Tag: money

Who’s really broke and who’s not?

I have been on the lower end of the income scale for considerable periods of my life. I’ve been jobless, cashless, food-less and hopeless. I learned how to value money, which is totally different from being cheap. I shared a doma (fruit) with a friend as dinner, I am an expert at recycling old food and I am very good at making Al-Hamam Tar – “the pigeon flew” – soup, which is basically boiling onions, salt and lemon. It looks, smells and supposedly tastes as if there was a pigeon in the soup.

I discovered something new: broke-ness is in the eye of the beholder. I developed some sort of desensitisation to broke-ness. I have lowered my living expenses and standards, I compare myself with people with worse standards. I look at genuinely poor people, stop for five seconds, scratch my head and then think, “I’m rich, Alhamdulillah” (Praise to God).

Broke-ness is relative. I have a friend from one of the Gulf countries who declares bankruptcy when he reaches a couple of thousands of pounds in his bank account. I abuse him for that. I usually consider myself still rich if I have more than 50 pounds in my pocket. So basically this out-of-money mental state depends on the person’s original financial status. A guy with a 10 000 pound-salary may think he is broke if he only has 100 pounds left, while another might consider himself quite rich if he has 10 pounds in his pocket by the end of the day.

(Graphic: sxc.hu)

So what is “broke”? How can we define someone as being financially broke? We can say broke is a state of not being rich, but this is just like defining black as not being white. And on the other hand, how rich is rich?

Broke-ness in my humble opinion is definitely not the lack of cash. It is rather a state of mind. It is a terrible fake feeling, but if the person thinks too much about it, he will eventually believe it. An individual may consider himself broke in the following situations:

1. If the person was in a better financial status previously. For example, last week he could have afforded to eat in Real Burger, while this week he can only afford to eat at A’awad Torash (a local restaurant). Such people should learn that they were not born kings – if you can’t afford a smart phone, buy an Abu Lamba (“the one with the bulb”. This refers to the Nokia 100 handset, which has a built-in flashlight.)

2. When a person compares himself to richer people around him. They have “better”, or I have “less”. This mostly leads to jealousy. These people should learn to appreciate what they have.

3. Jobless people. Some people are actually jobless, but some are just proud. This is quite common among educated people. They feel shame in working in different, less financially rewarding fields. These people have no excuses whatsoever. If you want money, go and get it. I am a dentist; other than fixing bad teeth, I worked many jobs. I was a shopkeeper, I taught English, I coached basketball and I once sold cookies in public. I feel more proud and less broke than the proud non-working people.

What I’m saying is, being broke is relative rather than true. Unless you can’t afford to put food on your table, get over it, you’re not broke.

Yasir Elkhider for 500 Words Magazine, an independent online magazine about Sudan. It is an amalgamation of various thoughts and opinions on Sudanese society, culture and life, and provides a platform for discussion among Sudanese youth. Connect with 500 Words Magazine on Twitter and Facebook.

12 years ago

Recovering from my own financial crisis

In 2007, I landed my first ever job as an accounts clerk at a printing company. I hated it. It paid the minimum wage and cost me more than I earned just to travel to and from work, but I was proud of the fact that I was employed.

After I got my first payslip, my ever-cautious dad began to badger me: “Ntoks, you should bring your salary slip and bank statement so we can go through it on a Saturday afternoon. I’ll help you manage your finances.”

Hell no! I kept my books away from him because they were badly kept ones which would reveal some questionable wastage – a McDonald’s treat for my friends, an extravagant dinner date, the occasional pair of shoes, and, uhm, splurges on a certain illegal green substance. (You’d be amazed at how active dealers’ bank accounts are.)

A few months later, African Bank offered me R5 000 of credit to be paid back over three years. At R150 a month, the installments were invitingly low. At the time I earned a salary of R3 000 so I was ecstatic about being approved for credit. I felt like a real adult but ironically I ignored the common sense that supposedly comes with growing up.

There I was in downtown Jo’burg in Gandhi Square, licking a R2.50 ice cream, when an over-eager credit sales person from the bank approached me, like a dealer on Oxford Road, and told me he could change my life. I was sold. I took the loan even though I did not need it – I was merely R200 short to top up my bus tag, and all I had to do to sort this out was call my mom.

I paid off my first debt in less than the stipulated three years, before I turned 21. By this time, in 2008, South African banks were over-extending themselves and loaning to people who earned even less than I did. Newspapers ran reports of how bad debts were eroding the South African economy, and the impact of the global economic downturn on our country.

Our economy was sucker punched into a recession, but our banks managed to remain resilient. This made me optimistic. And like a junkie, I went back to credit after being clean for only a couple of months, confident that I could control myself.

But the global financial crisis of 2007-2008, considered one of the worst ones since the Great Depression by economists, had different plans for me. Prices suddenly skyrocketed and I couldn’t afford what I used to. To make matters worse, in 2008 I made the bad decision to move out of home a month before securing an assistant business producer job at CNBC Africa. By then I was broke and pregnant. African Bank came to my rescue, with more than they offered me the last time! I paid rent, bought food, saved for transport, bought work outfits and booked a couple of doctors’ appointments. I even sent some of this money to my grandmother.

This is where the blur and the binge began. First it was one loan, then two then three then four, all from one bank and all with different repayment amounts. I signed up with Capitec Bank who introduced itself as my savior, but I ended up owning them more than I did African Bank. FNB, too, “helped” with the overdraft facility on my cheque card but it took just a few months for them to cut me off.

I survived on the overdraft facility for months – an extra R5 000 here, another R3 000 there – kidding myself that this was the solution. (Flickr/Images Money)

It finally dawned on me that I was deep in debt. It took a while for the depression to kick in. I am a business writer by profession; I report on economic issues and tell the world about bad business decisions and deals. I should’ve been smarter, and taken my own advice. At times, paranoia got the better of me. I was worried my financial situation would impact on my professional career and business reporters would gang up on me to say: “Ntokozo, we don’t need you to comment on this, you have bad credit, girl. Goodbye.”

I lay awake at night, eating chocolate chip cookies in bed and watching bad American reality TV shows like Money Chase, where people in huge financial trouble do crazy things to win money to pay off their debts.

This was the worst experience of my life, but it did teach me one valuable lesson: cash is indeed king. The banks usually neglect you once you become a liability to them; the friendly salesperson who helped sign you up for a loan quickly becomes your worst nightmare.

I am now slowly trying to control and erase my debt. I owe a lot of money to one bank, but rather one than three. I’m even being offered discounts on payments now (but I’ve learned this could be just another gimmick.)

My advice to other South Africans being tempted to spend money they don’t have is, simply: don’t. Save your money instead. I would never have said this five years ago, but putting away R100 instead of buying a pizza has made a big difference in my life.

Ntokozo Khumalo is a business writer, reporter, and producer. She is also the director of Hot Content Media. Connect with her on Twitter.

12 years ago

I’m getting married, please send money

It’s eight in the morning when I enter the office gate just after dropping out of the minibus taxis – famously known as daladala – and my cellphone rings. I take it out of my jeans pocket only to find that it is one of my college mates, an old friend who I have not seen for months.

“Hey Erick, how are you?” he asks by way of greeting. “You are not seen – I just find your name in the papers.”

I give him an excuse about a busy life at the newspaper in Dar es Salaam that doesn’t seem to allow me to meet regularly with old friends, but I tell him that I’m doing fine. After some small talk the real reason for his call comes out.

“My friend, I am getting married in the next two months and I really need your support,” he says. I can’t possibly reject his request outright so out comes my standard response: “Hey, congratulations, man, count me in.”

But, really, all I can think of is the small table in my bedroom where, just next to my computer, there are about five cards from close and not-so-close friends with the same request – an appeal for a contribution to a wedding.

The texts in the cards are almost the same. “The family of so-and-so is happy to inform you that their beloved son/daughter is getting married in October. We have a pleasure to ask you for your participation by contributing some money and moral support. Please give the money to the one who gave you this card or contact the phone numbers below.”

This wedding “contribution” has become part of Tanzanian culture.

Weddings are a big thing – not just a family function as in some other countries but, rather, a community event. Relatives, friends, neighbours and colleagues are invited to be part of it, but not just by attending but also by giving generous financial assistance.

Like most things, it starts at the family level, where all the traditional processes such as dowry payments take place. It is the family that sets the wedding date – and the budget.

After that’s decided the family helps to make up special “contribution cards” for the bride and groom, which are delivered to relatives and friends of the family. Contributors are given at least three months to make sure they have ample time to get it together.

But the collection starts as soon as the cards go out. Every weekend, relatives and close friends who form the wedding committee meet to see how much they have collected and how the preparations are proceeding – what is going on with the wedding hall, the decorator and the caterer, and how much else they can pack into the budget.

As the wedding day gets closer, the committee reminds contributors of their promises by sending SMSes, or visiting them in their offices and homes, to make sure they cough up.

“As a close dear friend and relative, you are reminded to submit your contribution to fulfil the preparation of my wedding. God bless you!” is the sort of text message that arrives on my phone almost every weekend.

But it’s not just for the wedding that contributions are expected. For the bride, there is also the kitchen party, organised by the bride’s mother and aunts, and it is women only affair. Of course, guests do not get into the kitchen party for free either. They must contribute money for drinks and snacks, and arrive with a kitchen gift to help stock the bride and groom’s new home.

A week after the kitchen party the bride’s family also organises a prewedding party, famously known as a send-off party, which includes all invited guests.

At this party guests eat, drink and dance and at the end of it everyone , even those who attended the kitchen party, congratulates the bride to be – and bestows yet another gift on the happy couple.

The big event is normally hosted by the groom’s family. After the religious ceremony, either in church or in a mosque, the party moves to a hall for the reception. More food, drinks and dancing, with, of course, a present for the newly married couple.

Guys like me with many young friends shell out more than R400 every month for weddings or sendoff parties. And, as men, we’re lucky – we don’t have to include the kitchen party in our budget.

I am still recovering from what I gave out last month when two close friends got married.

I had to contribute about Tsh50 000 (about R220) to Rose’s send-off party and the same amount to Alex’s wedding. But, it didn’t end there. Alex was my roommate at university and he asked me to be one of the groomsmen so I had to buy a new suit, white shirt, a pair of shoes and a tie.

I sank about another Tsh300 000 (R1 300) – the equivalent of a secondary school teacher’s monthly salary – on just one wedding. I suppose we can blame Julius Nyerere’s “communalism” theories.

In Tanzania, the “contribution” is more about sharing than anything else. Even if the family is wealthy people still contribute in a show of “sharing”. And even though people complain about it they still have to contribute. It’s a kind of “if you do me, I do you” game. When my time comes, I’ll approach all those who I contributed to – a sort of money back guarantee.

But even if it’s all in the spirit of sharing don’t even think of going to anyone’s wedding if you didn’t contribute. Wedding invitations per se are sent out only a few days before the wedding and whether you make the guest list always comes down to how much you contributed. But never mind about how much you gave, it all goes towards making the couple’s big day.

Erick Mchome was the Mail & Guardian’s David Astor fellow in 2011. This post was first published in the M&G newspaper.