It doesn’t add up

Secretario de Hacienda (Finance Minister) Ernesto Cordero must have missed a few classes in personal finance. Last week, he was quoted as saying

[W]ith an income of 6,000 pesos a month there are Mexican families that have a credit for their own house, that have a credit for a car that have the time to send their children to a private school and are paying the tuition.

Either Cordero is clueless, or it was a joke:  one that didn’t go over very well with finance student Cristina Michel García, who sent the following letter to La Jornada de Jalisco (my translation)

In one of my classes last semester, the professor assigned us to draw up an account of our personal monthly expenditures: rent, transport, food, entertainment, clothing… everything. For me, it wasn’t at all difficult, as each month my parents sacrifice 12,000 pesos for my monthly expenses, every one of which I spend over the month.

5,000 pesos go directly for my tuition at TEC (and I might mention that I have a scholarship paying 60 percent of that), 3,500 pesos for rent (including all services): approximately 500 pesos for transport, leaving me 3000 for food, school supplies and copying, an occasional movie and a few gifts for special occasions.

In our next class, we discussed what we spent. I kept quiet when I listened to classmates talk about needing 25 to 35,000 pesos per month to “live”, and one classmate who said he needed 50.000.

Cordero said that “with an income of 6,000 pesos per month, a Mexican family can get the credit to buy a house, a car and pay their children’s tuition at prívate schools,” while I am barely getting by on 12,000 just for myself.

I am not a party-girl, nor do I go to bars. I do not dress in the latest fashions, nor buy designer sunglasses and handbags. I only spend what I need. Some of my friends say I’m cheap, but I just say I’m money-conscious. My justification for that is that I’m studying financial administration, but in reality, there is much more than that to consider.

I considered taking a job, but my parents have told me “study now, you have the rest of your life to work.” But, having realized I need 12,000 pesos a month just to get by, I began researching my potential earnings upon graduation. To my surprise, the well-paying jobs require extensive experience. For recent graduates in my field, the average income is around 7,000 pesos per month.

And so I’m thinking, “O.K., with 7,000 pesos, I could survive for a year, not having to pay tuition,” but basically I would be in the same financial condition I am in now with a 12,000 peso a month income.

My parents have expended an enormous effort into helping with my education, in the hope that I will be self-sufficient… I hope I share.

Some of my University classmates have the good fortune to work for Daddy’s company. Or Mommy has an important friend who can make “accommodations” for a higher-paying position.  But “mortals” like myself and my friends — from middle class families without contacts —are more likely to find our employment in sales or telemarketing where we will be left wondering what the point was to studying financial administration, spending sleepless nights studying and depending on parents wiling to sacrifice for our education.

In order to achieve my goals, I am expected to compete for a seven thousand peso a month job and refinance my debt with the University for another three years, while hoping to gain the experience that will get me the salary I need to pay both my college expenses and the refinanced debt.

Having a degree does not guarantee finding a good job, at least not in Mexico. But six thousand pesos to cover housing, a car, and tuition? Hahaha! Very funny, Cordero.

Secretario Cordero might — if he really believes his own nonsense — try living on 6,000 pesos a month.  Better yet, maybe the rest of his salary could go to hire people like Ms. García, who seem to know a thing or two about the real world of Mexican finance.