Red Alert

As any Trekkie will surely be aware, the term ‘red alert‘ is synonymous with critical or imminent danger. Yellow (amber) alert is a slightly more mellow affair – if you’ve ever seen a traffic light then you get the drift. In what is presumably a sort of frequency illusion, I’ve been seeing alerts everywhere recently.

Pay All You Earn

I can’t say that I hadn’t fair warning. HMRC had let me know that I was undertaxed in 19/20 and would be footing the bill for it this year. What I hadn’t expected was said deficit to be taken from me in one fell swoop – a more than doubling in PAYE last month. This cut my take-home pay (and thus savings rate for the month) by nearly 40%.

The sudden drop was an unpleasant surprise, and my usual financial tranquility was certainly piqued. It wasn’t quite full red alert aboard the Starship MedFI; essential spending was wholly unaffected. Although discretionary spending could have been maintained at previous levels, I found myself engaging in a sort of amber alert. The generally well-oiled automaton of financial goings-on was subjected to a bit more QC than usual. This was mostly as a protective measure should I fall foul of more HMRC recompense requirements, or any other financial misfortune, in the near future.

Negativity

The murmuring surrounding negative interest rates has upped in decibel level this week as the BoE laid down the gauntlet for UK banks: you must be prepared for negative rates. Others have written fairly succinctly on the topic already and I won’t re-hash their summaries here.

All-in the arrival of negative interest rates wouldn’t have devastating effects on the masterplan. Operating in a near-cashless way, in part thanks to my Emergency Fund 2.0, things wouldn’t look altogether that different if negative rates were implemented. Their introduction would, however, be another gentle rocking of the ship, another ripple in the pond, an added perturbation. Amber alert indeed.

Tiers beget tears?

The fabric of our everyday lives is inextricably linked to the ebb and flow of the Covid pandemic. The Government’s new trifecta of tiers has only put the Liverpudlians on Covid red alert so far, with a smattering of amber tier two zones too. One model predicts that the majority of the UK will be Covid hotspots in a fortnight’s time; most data is trending in the wrong direction. Though regionalisation, via the tier system, in theory absolves the government from having to introduce a total nationwide red-alert (lockdown), I still agree with my past self’s opinion that it is an inevitability.

In-hospital patient flow is subject to a similar arrangement. Though ‘green’ patients are in theory proven Covid-free, and red the opposite, some have slipped through the net. Unintentional exposure to Covid-positive patients, and an un-healthy dose of coryza, has kept nearly 20% of staff in my department from working this week. Presumably the frequency of coughs, colds and Covid will continue to increase in the coming months. The workforce being laid so low as the clinical pressures mount will surely be cause for red alert.

Problems in engineering

I’m sure we all wish we could jump to ward speed, whether that’s to accelerate the journey to FI or leap to a future time when Covid no longer taints our lives. The sad truth is that the warp drive is out of action and there’s no escape pods either. Much like children on a bear hunt, we’ve just got to go through it. My internal financial emergency alert system will remain at amber, at least until I know I won’t be taxed through the nose again. In terms of the other fiscal and non-fiscal shenanigans, there’s little merit in engaging in constant red alert – it will simply leave you feeling blue.

TTFN,

Mr. MedFI

3 thoughts on “Red Alert

  1. I know Imof people who are hit with big tax bills and feel that it is a grave injustice.
    It goes to show the advantages of having a bit if financial resilience or at least not have all yourvusual salary go out as your numerous direct debits are paid the day after.

    Like

    1. The injustice is palpable but also unfounded. It would, however, be an easier pill to swallow if it were spread over the year. Resilience across the board (wealth, health etc.) cannot be underestimated!

      Also congrats on ye olde 7 figures GFF!

      Liked by 1 person

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