Economics and Expenses

Our month in Mamelodi would not have been the same had we not set a strict budget for ourselves, a budget representative of what many in the same context live by. In line with this reasoning we decided to try and live off R100 per day or roughly R3000 for the month (based on the median black individual income of R2167pm as per the 2010 stats SA data[1] and extrapolated to an estimated household median income). Due to family and friend commitments, our month was not quite the full month as we moved in on the 4th and left on the 30th of August so to be fair we revised our actual budget to R2700 for the month. Our expenses came in as follows:

Costs breakdown

 

 

 

 

 

 

 

So based on our R100 daily target we actually spent R94.48 per day.

Or visually as:

Costs breakdown2

 

 

 

 

 

 

 

This picture shows us a glaring problem. 47% of our disposable income was spent on transport. And transport costs have gone up enormously over the past few years.

At the end of last year taxi fares were R12 for a trip; they are now R14 and will go up to R16 in the next few weeks. This 33% increase where transport constitutes 47% of your budget translates into a roughly 16% annual inflation number if everything else stays unchanged (which it hasn’t): way above the 2012 CPI of 5.75% and significantly above the raise most people give their workers on an annual basis.

In light of the extremely heavy weight of transport in our budget mix, we have decided to strip out transport costs from Leah’s wage from now on to more effectively align her efforts to her pay rather than her being disadvantaged by transport costs.

We struggled to get by on the median income and yet the definition of a median income is that half the people in that context earn less. You will also notice that our expenditure list excludes items such as furniture and fixture costs, school fees, school uniforms, cell phone minutes, travel to and from funerals, sending money home to family, supporting a large extended family etc. These are all real costs faced by the workers in a community.

Had we needed to cover any of these expenses, it would have pushed us over budget. Small wonder then that micro lending is a thriving township business (often not at all sustainable resulting in debt traps) and that stokvels (group saving schemes that are actually quite a good idea if all the members diligently contribute) are often used to cover some of these incidental costs.

In 1994 South Africans were all granted democratic freedom and equality but now, 19 years later economic freedom is still a distant wish/goal for many. Although Julian and I disagree with Julius Malema’s policies he points out many real problems faced by the people in this country that have yet to be adequately resolved. Economic freedom is something that is still a pressing problem in this country that should concern all of us. If not, it will increasingly become the playground of populist leaders.


[1] http://www.statssa.gov.za/publications/P02112/P021122010.pdf

12 comments

  1. Susan Armstrong says:

    I totally agree as a single parent ..having a getting by attitude rather than how can I grow the little is exactly what is going to put this country in a position of the gap of the rich get richer and poor more poorer …and that will be a disaster. ..can we at least work on education of money and use of it and how to small money into big money. As a black woman I don’t want to live my life just surviving every month. .I want to thrive

  2. Tembekile says:

    I am really happy for you guys as you now have a true expirience of how others live their lives. Yes this will not change the way they make their daily living but today atleast someone from a comfortable home knows how others suffer.

  3. Tracey says:

    Very thought provoking that transport is almost 50% of a person’s monthly spend. You also didn’t need to buy any new clothes in the month, so that would be another expense. And then there is the obvious lack of putting any money away for later – not relevant to you specifically – but saving in S.A. is a huge issue… people have no money left to save.

  4. Asanda says:

    Tracey, the fact that there is no money to save affects generations in the end. Not an easy life at all, but I salute those who try to make the most of the little that they have. Sad in every way.

  5. Nyiko says:

    Active citizenry always highlight and attempt to address the inequalities that existing within a community. We individually have a part to play and I am sure through this and other actions you may take we will see change. I believe this will allow many other people to ACT..

  6. David Buchanan says:

    Further to my comments regarding public transport on your ‘Train Travesties – Shame Abantu’ article…
    http://mamelodiforamonth.co.za/2013/08/29/train-travesties-shame-abantu/

    It is clear that a massive proportion of your monthly budget was dedicated to transport, and unreliable transport at that. The problem with your admittedly honest breakdown of the data is that it perhaps gives a false impression as to the affordability of public transport in South Africa.

    Transport in South Africa still remains reasonably priced when compared to developed Western nations.

    As of 2011 “…the average UK household spends only 1.1% of its budget on rail, bus and coach fares – much the same as ten years ago…”. Even if you were to include all forms of transport, including buying cars and petrol costs that figure only increases to 13.4%. A substantial increase but way lower than the 47% on your budget.
    http://fullfact.org/factchecks/is_the_rising_cost_of_public_transport_leaving_us_out_of_pocket-28841

    The issue is rather with the suppressed average monthly income in South Africa which clearly cannot support even moderately priced public transport.

    As with most things it is education that will address these issues, more likely than not over several generations. As the average level of formal education increases we can hope to see corresponding wage increases.

    Equally as the public transport infrastructure in South Africa increases, beds down and matures you may see other franchises enter the market and facilitate pricing competition.

  7. Rebecca says:

    I wonder what your next steps might be. Since so many voices of Black South Africans have been silenced, perhaps using your privilege and power to make sure these voices get heard, and their authentic experiences listened to. If you have not read the American book Black Like Me, and the events surrounding it, I highly recommend it.

  8. kudzai zhanje says:

    this was really a commendable effort to try understand what other South Africans are going through. I guess if our leaders would put themselves in the shoes of the people who put them in power, they would be more compelled to try solve some of these issues.

  9. […] Fortunately, we have the experience of the Hewitts to draw on (the family mentioned above that moved to the Mamelodi township for a month). Here’s a link to their blog post on expenses. […]

  10. Andreas says:

    When using 40% of your budget for transport, what kind of transport was that? Did you take taxis at all? Or just the bus?

  11. […] 2013 a well-to-do white family, Julian and Ena Hewitt made a conscious decision to move to a black township (Mamelodi) in Pretoria to experience what life […]

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