Nothing Like Small Money Just a Small Mind

It’s 2017 and I decide to pay my barber and visit to get a haircut before returning to Stellenbosch for the second semester. My barber and I tend to chat about the economy, politics and sports but somewhere in the conversation, my barber always drops a life gem:

You know something Chief, there’s nothing like small money, only a small brain. There are so many barbers in town who earn as much as I do but they spend all their money on alcohol and small houses (also known as side chicks). When it’s time for school fees, they are broke. If you meet them right now, they are walking, they don’t drive. But me, I drive and I always ensure to pay my school fees on time. What is the difference between us? It’s not the money Baba, it’s the brain. There’s nothing like small money just a small mind.

As a young man this blew my mind because we always spoke about how the economy and politics were affecting people’s income. When people could not drive or send their children to school it always felt like it was the government’s fault but for once we were shining the spotlight on the individual. It doesn’t matter how much money we give to the wasteful individual, they are always going to say it’s not enough.

We see this all the time, someone wins the lottery and overnight they become a millionaire. This person tends to waste all their lottery winnings and ends up broke a few years later. In fact, there are many lottery winners that wish they had never won the lottery in the first place because they were left worse off due to debt or strained relationships.

Let’s consider the tech scene, there’s the tech startup Founder who sold their company and overnight became a millionaire. They either retire and spend the rest of their life pursuing passion projects, or become an Angel Investor, or start a new startup. They never complain about not having enough money ever again. But in both of these scenes we can find individuals who do the opposite, the anonymous lottery winner that wisely invests their winnings, or the tech startup Founder that blows all their millions. It’s not about the money, it’s about the individual at the centre of it all.

In my life

In 2023, I had to travel to the beautiful Morgan’s Bay in the Eastern Cape province of South Africa for a friend’s wedding. The wedding took place at the end of November and I believe my friend told me about it in January. So I had about 10 and half months to prepare for it but do you know what I did, I left it to the last minute. Something about the deadline rush gets me going, unfortunately the high of the deadline rush soon faded due to some realities:

• I had to buy an airticket. As they say, the best time to buy an air ticket is as close to the desired departure date as possible.
• I had to book accommodation. Good luck finding affordable accommodation in a small remote tourist trap during a major event like a wedding where most guests have booked all the affordable rooms weeks in advance.
• I had to organise transport. No problem, Uber. Wait, there’s no Uber in Morgan’s Bay? What?
• I need to deepen this hole. I felt the hole I had dug wasn’t big enough so I decided last minute to make my wedding adventure an all-round tour to visit old University friends. I decided to add stays in:
  • Johannesburg
  • Cape Town
  • Stellenbosch Because why not?

Flights

As the air tickets were at their highest possible price point I decided to get creative and mix airlines. I ended up using 3:

• Airlink
• Flysafair
• Fastjet

Because of the change from a wedding trip to an all-round tour I could no longer take advantage of buying tickets with returns. So the overall cost of the flights blew up. I also thought it would be a great idea to buy a departure ticket with Airlink so that I could leave home in the morning but use Fastjet on my way back because it’s generally the cheaper airline. But I was wrong, when I did the separate estimates it looked like I was going to save money but when I actually finally bought the 2 air tickets it ended up costing me an extra $50 (R922). I should have just bought both tickets with Airlink. Plus Airlink is always on time!

Since I did everything in a mad rush I didn’t even play around with sites like Cheapflights or involve my Travel agent to help with the deal hunt. I just booked directly on the airline’s companies and called it a day.

Accommodation

Johannesburg was easy. I booked a room at a Guest House that 2 of my friends were staying at that week.

Morgan’s Bay was tricky as it’s a small village. Thank goodness my friend (the groom) was very helpful. Unfortunately, all the affordable rooms were taken (of course). I also made my arrangements so late that everyone else had already paired up to share Airbnbs. I ended up booking a family beach house, imagine! 3 rooms to myself. You don’t want to know the per night cost.

Cape Town was easy. I found an affordable granny flat on Airbnb that cost only R100 ($5) more than the Johannesburg spot.

Stellenbosch the best. I stayed with a friend.

Transport

Johannesburg, Cape Town and Stellenbosch were straightforward. I could just use Uber which was reasonably priced for most trips.

Morgan’s Bay was a nightmare. Firstly, I thought it was a few minutes from East London. It was more like 1 hour 20 minutes. Uber was not an option and I didn’t have time to organise a shuttle or taxi so I decided to rent a car.

As I knew nothing about process I went with the well named, First Car Rental. I paid the rental fee online for a Suzuki Swift but was shocked when I got to the airport and realised that they would put a hold on my credit card for the liability fee, about R5000 ($271). The takeaway here folks, is doing things last minute means you do not have enough time to do any sort of basic research. First Car Rental actually froze the funds for past a week after I returned the car. This put my budget out of wack and left me abusing savings from my Old Mutual Unit Trust.

Once again if I had started planning this trip earlier I could have carpooled with other guests.

Budget explosion

This poor planning did not go unpunished. The budget for the trip blew up and I had to dig into savings to cover the deficit.

There’s nothing wrong with splashing cash to visit great friends or attend their weddings. The issue here was how the poor planning i.e. small brain caused the abuse of my savings. By buying my air tickets earlier and aligning my plans more with friends I could have saved a substantial amount. I mean I could have implemented a strictly couch-surfing trip and cut most my accommodation costs.

My friends

The conversation of money and it’s scarcity took centre stage while on a call with 4 best friends. We joked about needing to complete a Money Heist to set ourselves up for life (joked, this is not evidence). Some confessions from that call:

• Someone confessed that they could not fight the urge to buy sneakers whenever they had excess money left after paying bills.
• Someone confessed to spending way too much money on dates and how he had started making use of cheaper date ideas that still have the wow factor. I mean after all it’s about substance right, that’s what the ladies actually want (I think).
• Someone admitted to spending too much on the party life. We have all been there bro :/

Married men earn more than unmarried men

Yinon Cohen and Yitchak Haberfeld discuss and analyse previous research that states that married men, ceteris paribus, earn more than unmarried men.

Now is it because wives, for various reasons increase their husbands’ wages?

Or is it that high wage men are more likely to get married than low income men?

Or is there a third possibility is that unobserved characteristics, affecting both wages and marital status, are the reason for the observed cross-sectional association between marital status and wages?

It doesn’t matter I just want to know if getting married will get rid of the small money brain. Just asking for a friend.

Even marriage can’t save us from the allure of the high life

Couple has $520,000 in debt—and wife had no idea: ‘We’ve been living a life maybe we shouldn’t be living’, I guess the answer is NO:

Aldo and Cassandra earn a healthy joint income of $165,000 a year, plus Aldo said he’ll earn an additional $127,000 in commission this year. But the couple made a number of financial decisions that landed them in debt.

How can I do better?

I’m not a financial advisor so it’s going to take time to develop a system that works but some observations I have made have me thinking:

• Where’s your budget?
  • It’s easy to detect wastage when you are working from a budget.
  • Following a budget ensures you are always analysing your spending and continuously improving your financial habits. It’s better to fill a money hole in February than November.
  • There are apps for this! You do not even need to do this by yourself anymore. Some are free like 22seven.
• When traveling, plan early and plan well.
  • Traveling is the easiest way to annihilate your savings because of the lumpsums required to cover flights and accommodation.
  • If you can work together with your friends why not? Johannesburg was cheap because my friend negotiated a discount. Carpooling. Surfing your friends couches. Why not?
  • The point of most of my trips is experiencing a new environment with family and friends not staying at a beach house solo.
• If you know you cannot fight the sneakerhead calling or party life then lock your money up.
  • It takes a few days to process a withdrawal from my Old Mutual Unit Trust. This means I can never use this money for impulse buying. Plus I need to process the withdrawal via email or a phone-call not a mobile app. The problem with my ABSA saving products is that I can just use the mobile app to move the money around at anytime. Systems over discipline.
  • Leave for the club with less money. For cash-heavy economies like Zimbabwe this is super easy, just put less money in your wallet. And don’t you dare drive home to collect more cash when it’s finished! (I had an old school mate say that’s what he once did)
• A penny saved is a penny earned:
  • Do you really need another coffee mug? It’s too easy to buy unnecessary kitchenware or accessories. Some of these items just end up as junk in the house.
  • Whenever you buy too many vegetables and fruits and are forced to throw some out later, you are wasting money.
• Add it to the budget.
  • Living is not a punishment. God I believe wants us to enjoy our lives.
  • There’s nothing wrong with spending reasonable amounts of money on hobbies, friends and family. Just add these amounts to the budget and ensure to stick to the allocated amounts.
  • What I don’t want to see is unstructured spending that actually lacks utility. Why spend an extra $50 on a flight when you can get it for less? Why buy your sneakers now when you can wait for a few weeks and buy them during a promotion? Such spending is not to your benefit.