Why I'm Stupid - a short story.

Batfink

A couple of years back, with the help of this forum, I managed to finally clear what had started as a £25,000 debt. Can you guess where this story is going yet?

Well - life was rosy, all of a sudden I had such a lot of spare money and even managed to do some saving. With my new found affluence I thought 'I'd really like a nice car, and I can afford it now' so off I went and ordered a brand new Mercedes (£28,000 worth) on a 3 year low interest PCP deal. My existing (fully owned) car covered the £5,000 deposit and it was just £320 a month - easily manageable. This seemed fine at first, but I didn't really enjoy the car as much as I thought and it seemed rather expensive to run, so with the car now a year old I decided to trade it in for a small sporty replacement.

There was a little negative equity as I was ending the agreement early, but that didn't matter - I had the savings mentioned earlier. So, £1000 paying off the finance, and £1,500 deposit for the new PCP agreement and off I go again (£265 a month this time). Turns out, said little sporty car wasn't so good - it was noisy, felt like it had no suspension at all and was costing a fortune to run - I also noticed that I was back to how things used to be, no money left at the end of the month. I wasn't struggling as such, but wasn't saving for the future either, and don't forget, there's a lump sum at the end of PCP....or deposit for another one.

So, I dug out my old spreadsheets and started working out a budget. Even with the losses of terminating early, it was going to be financially sensible to go back to a more normal car. Indeed, it'd save me £6,000 over the first three years - basically a months wages every year.

This time, it hadn't even been a full year so it cost me £1,750 to end the agreement. At least this time I was sensible - chose a sensible car, have got it on a 2 year HP deal so that it's mine at the end (and with just 3.9% APR).

Anyway - this short story isn't looking so short. In terms of payments, deposits and settlements alone I've spent just under £15,000 on finance for silly cars the last two years, before you think about running costs, so what I'm trying to say is.....if you've just cleared your debts, don't be a pillock like me and start throwing money away - I'd be so pleased to see that money tucked away in a nice bond earning interest, instead it'll be 2 years until I can start saving again

x

**Amy**

Awww at least you know now before you got deep in debt.

xxx

beanielou

Not so stupid as you noticed/realised your mistakes.

hounslow_boy

Batfink wrote: »

A couple of years back, with the help of this forum, I managed to finally clear what had started as a £25,000 debt. Can you guess where this story is going yet?

Well - life was rosy, all of a sudden I had such a lot of spare money and even managed to do some saving. With my new found affluence I thought 'I'd really like a nice car, and I can afford it now' so off I went and ordered a brand new Mercedes (£28,000 worth) on a 3 year low interest PCP deal. My existing (fully owned) car covered the £5,000 deposit and it was just £320 a month - easily manageable. This seemed fine at first, but I didn't really enjoy the car as much as I thought and it seemed rather expensive to run, so with the car now a year old I decided to trade it in for a small sporty replacement.

There was a little negative equity as I was ending the agreement early, but that didn't matter - I had the savings mentioned earlier. So, £1000 paying off the finance, and £1,500 deposit for the new PCP agreement and off I go again (£265 a month this time). Turns out, said little sporty car wasn't so good - it was noisy, felt like it had no suspension at all and was costing a fortune to run - I also noticed that I was back to how things used to be, no money left at the end of the month. I wasn't struggling as such, but wasn't saving for the future either, and don't forget, there's a lump sum at the end of PCP....or deposit for another one.

So, I dug out my old spreadsheets and started working out a budget. Even with the losses of terminating early, it was going to be financially sensible to go back to a more normal car. Indeed, it'd save me £6,000 over the first three years - basically a months wages every year.

This time, it hadn't even been a full year so it cost me £1,750 to end the agreement. At least this time I was sensible - chose a sensible car, have got it on a 2 year HP deal so that it's mine at the end (and with just 3.9% APR).

Anyway - this short story isn't looking so short. In terms of payments, deposits and settlements alone I've spent just under £15,000 on finance for silly cars the last two years, before you think about running costs, so what I'm trying to say is.....if you've just cleared your debts, don't be a pillock like me and start throwing money away - I'd be so pleased to see that money tucked away in a nice bond earning interest, instead it'll be 2 years until I can start saving again

x

Hi batfink, thanks for sharing your story. The gift of hindsight is a truly wonderful thing, how different my life would be if I had it

Thing is you can't just read anecdotal stuff and expect it to change your habits, you really have to go through it and experience how it feels to be in debt with b*gger all to show for it before you change.

Nargleblast

Yes, you have been a right pillock. At least you recognise that, so maybe not as pillocky as some. How about setting yourself a target date to clear that £11,000 and use some of the methods you will have picked up from this site to do it? You could get that 2 years down to a lot less by a bit of crafty budgeting! Good luck.

Batfink

Nargleblast wrote: »

How about setting yourself a target date to clear that £11,000 and use some of the methods you will have picked up from this site to do it? You could get that 2 years down to a lot less by a bit of crafty budgeting! Good luck.

I most definitely will be, I've already gone back to my original spending budget, sweeping the rest of the spare money into savings ready to settle early. With a bit of effort I could probably have it cleared by Christmas 2011 - indeed, that will be my target. 13 months - £850 a month, should be doable.

x