Why You're Not Getting Paid- In Jamaica
Updated: Aug 28, 2019
Quick Question! If your income is $1,125.00 JMD per hour. What do you take home at the end of each month? You’ve probably already grabbed your calculator to see what that amount would be. I asked this question to a group of 15 people, and most agreed that it would be $180,000.00.
Why is it that even when most people triple their income, they end up still never having enough money at the end of each pay cycle (whether it be monthly, fortnightly, weekly or even daily)? I’ve found that the only way to end this God forsaken hand-to-mouth trend is by paying yourself. Yes it is that simple - but not easy.
Types of Income
Let’s break it down. If your answer to the little math question above was $180,000.00 JMD you are incorrect. You see, before you even get your pay, it is taxed. So “they” (whoever they are) came up with terms such as Gross Income (what is written on paper as your earnings) and Net Income (what your employer releases into your account). While most of us are lead to believe that our Net income is our money, that is not so. Take a moment to think of all the expenses that demand a share of this net income, sometimes long before it even gets to your bank account.
Here's an example
For the purpose of this example, we will use a fictional character, “Aldane”. Now, Aldane earns $180,000 JMD per month. Of this $180,000.00 JMD, 25% is deducted as PAYE, given that he has passed the threshold of $150,000 JMD in earnings. He then pays 2% for National Housing Trust (NHT) contribution, another 2% for Education tax, then 2.5% for National Insurance Scheme (NIS). This means that at least 31.5% ($56,700 JMD) of his earnings is already not his. This means his employer releases $123,300.00 JMD to his bank account. His transportation to and from work is a thousand dollars daily so he sets aside $20,000 JMD so he can get to and from work daily because he’s a responsible young man. this leaves $103,300 JMD. What is left of his social life (His coworkers) like to hang out on a Friday nights after work to destress. He finds comfort in this and they usually have some strong drinks at a bar. These outings set him back by $12,000 JMD for the month.
The dreaded bills
Now let’s look at the bills he’s always complaining about. He resides in a beautiful Studio for which he pays rent ($30,000) JMD, and utility bills such as light ($6,000 JMD) and water ($2,000 JMD). He cannot live without the internet, especially since the internet service provider had a deal which included Internet, phone and TV with all his favorite channels at “just” $8,000 JMD per month that he just could not refuse. This means $134,700 JMD is already not his. He loves his mother dearly so he sends her $25,000 JMD every month. This means that $159,700 JMD is not his. This leaves him with $20,300 JMD for food, grooming and other miscellaneous expenses which usually leaves him asking his friend to sponsor his lunch till next month. What Aldane has is “more month at the end of his money”. What most people who recognize that they are in such a situation end up doing is cut back on some of the expenses (wherever possible) and try to save a little after covering the expenses. What I propose is that you not only pay yourself, but pay yourself first. By religiously putting aside no less than 10% of your income each month before doing anything else. You will see a big boost in your overall confidence and an increase in the health of your bank account. Looking at it, you might think this is not possible given the expenses. Try it for one month and I guarantee you will hardly notice a difference in your lifestyle.
Feel free to reach out for a more detailed explanation of how this can work and assistance with planning your financial schedule.
"People who succeed have momentum. The more they succeed, the more they want to succeed, and the more they find a way to succeed. Similarly, when someone is failing, the tendency is to get on a downward spiral that can even become a self-fulfilling prophecy." - Tony Robbins