Bank of England warns of the consequences of thrift

inspector_monkfish

lemonjelly wrote: »

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.

there are words for people like this fella, but sadly not allowed on this forum :mad:

Generali

inspector_monkfish wrote: »

An attempt by British consumers to rein in spending after the harsh lessons of the recession could limit growth and therefore depress household income further, the Bank of England warns today.


http://www.telegraph.co.uk/finance/economics/6212215/Bank-of-England-warns-of-the-consequences-of-thrift.html

I've been banging on about this for a while as it's one of the problems that Japan faced after her housing market fell over. People saved so consumed less so GDP fell so unemployment increased so people saved more so consumed less so GDP fell...........

Lotus-eater

IveSeenTheLight wrote: »

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.

I remember that

The biggest problem is, that today that would be an advert for a credit card, not yellow pages.

Generali

Lotus-eater wrote: »

I remember that

The biggest problem is, that today that would be an advert for a credit card, not yellow pages.

And it would be a £4,000 Giant carbon fibre thing which is no good for mile eating anyway but is great for showing the neighbours how rich you are.

IveSeenTheLight

Lotus-eater wrote: »

I remember that

The biggest problem is, that today that would be an advert for a credit card, not yellow pages.

I'd never give my kid a credit card for christmas, although at 6 months he would probably like flicking through the yellow pages (he love's books)

RabbitMad

thriftybabe wrote: »

I agree Lemon Jelly. I think Christmas will be hard on retailers. We have reduced everyone's Xmas amount this year and I am sure many more will be doing the same!

I'm not, however my family will only be getting presents from play.com (as i have a pot of money from selling unwanted dvds on play trade)

Plus the amounts were never that high anyway

fc123

adouglasmhor wrote: »

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

Where are you? China or Afghanistan? If the latter....good luck.

mbga9pgf

We are about to kit ourselves out with all the furniture we will need for the future home; not cheap, but prices are as low as they are going to get IMHO. If the BOE keep on chatting the pound down, they are going to get pretty pricy pretty quickly. All going on a 0 percent card for the next 9 months.

tiff

We're buying second hand "quality" furniture, having saved up for it. We didnt used to but learned a lesson before we got into trouble with debt.

The weird thing is, I love it - my Mum used to put such scorn on "second hand" that it was something we steered clear of.

LeeSouthEast

JayScottGreenspan wrote: »

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.

I suppose he could always get a loan!


Again.

(From the IMF).:mad: