Why your salary finishes before payday

It was a regular production meeting to discuss one of our latest video projects, and then Tunde suggested we contribute some money for a Storyblocks subscription. My defences went up faster than a pouncing cheetah. 

“Alaye, my salary don finish o. (Dude, my salary is finished),” I responded with extra weight so my voice could carry the level of seriousness needed in such moments. “Help us run am na (Why not come to our aid?)” I deflected. 

“Ah, my own don finish before I collect am o (I already exhausted mine before payday),” Tunde replies. “I was just planning to borrow.” 

Living in today’s workspace, this brief exchange, and all its underlying mental games should feel familiar. But one consensus I drew from this was that people’s salaries finish even before that meaningful credit alert arrives. We call this scenario a pre-exhausted salary. 

You heard it here first. Note it down. 

In case this wasn’t obvious, this production meeting was just right after salary day. 

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What does pre-exhausted salary mean?

The phrase “pre-exhausted salary” is simply referring to a situation where your salary is already earmarked for expenses and purchases even before it comes. At best, this could be recurring expenses like food, electricity, water, and investment deposits. At its worst, this could mean you’ve already borrowed money to meet urgent needs with hopes of repaying with the next salary. 

If this article is making you feel like I’m wiping you with a USB cable (For the English purists, If this is striking a chord with you), then you shouldn’t feel bad. Several other people, including this writer, are all in a similar situation. That  I found when researching this article.

Painfully, one of the worst things I found is an article blaming the person for not properly managing their finances. That’s pretty much what you’ll get when you tell someone who outwardly seems well put together. 

However, research shows that 81% of people exhaust their salary before the end of the month, usually due to forces beyond their control. This is simply telling us that such scenarios are not exclusive to those who live lavish and spend wantonly. 

If most people exhaust their salaries before the month's end, there are several options available. They could ask their family or friends for assistance, do extra side hustles (More on this later), and, most popularly, borrow money from friends, their company, or a lending app. 

If like me, you fall in this last bracket, then it’s safe to state that you’re already spending your next salary before it even comes. When you remove your debt engagements and your monthly bills, you find yourself starting the new month the same way you ended it. In need or urgent 2k (funds). 

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Why is salary nearly never enough

Beyond our own whims, there are several factors that contribute to the constant shrinking of our salaries. Trust me, there are several angles that can be explored here, but I’ll limit myself to just a few that’s been backed by empirical research. 

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Inflation

Regardless of your location, I’ll like you to take the equivalent of $50 to the mall and drop items in your trolley. Can you still drop in as many items as you could two years ago? I hardly think so. For my beloved people in Africa, I implore you to try it on a weekly basis. 

Why? The average global inflation rate stands at 3%, but the inflation rate among Africa's economic big four –Kenya, Nigeria, South Africa, and Egypt  –  averages 10.3%. This is quite flattering considering some countries like Sudan experience an inflation rate of 260%.

Inflation has ripple effects throughout the economy, and it usually starts with a price increase in essential goods and services, or the downright scarcity of it, which, in itself, is due to a bunch of other reasons I’ll leave for smarter people. A hike in diesel, for instance, can increase the cost of goods. 

The fall of your currency to the dollar deserves its own topic, but it also contributes

This simply points to the fact that as long as your salary doesn’t increase with the rising costs of goods and services, it would likely not be enough to cater for all your growing needs.

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Tough work environment 

Let’s face it, the majority of employers are not nice when it comes to salaries. Some companies actually keep you working for years without a raise or a promotion and there’s usually little you can do about that. 

When companies do promote or give raises, they usually do so based on performance and, sometimes, length of stay in the company. But these two scenarios are probably not the fairest. 

Some bosses give priority to some job roles that they deem important and pretty much neglect others. In other cases, office promotion could come right down to popularity contests.  

Ideally, employers should also consider inflation rates when reviewing salaries, as that might be the only way to maintain a certain living standard. Benefits such as health insurance can also go a long way to help this. 

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Acts of God

These are scenarios you never see coming. It could be an illness (especially if your workplace doesn’t provide insurance), it could be the loss of a loved one (which is quite as expensive as it is emotionally draining), or it could be war or a once in century event like a global pandemic. 

Other less sad events could include phone or laptop thefts, or car servicing. 

Based on several metrics, these unexpected circumstances can put a huge dent in your finances, and sometimes force you into debt. When huge debts come, your salaries begin to develop wings and fly into the night sky. 

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Or it could be closer to home

I’m sorry, I said I wouldn’t blame you, but we can’t shy away from the fact that looking into the mirror helps us navigate the problem better, We all have that sweet tooth. We all have that shiny new toy we want to play with. Most importantly, we all have responsibilities chasing us from all corners. 

We’ll discuss something about navigating black tax in the near future, but one of the most important reasons money develops wings and fly, is that we do not spend prudently, and even when we think we do, we rarely keep track. 

Sometimes, when you check your balance and you think your bank is playing a fast one on you, just get a calculator and you’d see everything adds up. It’s all there. 

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The net effect

Debt: At this point, you don’t need any magician to tell you that you’ll be neck deep in debt by the time each salary comes. So much so that even a holiday bonus would not make a dent. You’d find yourself having to live from hand to mouth, and always knocking on the door of friends and family for assistance. 

No one wants that. 

But because it can happen, depression could set in, and could lead to worse health complications in the future.