Bank of England warns of the consequences of thrift

thriftybabe

I think a lot of it is outside pressure from other families. The kids in my street have lots of big things each year. We feel we are miserable compared to them. Every family has at least a Wii and an X-box. We have neither. Certainly our kids are younger but they all go mental at Xmas where we stay!

lemonjelly

thriftybabe wrote: »

I think a lot of it is outside pressure from other families. The kids in my street have lots of big things each year. We feel we are miserable compared to them. Every family has at least a Wii and an X-box. We have neither. Certainly our kids are younger but they all go mental at Xmas where we stay!

People are going to have to make some hard choices, or be forced into a corner.

I work in the advice sector, and years ago had a client I was helping with debts. He wasn't working due to "ill-health" (wasn't sure about whether he was doing a load of cash in hand work in addition to his benefits). He had a wife + 1 child. Now, when giving debt advice, one of my "rules" is that when we set up an action plan, you don't take on more debt. Well this guy would, & would then just expect it to be sorted (this is a nightmare & can bring you/the organisation into disrepute).

Anyway, one november the guy came to see me without an appointment, & pulled out a new credit agreement for £1500. I advised him that he had repeatedly been advised by me & others he cannot keep on taking on more debt, because of the consequences of this. In addition, our working agreement stated not to take on additional debt. His response was that this was different. It was for his childs Christmas present. When I challenged this as being unreasonable, he stated his child wanted a quad bike. I was explicit, this was unreasonable & I wasn't going to renegotiate his entire repayment plan based on this. He challenged me & said was unfair, & that his child wasn't going to be deprived just because of his ill health.

DEPRIVED! Don't know how I held it in, but I explained that no-one in the building had been on a quad bike, let alone owned one. Despite that, none of us were "deprived".

I closed his file & sent him packing.

Anecdotal, but this is how some people see debt.

One last thing, he hadn't made a single payment on the quad bike loan. It was less than a week old. He'd signed the loan knowing he never had any intention of sticking to its terms.

SingleSue

Ah Christmas....

Since becoming the only adult in the household, our Christmas has been a little different.

We never went completely OTT before but the children would have maybe around £60 - £70 spent on them each plus he would spend close to a couple of hundred on mine, an average of £50 per parent, £20 per niece or nephew and £25 per sibling, now the children have a strict maximum £15 per child allowance, ex mother in law gets something for £2 or £3, sister and brother maybe £3 each, my parents less than £10 between them and nieces and nephews as low as I can get it (managed to pick a couple of pressies up last year for 50p each!)

I thought my children would hate it and I did feel guilt at not being able to afford what their friends were getting but the kids love the presents I get for them and understand that even that has left me short and that on occasions, I will go without food for myself to get them.

In short, they appreciate it.

adouglasmhor

IveSeenTheLight wrote: »

I think most people have for years overspent on Christmas.
Probably retail driven.

Anyone remember the advert (can't remember what for, bread I think) where the delivery boy wanted a racer bike for christmas and the father told the son they couldn't afford it, maybe next year son he said.

The joy when the bike was in the hallway was clear to be seen.

We need to go back to having one special present that means something instead of having so much the kids don't know what to play with.

Yellow pages!

IveSeenTheLight

adouglasmhor wrote: »

Yellow pages!

Cheers

http://www.youtube.com/watch?v=TMYZyUygW6Y

thriftybabe

lemonjelly wrote: »

People are going to have to make some hard choices, or be forced into a corner.

I think you are right lemonjelly. I have had numerous conversations and I am shocked at people's attitude to debt. Many people have said "it does not matter as long as you can service it". Fair enough but if I had had that attitude I would probably have lost my house by now! It gets me mad cause that is how the country is in the situation it is. These people do not worry and think that it is their right to get help.

A family we know live week to week. They go on holiday 3 times a year. The kids are in the best of gear and they throw birthday parties for them every year. There is a new car sitting on the driveway. If one of them were to lose their job they would be up the creak without a paddle!

Our family can do all these things but choose not to. We do not want the kids brought up thinking that they can get everything that they want. We want them to value what they have got and only want them to get what is within their means. We have cut the cloth due to our work situtation but we still have a bit of money where we could do all the above things but we are not!

adouglasmhor

IveSeenTheLight wrote: »

Cheers

http://www.youtube.com/watch?v=TMYZyUygW6Y

can't access you-tube from here but I always remember somthing like "I was right about that saddle though".

JayScottGreenspan

JonnyBravo wrote: »

Ah yes the old paradox that what is good for the individual isn't necessarily good for the population as a whole.
Tough.
I'll continue to think of what's best for me thanks.

My thoughts exactly, people will do what's best for them, not what's best for the population.

Of course, there is one major player that can swim in the other direction, and that is the government. If they'd saved up a war chest through the boom years they would have dampened the size of the bubble and subsequent bust (which would have been nice), and they could now pump loads of money into public spending and tax cuts to bring us out of recession (which would be nice).

Anyone with a basic graps of economics couldl have come up with such a plan. As it happens, they did the opposite...

:T Well done, Gordon. Well done.

IveSeenTheLight

adouglasmhor wrote: »

can't access you-tube from here but I always remember somthing like "I was right about that saddle though".

Because it was "like a razor blade"

lemonjelly

thriftybabe wrote: »

lemonjelly wrote: »

People are going to have to make some hard choices, or be forced into a corner.

I think you are right lemonjelly. I have had numerous conversations and I am shocked at people's attitude to debt. Many people have said "it does not matter as long as you can service it". Fair enough but if I had had that attitude I would probably have lost my house by now! It gets me mad cause that is how the country is in the situation it is. These people do not worry and think that it is their right to get help.

A family we know live week to week. They go on holiday 3 times a year. The kids are in the best of gear and they throw birthday parties for them every year. There is a new car sitting on the driveway. If one of them were to lose their job they would be up the creak without a paddle!

Our family can do all these things but choose not to. We do not want the kids brought up thinking that they can get everything that they want. We want them to value what they have got and only want them to get what is within their means. We have cut the cloth due to our work situtation but we still have a bit of money where we could do all the above things but we are not!

The first bit of your quote is quite right thriftybabe. Problem is, people only plan as far as their nose. People get into serviceable credit up to their weekly/monthly income. Even a minor change of circs can create havoc (just 1 week off sick can mean everything is in arrears). If you have a major change, then the brown stuff really hits the fan!

Part 2 of your quote, oh if only more had the self discipline! Sometimes, people who do this are seen as tight or whatever. Sometimes, I wonder if I'm being mean with myself denying myself some of these "luxuries" (actually, I think most of it is [EMAIL="!!!!"]!!!![/EMAIL]). yet I do get mocked by some people.

Whatever happened to saving up for something to buy it?