Learn to control money but do not allow it to control you

savingwannabe

Jen BR in Mouseann's thread is a great cook too. Yum. I am getting hungry. Have a good day.

debbiedeejay

Keep posting Firewalker -These posts are your diary/blog and reading them each day for me gives me and I expect many others a little bit of inspiration to be MSE too!:)

Choc-addict

Agree with others Firewalker - I read your posts every day and although I don't post, I find them very inspiring and you always give me something to think about - thank you

P.S - a blog would be a fab idea for you! I'll certainly subscrible!

Firewalker

In couple of hours I have to be at the Airport – flying to Frankfurt and then on the train to Kassel. So this will have to be brief – but after the lovely messages I didn’t wish all to think that I have disappeared. Mentioning disappeared, has anyone heard from William64 – he has not been around for ages and I really hope all is well and he is coping.

Yesterday I was very, very tired – to a degree where I had to cut a working meeting short because I was starting to forget why I asked a particular question. Hardly slept the night before – just at the moment of falling asleep all my monsters, work, debt, life, came out to play. So I spent most of Sunday night working and trying to read a novel. Interesting thing is, at the moment I am not upset, angry or scared anymore – and my worry seems to have metamorphosed into impatient anticipation. For the first time for a long time I feel in control – ‘I will survive’ rather than ‘All will be well’ type of control.

Because of tiredness, yesterday was not good day for thinking about the deep foundations of debt busting. Still, three things were obvious. One is that if we manage to increase our repayment by £567 the debt will be gone in four years time; if we increase this by £1089 in three years from today it will all be a bad dream. And since I have decided never to say ‘I can’t’ but to ask ‘How could I?’ two further points emerged: a) continue to control expenditure and if necessary cut it further; and b) start tackling the other side of the drive for controlling money, namely increasing income.

Now I will go for a very short run and then hit the road. I might be connected but if there is nothing before Saturday this only means that my technical ability has betrayed me.

Firewalker

savingwannabe

Hello Firewalker, I have assumed WilliamD is on his glorious holiday. I hope so. I miss him too.

All your thoughts about debt repayment sound perfectly feasible, if anyone can find a way you dear Firewalker can. I cannot think of a more suitable name for you.

Enjoy the trip - saviour the tastes, smells and remember to enjoy the new foods and sights!

SW.

ninky_2

Firewalker wrote: »

Because of tiredness, yesterday was not good day for thinking about the deep foundations of debt busting. Still, three things were obvious. One is that if we manage to increase our repayment by £567 the debt will be gone in four years time; if we increase this by £1089 in three years from today it will all be a bad dream. And since I have decided never to say ‘I can’t’ but to ask ‘How could I?’ two further points emerged: a) continue to control expenditure and if necessary cut it further; and b) start tackling the other side of the drive for controlling money, namely increasing income.

hi firewalker. i remember someone once taught me a psychological trick for cycling uphill. they said to focus not on the struggle of getting up the hill but to project further and imagine cycling down the other side. whilst we will all reach physical limits that can't be surpassed this trick does actually work quite well. i wonder if it is possilbe to do something similar with a debt 'mountain'. so do not focus on the struggle of the cutbacks but imagine always emerging out the other side debtfree and being able to use all the money usually spent on servicing debt on investing for the future and enjoying life instead.

Firewalker

SW and Ninky, thanks for your messages. Ninky, will try the suggested hills approach - sounds more appropriate to debt than the one I use for hill running.

I am well and writing - it is just that I suspected connecting is more technically complicated than my knowledge can cope with. So now writing a brief note from the hotel lobby, on a German layout keyboard.

Firewalker

Firewalker

15 June 2010

I can’t believe this one! Got to the Airport, checked in, all well. Walking very fast towards the luggage checks and controls (which today went really smoothly) and a man with a badge hanging off his neck stops me by saying:

‘Madam, I realise you are in a hurry but do you have couple of minutes?’

Now, part of my trade is designing and running surveys because social science needs information and the best source is people – of course asking them intelligent questions. I know how hard it is to be doing these surveys where you stop people and nobody talking to you. This is why I stop and smile...and than hear:

‘Do you live in the UK?’
‘Yes’ – I say.
‘Do you use credit cards?’
‘A bit too much’ – I say.

And then a broad smile brightens his face and I hear him say:

‘This will certainly be of interest to you.’

A leaflet about MBNA Virgin credit card is produced.

‘No.’ – I say and purposefully continue my journey. Poor bloke! But at the same time flogging credit cards at the Airport? ‘Oh yes, today at the Airport I had a coffee, a newspaper and a brand new credit card with £5,000 limit and 35% APR on it.’

On a more serious note, I only had a coffee and a packet of chewing gum and resisted the books, magazines, sweets and chocolates and the Tie Rack where there is always something very nice and needed to be had. My strategy with the ‘wants’ seems to be working – knowing my ‘wants’ doesn’t allow me to make them respectable and acceptable by dressing them as ‘needs’.

Today I also run for the first time since my back went – feels good. But now it is late and tomorrow will be a very long day.

Firewalker

Firewalker

I am back and pleased to report that during the four days I was in Kassel I hardly spent anything – apart from some inevitable spend on travel (train) which will be claimed as expenses. In fact, there was space for a little indulgence for me – I bought two books in a book store at Frankfurt Airport. One is about human behaviour being predictably irrational and the other one is about the mistakes that women make with money. The latter is entitled “Nice Girls don’t Get Rich: 75 avoidable mistakes women make with money” and is by Lois P. Frankel. Has anyone seen it?

I managed to read a sizeable chunk of it on the way back and found it quite interesting: it is very practical and begins with a test to figure out which areas of one’s relationship with money are strong and which are weak. Guess what? I scored top on ‘spending your money wisely’. So, it is working, I am gaining control and mastery...Unfortunately, in most other areas my scores left much to be desired. But the two worst were ‘saving and investing for future wealth’ and ‘maximising your financial potential at work’.

Today, OH and I calculated our net worth – and that is when I realised that there is a slight problem with the test and my scores. It is written by an American for Americans – so saving for one’s future (pension, for instance) is done directly by the individual. As it turns out, I have been saving quite a bit for my future and my pension fund is OK but I did not count it because my contributions go out of my gross and not net salary.

This aside, it turns out that as a couple OH and I have quite substantial net worth. This is the total worth of possessions (houses, cars, land and other property, jewellery etc.), savings, investments, retirement funds etc., minus mortgage, loans and other debt. Calculated it like that certainly makes one feel much better. Apart from being emotionally useful this also is a rather practical approach to not simply and only paying one’s debt off but also planning one’s financial health. What did we find out?

a. We are not poor – quite the reverse.
b. Our net wealth is going to grow irrespective of whether we pay the debt or we save more.
c. Very small proportion of our net wealth is ‘liquid’ – this can be a potential problem.
d. Our household problem is that there are three adults and only one of us earns regular income. The men of the house would have to get into gear...

I suspect that I will be thinking more about this one: one of my worry was that till now the way I have approached our financial matters is lopsided: the emphasis is on budgeting (which is short term) and controlling spending.

Now off to talk about some writing – on fitness and the importance of it.

And the saying for today is:

“Whoever said that money can’t buy happiness simply did not know where to go shopping” – Bo Derek

Firewalker

Firewalker

Last night we went to see a movie so there was no time to update on MSE progress. Saturday morning I did the accounts for the week, the menu and the shopping list, and we had a talk about money: where we are, what are we going to spend on the house and what our approach might be in the future.

Last week we spent a total of £156 of which: £56 was spent on food (not bad given that we are four adults and a boy with big appetite at the moment; but the stores are going down); £15 was spent on other regular stuff; £46 was spent on a cookie maker and osteopath and £50 was gifted to son number two for his birthday (he need clothes desperately and is going back to university next week). Good news is that there does not seem to be any/much irresponsible spending last week. Bad news is that this left about £80 in our account – which means that we will go slightly over what we bring in this month. But not as much as one might expect: unforeseen visit to the osteopath from both of us don’t come cheap.

Work on the house will start at the beginning of July – we are going to have it decorated on the outside (a very obvious need). In September we are going to have someone to completely re-do one bathroom, re-do the shower in another one and re-build the ceiling in the kitchen. We have realised that this is becoming rather urgent as well – the bathrooms leak from time to time and because of this we have holes in the kitchen ceiling. This affects our quality of life and the value of the house. All will cost in the region of £9,000 – yes it makes me mildly uncomfortable and I would like it off the debt but this only my drive for security. Calculations show that doing the work on the house will increase our net worth twice as much as paying off a chunk of debt. We will have to earn more for that – and we will.

Today, we might go to a park to celebrate Father’s – no spending, mind. And I will finish ‘Nice girls...’ and probably start reading ‘The Secret’.

“A bargain is something you can’t use at a price you can’t resist.” – Franklin Jones

Firewalker