Big Financial Setback

Ten Dollar bill torn in half fixed with a bandaid.

Financial Setback

Friday morning my wife was in tears. I just got a text from her stating that she got her paycheck and it’s significantly lower than it was last month. This came as a huge surprise to me and her but we had a feeling that it could happen.

Not sure how health insurance works every where else in the world, but here we pay a monthly fee based on which package you select. You pay half and your employer pays the other half. Not all companies have this benefit and this benefit is not compulsory for employee for those companies that do offer it.

Last month my wife and I compared our medical aids (health insurance) and concluded that it would be more cost effective if I were to cancel my medical aid with my company and then she adds me to her medical aid as a dependent. We scrutinized her paycheck and saw that even if I were to be added to her medical aid, her company will cover that and then she would still get the same salary after taxes and deductions.

This was not the case though. She inspected her paycheck once again to find her mistake. Her basic salary decreased because I was added to her medical aid. I save $500 per month but she loses $700 per month. That would’ve been fine if it ended there, but it didn’t.

Mrs Lakendary’s employer also made a mistake in her taxation calculation. Again, I’m not sure how the rest of world pay taxes, but here we pay something called Pay As You Earn (PAYE) which is a monthly tax payment instead of one big lump sum payment each year. Then at the end of the tax year, you reconcile what you’ve actually paid over the tax year and deduct what you were supposed to pay and pay or receive back the difference.

Now that her taxation was wrong, she’s been paying too little tax for the past 11 months, so not only is she earning a lot less each month from now on, she might also have to make a huge tax payment come the end of the tax year (29 February 2016).

We had plans to visit my parents at the coast for a week and maybe get a new car a couple of months down the line. It still looks like we might be going to the coast even with that financial setback, but the car is definitely out of the question until one or both of us gets a significant raise.

Well this weekend we decided to spoil ourselves by buying cheap decorative things for our place because we’ve been living there for close to 3 months but it still doesn’t feel like home. It did help lift our spirits. This only made us stronger. Next time we will be fully prepared for something like this.

Thanks for reading. Until next time.

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4 comments

  1. Sometimes you have to splurge on the little joys in life to pick you up and get you going on the right track again! And making a house feel like home is always a good investment IMO as long as it’s done moderately and over time 🙂 There really is no place like home!

    1. Yeah I agree. We really want to get a big wedding photo printed on a canvas for our living room but that’s going to cost an arm and a leg. The cheap little things did wonders to lighten the mood.

  2. Its too bad what happened to your take home pay and medical expenses. Sometimes things don’t go as planned and its hard to cope, but the fact that you are both looking at your expenses is a good indication that you are monitoring your money, which many people don’t due. Hang in there, you guys are doing good.

    1. Thank you so much. Yeah, we hanging on in there. I spoke to my wife about the tax thing yesterday and she said it’s not as bad as she initially thought. Her employer deducted extra from her to avoid paying the Receiver of Revenue (the IRS for all my American followers). So her future tax deductions won’t be as much as her last deduction but also not as little as her previous deductions. So things aren’t that bad after all. Also, she is almost working for her current employer for a year. She’s going to ask for a raise. Hopefully she gets it. Fingers crossed.

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