mean?

I have a Savings Account that I started slowly trying to build savings up in ever since I paid off my debt. Any money not allocated for catching up on retirement contributions, I sent to this account. But the money was kind of amorphous sludge. It was my Emergency Fund money, it was my holiday savings money, it was my debit order buffer money, it was my tax free savings account accumulation money. It wasn’t a lot of money by any stretch, but it made me feel very comfortable. That, coupled with a recent paycheck, made me think that I could ball out of control at home.

And I did. Ball out of control that is. And, on the plus side, having savings made that possible without sinking me back into debt. I still had savings leftover, as well as money for the rest of my fixed expenses for the month. However…I realised on further introspection that I’d just put myself in a really tight financial position. Where before I could ride out an administrative error leading to one missed paycheck, now I was back to the place where there was no room for such mistakes. Where before I was well on my way to reaching my goal for my tax free savings account before the end of the tax year, now it would be a tight choice between that and keeping Emergency Fund money available (both for me and for potential family emergencies…yes, keep judging me, I know I’m a sucker.) Let’s not even mention the fact that my medical savings are currently abysmal–which is really quite stupid for someone with a hospital plan (who will therefore need to pay out of pocket for out-of-hospital expenses) and who is also a doctor and knows how expensive this healthcare stuff can be!

Not all Savings are equal. Saving money needs to be a conscious, goal directed thing so that you know that any one savings priority being realised (like a holiday) won’t derail you from reaching a separate savings goal (like an Emergency Fund target).

I’ve learned not only to plan better, but to keep my savings strictly demarcated. Apart from keeping long term savings in the market, an additional distinction needs to be made with short term savings in a (inflation-matching or beating) saving’s account. You don’t necessarily need multiple savings accounts**, but you do need to keep very clear mental tabs on what money is earmarked for which priorities so that you don’t find yourself double dipping to justify overspending. (Ahem…I mean I do. This is really just a reminder to myself). Even though I didn’t use credit to fund my holiday, I feel like I borrowed from myself by compromising my other spending goals and that is quite an eye-opener for me.

The Reason For The Season

Leave, vacation time, holidays…these are about free time to spend with family and friends (or even alone) doing the things I love at my own pace. They aren’t about mindless spending and making it rain. I know the people I love would love me regardless of how generous I am or am not financially, and would probably appreciate help in times of need more than random monetary gifts…although they may not yet know that 😉 . That’s why I’m so careful about not feeling like I have to constantly be buying stuff for them, while simultaneously mindfully setting aside funds for the day (and it will come) when someone I love is in a really bad situation and needs help. (PS: Don’t tell them I’m doing this! I don’t want to become someone’s idea of an Emergency fund!) I’m quietly saving up for my youngest sister’s future tertiary education as well, which is more important to me than buying her an iPhone. As long as I spend time with her, I doubt she’ll really feel the difference. But I’ll never hesitate to step in in the interim where I see a need, and that to me is one of the great joys of working towards financial flexibility.

In the meantime, I need to work on my padkos swag. Cause all that airport/bus terminal/taxi rank food? No beuno.

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Yes, we’re a cheesy, sentimental bunch. Stop judging.

 

*I track my spending using the 22seven app and that’s why I’ve been able to be so detailed in this post. I’ve written a bit about it here before. Because I track my spending, there is never a month where I’m not sure what happened to all my money and I can always see whether I have aligned my spending with my goals and values. I’d really recommend anyone trying to get a hold on their finances starts by tracking their spending. You can never really make a plan for where you want your money to go if you don’t already know where it’s currently leaking to. This blog receives no compensation for recommending this app.

**I decided to have separate accounts for separate saving’s goals because my memory is horrific. My short-term savings accounts are with Capitec Bank right now. You can open up to three additional savings accounts linked to your transactional account at no additional cost, all earning just below inflationary interest rates (5.65% interest to inflation’s >6%). If I were saving for medium term goals like a house deposit in a few years, I would use a fixed savings accounts or a money market account to combat inflation more aggressively. But for short term, liquid savings like an emergency fund, 5.65% is better than the 2-3% most banks offer.  Again, I don’t get any compensation for this recommendation.

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