Illogical paranoia

Emmzi

Dilema of the day.

My parents offered tro buy me a new sofa. I refused, saying second hand was fine, a futon was fine, and I could afford that.

Then they offered to pay off my car loan.

Now, I'm pretty ok with this. They want to, and they are comfortably off.

The problem is actually handing the money over to the car loan company!

Regular readers will know I do contract work, and get very paranoid about where the next job is coming from.

However, I now have enough cash saved to last for a year. (Co-incidentally, almost the same as my outstanding debt.) Two years if I took a low paid job to supplement it, which in my part of the world is possible. Call centres and banks are all around.

Why do I have SUCH a yearning to put this money in the emergency pot? It's like I just want the biggest pile of savings in the world before I'll actually pay anything off!

I know what I should do is pay off the car loan, then if/when I get another decent contract, pay off the non-flexible loan (leaving 6 months emergency cash) and build the cash pot up again while I chuck money at the flexible loan.

I am so terrified of not getting more work that I want the cash pot to be huge, Gargantuan, Donald Trump like.

It's not even like this is anything but 'found' money. It's a bonus I should use to reduce monthly outgoings.

Argh!!

MinnieSpender

I can see where you're coming from, Emmzi. I've always done contract work and have the same fears. Unfortunately, I've never been able to accumulate a year's worth of savings - whenever I've saved a decent amount, along comes a dry spell where I'm doing the call centre thing for (usually) not much more than the minimum wage and having to dip into the savings just to stay afloat. My current contract goes to the end of the year (Merry Christmas - here's your P45!) but I'm trying hard not to stress about it. I'm also retraining at college (it will take me just over another year to be part-qualified in my new career) so I've got added expenses there with fees and books. PLUS I'm trying to get my debts down.

I'd suggest that if you've got a year's worth of money banked, take the money from your parents and pay off the car loan. You've got a great cushion there already (well done on that, by the way - I really admire you) and you can "pay" your savings with what you'd normally pay for the loan if it makes you feel better.

CosmoCat

minniespender is right, though i have to say i completely sympathise with you (being in exactly the same boat -without the savings). But you've got to see the sense in paying off the car loan seeing that you've already got your year's salary cushion. and you also have the added luxury of saving the car payment from your expenditure now. so that should make you feel like you're saving something. (though i would chuck the car payment at another debt while you're at it, makes the debts come down quicker:;)

hope you come to a good resolution in your emotional mind. i know your logical mind already knows what to do

angel1976

Hi Emmzi,

I haven't post anything on these boards (as I am not actually in debt but slightly obsessed with saving money so I find the tips here very helpful!) but I thought I will share my two cents' worth about your problem cos I am a bit like you.

Basically, I saw a pscyhotherapist for a while a few years ago to sort out some personal problems and this 'hoarding money' syndrome came up in our discussion. He suggested that it is a sign of insecurity and lack of self-esteem. In my case, it was because I was 'abandoned' by my parents (they both worked so I was brought up my a relative) and so never felt the security of my parents' unconditional love as they weren't there. Also, because a child should be loved unconditionally by his/her parents to build up their self-esteem, if the parents are not there, then children growing up like that do lack a certain amount of self-esteem. Thus, because they don't have confidence in themselves, it's very hard to believe in themselves. So I 'hoard money' just in case something goes wrong in my life and I need the back-up cos no one else is going to be my backup! But as he pointed out, I am healthy and have always worked and I am a clever person, so I will never be in a situation where I will need THAT much money as back up! And besides, it's not a case of having a certain amount of money for me, it's as much as possible so if you don't get it under control, you will never have enough money as your back up.

Personally, I still do this a bit... :P My husband and I have quite a bit of savings but it's never quite enough! Even though it's been recommended you should have 3 month's of your salary as a back up, I think that is so little... In a way, you have to recognise what is causing you to hoard money and then deal with the reasons why you are doing so and in a way set your own limit as to how much you need to feel 'secure' (which I believe it's never enough if you don't deal with the psychological issues!) and try to stick with it. It's a constant struggle but I am sure you can do it!

In_Search_Of_Me

Much better to pay car loan off & pay your M&D back slowly (I assume thats what they meant?) ...I know what you mean though. Ihad a huge dilemma last month on whether to pay money into CC or keep a bit back for saving & just got stuck on the deision which makes me laugh as (a) I've never paid off so much in a month on cc, never mind (b) had savings (other than the odd pound!!). Hope you resolve this for yourself!!

Emmzi

Thanks angel. That was a brave post.

Iknow I have my family's backing if things get dire - always have a roof over my head etc. I just hate the thought of having to use it, having seem sibling take advantage of it very badly. (He's sorted out now praise be.)

Also being made redundant has terrified me into action - that precipitated my 'light bulb' moment.

3 months salary.. way too little! In my head I have 'how long would it take to sell the house..?'

Emmzi

fishface-69 wrote:

Much better to pay car loan off & pay your M&D back slowly (I assume thats what they meant?) ...I know what you mean though. Ihad a huge dilemma last month on whether to pay money into CC or keep a bit back for saving & just got stuck on the deision which makes me laugh as (a) I've never paid off so much in a month on cc, never mind (b) had savings (other than the odd pound!!). Hope you resolve this for yourself!!

No, M&D mean 'here's a gift'. It's not even repayable. Hence I'm not sure why my indecision.It's extra, 'found'money I wasn't planningon - surely it should be easy to pay off a debt with it and give myself reduced outgoings???

Spirited_2

You know what to do. If it makes you feel better though, think how much longer your current stash would last if you didn't have the car loan as an outgoing

CosmoCat

I've posted this on my thread and i'm posting it on yours.

you offered a pact...and i'm taking it.

I'll use my cheque to pay into my brclycard and you use M&D's money to pay off car loan.

Deal?

Emmzi

Deal.. will be done within the week!

angel1976

Hi Emmzi,

Glad the post helped! I have to admit that my parents are very generous with their money and I have had to say NO many times just because I don't want to be dependant on them. Lots of people use money as a type of emotional blackmail (not to say that my or your parents do it!). I've lived away from them for many years and they always try to draw me back with promises of money! Maybe that's why I always feel I do not EVER want to ask them for money, hence this money hoarding thing. I know how you feel... I always need a small stash of money (only a couple of hundred quid) somewhere that is separate from my hubby and my joint savings AND I still feel bad when I have to dip into that sometimes. I have no idea why! *sigh*

But if it helps, I think that having a loan is worse than having savings... so you know what you have to do, pay off that loan!

Rgds, Angel