Tuesday, 13 November 2012


OK, so I'm writing all this stuff, and I'm sure a lot of you, dear readers, may think something along the lines of: "Well it's alright for him, he's sorted now, he can preach as much as he likes, but things are different for me."

Well that's not the case. This is where I take a bit of a risk and make myself accountable to you all. I am only part way through my recovery process. It's been a lot of hard work, and there's still a long way to go.

This is where I am right now:

We are still quite deep in debt. A few years ago when I finally called time on our ever expanding debt, I renegotiated a lot of my other half's debts, consolidated what I could, and set up the minimum standing orders on them that I could get away with, and then left them on automatic. I did the same for mine too, but in the meantime I took on 2 more credit cards and we had a baby, which led to me loading a lot onto the cards as we didn't really have enough to get by on.

I admit, we have made mistakes. For example, I came into some cash after a car accident last year. I used the money to pay £2,000 for a driving instructor course for my wife. The idea was she could get a part time franchise with BSM, and work odd hours, like evenings and weekends, while I looked after the baby. We desperately needed the extra dosh, and I thought if I invested in her like this, it would be a skill that she'd always be able to call on if we needed it. I also paid £1,000 out for a cam belt service for my V6, because I figured it was cheaper and safer than paying for a new car/engine if the cam belt snapped.

What I should have done is sell the car and buy a diesel instead. In the end I crashed it anyway, so I didn't have to go through the hassle of buying and selling cars, but it did mean the belt service was a waste... And then BSM were sold to the AA who don't do part time franchises, and the whole point of the part time franchise was so that we didn't have to fork out for child care which is extremely expensive. Another £2,000 down the drain which would have paid off one of my credit cards >:(

I could get get bitter about all this, but life is life, and one must realise that sometimes you do lose out. The point is, you just have to pick yourself up and start again. If you just sit there, your situation won't improve by itself. £3,000 wouldn't have made a huge dent in our finances, but it certainly would have helped, but it's gone now, so that's that, we move on.

The other problem I have had, is communicating with my other half. 

I wouldn't say she is a spendthrift, but she definitely has very different priorities to me when it comes to spending money. For example, when she starts a new job, she invariably buys a new  wardrobe of work clothes, (it didn't help when I accidentally threw out a bin bag full of her clothing). I'm still sitting here in a pair of pants I bought several years ago, complete with a copper grease thumb print that just won't wash out... 

I have to admit, I really do need some new shirts and pants, as I don't really look like management in my worn and faded clothes. Fortunately, my boss sees the value of my skills though.

My wife also suffered quite badly worrying about all the debt we had managed to accumulate. She stuck her head in the sand and just tried to avoid thinking about it. Needless to say, this didn't help when I needed to ascertain exactly what our position was, because she just didn't know. It doesn't help now either, because it's been a few years, so she remembers even less now, and this has led to some significant friction in our marriage.

It's an obvious thing to say, but very difficult to put into practice: As a married couple, you need to be a team and need to work together to pull yourselves out of a debt hole. There needs to be forgiveness too. The blame game just causes further suffering, and you can't go back to the past to fix things - the only way is forward, and forward together.

So. There's been an awful lot of shouting and swearing at each other this month as I've gone back over our finances, done credit checks on her to try and find out the total extent of her borrowing, and renegotiated things to try and improve our lot. Yes, I was angry, yes I acted quite badly towards her, and yes she was obstructive and with held stuff I needed to know. To be honest, it was a really, really cr*p time and I don't feel terribly proud of some of the stuff I did.

However, it was a process that we had to go through. Equally important was putting to bed the bad feelings and resentment. I know she'll screw up again, that's just being human, but I have to play my part too, and although I'll be more disciplined I will attempt to not be judgmental and not dredge up the past yet again.

If you fall off the wagon, you just have to dust yourself down and get right back on it.

The result of all this is that we have paid off over £17,000 over the last 6 years, but still have £32,494.03 of credit card/loan debt with no savings to speak of (not including total mortgage borrowing). Yes, I know we should have an emergency fund, and I've tried a couple of times, but we just haven't managed it yet (we will though!). Currently, I'm trying the credit card trick I mentioned here where you pay the full balance off, to clear my smaller credit card with the £500 limit, and will utilise that as our emergency fund.

Adding all the figures up with what we're paying out, on the face of it, it looks like it will take us at least another 12 years to finish this. That sounds very depressing, but it's probably not going to be that bad. As long as we keep plugging away, we WILL get there. On the plus side, one of our many debts will clear in a little over 6 months time. At that point we will put the £50 a month we are paying out for that towards a savings account and utilise that as both an emergency fund and a lump sum for negotiating reduced settlements. Also, over that period, our credit may improve sufficiently for us to consolidate some more of that debt. Taking these things into account, we should be able to speed up the entire process.

On a slightly different note, one of the interesting things that came up in our heated "discussions", OK blazing rows, was that some of our supposedly wealthy friends have finances that are far worse than ours. I really didn't believe her at first until she revealed a few more details. On the outside, all seems to be well and comparing them with our circumstances, they certainly have bigger houses and more "stuff". However, when I look at their situations dispassionately, I can see how they could make big savings very easily by just getting rid of some of their luxury items (I can't be more specific in case any of them read this).

For that ease of finding more cash I am pretty envious, but then, they don't seem to have acquired any financial nous with their wealth, so in effect, the Missus and I are actually ahead of the game. By the time they get round to climbing out of their respective debt holes, they will have far more debt to deal with and it may end up being a much heavier burden to them personally as well as financially. In essence, what I am trying to communicate here is that you shouldn't compare yourself to others, especially those apparently better off than you. The higher you get, the further you have to fall - concentrate on yourself and your own financial happiness and you will, in time, achieve it.

Looking ahead, I am going to hit 40 very soon and I have no significant pension to speak of. This is something else that worries me. Having done the sums, credit cards at interest rates of 30-40% need to be paid off first, as it's unrealistic for a pension to grow at that rate. How I'm going to make up enough to get a decent living when I retire is another thing entirely though, and I'll let you know how I get on with that in future posts.

So that's where we are. It's not a great place to be, but it's better than where we were, and it's going to get better over time. I am not a spring chicken any more, and I may have left some of this a little bit too late, but who knows? There's a fair chance we may never be properly well off again, but in dealing with our financial problems now, at least in the distant future we are not going to be as dirt poor as we were - a quick example:
Once upon a time, we reached the middle of the month and had £30 left between the two of us. Not enough to pay for transport to work AND feed ourselves for the rest of the month. 
I've been there. Perhaps you are there now. If so, you CAN get out of this, and it doesn't have to be ALL pain either, which is part of the point of me starting to write this blog. I've picked up many tricks and techniques for dealing with debt, dealing with creditors and making more of what you have, (remember the V6?).
And so to the great unknown - the future. You never know, there may be a great opportunity to capitalise on just around the corner...

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