In Spanish the term cuesta arriba literally means to go up hill and figuratively the term refers to an “uphill battle.” In other Spanish speaking countries it is defined as a period of financial stringency or post holiday budget crunch after Christmas. Well, in Costa Rica January is definitely “up hill” for most Costa Ricans and some gringo retirees who live here as well. Why?
The majority of workers in Costa Rica receive an aguinaldo or 13th month salary in December. Unfortunately, most people waste this money instead of putting part of it aside in order to meet the yearly price increases and bills they will face in January. A lot of locals find themselves in a financial jam and short of money at the beginning of the year because they go overboard buying expensive Christmas gifts like flat-screen TVs, spending money on traditional dinners and on popular celebrations like the fiestas de Zapote, waste money on booze and food, go on expensive family outings and engage in other activities that leave a huge dent in their finances. I read several editorials in La Nación and La Extra newspapers recently blasting the Ticos lack of self control and poor spending habits during the Christmas holidays and at the beginning of the new year. Last week the annual festivities began in the town of Palmares which is just another excuse to party and spend a lot of money on drinking beer. There is an expression in Spanish which sums up these profligate spending habits: “Después de un gustazo, un trancazo” or in English “After the feast comes the reckoning.”
To make matters worse and financially strap people even more are the annual bills and expenses that have to be paid at the end of December and in January. The marchamo or annual vehicle tax must be paid by the end of December. It was increased last year. In January some automobile insurance policies must be paid. The new onerous luxury home tax must also be paid by January 31st. Even post office boxes have to be renewed at this time of year. Couple these annual expenses with increases in water bills, electricity, buses fares, education, private universities and you can see why many people find themselves short of money at this time of year and have to take desperate measures to try and make ends meet like pawing some their possessions.
Recently, just one large pawn shop chain alone, La Cueva, reported report over 1,300 transactions in one day with people pawning jewels, computers, flat-screen televisions and anything else they can get money for. Because of this annual financial crunch hockshops are overflow with items during the first part of January. According to a recent study this trend doesn’t let up until Easter when the majority of people either get their finances in order or lose the items they have pawned by default. It turns out that only about ten percent of those who pawn their possessions fail to reclaim them.
The so-called cuesta de enero also takes a direct emotional toll on many Costa Ricans. The stress caused by trying to make ends meet at this difficult time of year leads to an increase in depression and anxiety according to a couple of Costa Rican psychologists.
Many foreign retirees and residents are also affected at this time of year by price increases in utilities, the new luxury tax on homes and a tax of around $400 for an active corporation and $200 for an inactive corporation. Both of these taxes must be paid in January. The impuesto solidario or the so-called luxury home tax has to paid by January 16th and the tax on corporations by the 31st. I find it interesting that there was an article in La Teja newspaper the other day about a gringo pawned a wetsuit for about $150 dollars. I find this anecdote amusing and hope it is not an indication that some Americans living here have become so aticados (Costa Rican like) that they now have the same spending habits as the locals.