Debt free and staying that way while I re-evaluate life and keep blood sugar levels down

lucielle

I’m following as well. 

L

WinterWarrior

Happy new diary. I’m all in with @foxgloves theory. I’m a very early 70’s child and that’s exactly how my parents were, just a mortgage and do without if you couldn’t afford it. I do wish that they’d drilled their money management skills into me, instead I had to learn the hard way. 

Humdinger1

foxgloves said:

Hi Humdinger1 - Great to see you've started a diary. We all share & learn from each other on here & you have clearly got an epic debt-busting saga to tell, having managed to clear such a high proportion of debt. As @Blackcats said, I'm sure I will have engaged in much of the same cash-spraying activity back in the day, despite working in a very different sector. It is interesting to note that you & I are the same age.....I think it would be very interesting to do a study on the trajectory of the personal finances of people born in the mid-1960s. My theory (which may be rubbish, but bear with me.....) is that we were born to parents who lived through the war as children, & very much in the shadow of wartime austerity afterwards, in the 1950s. So many of us probably had parents who were pretty careful, didn't use credit (mine had a mortgage & one car loan that I know of in their entire lives) & believed in saving for things. My Mum & Nana were very scathing about buying things on the 'never-never', when people would end up still paying for stuff which would already be nearly worn out. Now, we were a middle-class family & I didn't go without anything, but that post-war, savings good, credit bad, living withing one's means culture was very much in evidence. So given that background culture, us 1960s-born teens go off to university or whatever in the 1980s, & feel we have been let off the leash financially.........& that coincides with the start of the credit boom. An overdraft at first for me (one which lasted over 23 years), then a loan, then came the credit card, the car finance........the amount one could borrow if in full time employment seemed limitless. It felt modern, the solution to so many things, very different to the attitude to money my parents had grown up with. I'd love to know whether there is a correlation between poor money control & being born in the 1960s. Maybe every decade has its own debt-trapping - perhaps those born in the 1970s & 80s borrowed more than us because we had already laid the path for them, normalised consumer debt, I don't know. For younger generations, there is a very real problem of needing two incomes to facilitate paying a mortgage or uncontrolled private rentals - that doesn't make debt any better or desirable, & it doesn't mean that people don't still waste money, but I can understand how difficulties could soon arise having lost an income when two are required to pay the sort of monthly rents or mortgage payments I certainly never had to pay.
There is probably a strong element of confirmatory bias in my theory, but I regularly read past spendy/debt tales on these forums, think "Oh my goodness, that was exactly me!", then discover the writer is of a very similar age. 
Anyway, I shall enjoy reading your money-wise diary, @Humdinger1.
F x

@foxgloves I foresee hours of fascinating debate! Yes, probably is my initial reaction.  The sense of dogs being let loose was manifest, in hindsight.  No sense of proportion or even a feeling that for our own sakes, we might perhaps consider reining it in, even slightly.   One upside though is that I never get bored of budgeting because it's an exotic new skill, in the great scheme of things.  I seem to remember reading a theory of Jung that you would never be able to get every possible skill up to the same level: if you did, everything would become bland.  You need to have some unassimilated experiences to keep the world fresh; by that I don't mean we can't do it, but it's novel (given that we had to learn it quite late) enough to stay interesting for ever.  Thanks everyone who's subscribed, commented or read.

Humdinger1

So I'm hoping that this diary will be a mixture of the philosophical and the practical.   This morning, I transferred £8 and another £47 to savings.  The first is the change from the £60 per week limit on the box scheme delivery; the second reflects the fact that I'm not having a fish delivery this month as there's plenty in the freezer to use up.  While I do want to support small producers and food companies (partly because I don't want big business to take over the world; partly because I think good food is one of the best things i can do for our health) I'm thinking that buying more tinned fish - perhaps alternate months will help the budget.  One of the tendencies I've struggled with in the past is a feeling that I have to do everything the perfect, ideal way all the time and beating myself up when I couldn't or didn't.   I remind myself that a market consists of more than one person and I don't have as much power as I fondly imagined at one point.  I will post shortly about my attitude to savings and hope people will chip in whether they agree, disagree or just see it differently.   Love Humdinger xx 

Humdinger1

Re savings:

I have £3,558 in an esavings account attached to my current account with S*nt*nd*r and £5,003 in PB; the £3 were bonds that my grandmother bought me as a child and which I've added to the 5k.  The former is at an interest rate of 2.72% which I know isn't the best but it is convenient and I plan to use the interest to help pay for Crimbo 23.  In the year I've had PBs, I've won the princely sum of £25 (see you in Rio!); I'm not sure if the feeling that I could win big on the latter is a hangover from magical thinking days and I know that inflation is eroding the value of that sum.  But I don't think there's an account out there that comes close to matching inflation; if I invest it in shares, I could lose the lot as well as not having it to hand if an emergency arises. 

Of the £3, 558 I transfer £1,500 to a Ll*yds account each month and transfer back the same day so that the account fee is waived.  That account is in my married name and I use it to pay occasional cheques in from old-fashioned though much-loved relatives.  I would like the esaver to have at least £5,000 by December; I think with the 2 months I don't pay council tax, and underspending on the grocery budget, it should be achievable though I will be sending DD £100 for her birthday at the end of this month. 

Onwards and upwards love Humdinger xx 

Blackcats

Popping in to provide more confirmatory bias evidence for @foxgloves theory ..... I'm 58 too and participated in all the borrowing, debt building activities available to me

Humdinger1

@Blackcats yup, it was a perfect frenzy of debt.  I remember getting my first credit card, close to Christmas. I called them to find out what the limit was and to see if I could transfer some money to my current account (ouch! Trouble ahead there, no?!).  They wouldn't tell me the limit by phone but when I asked if £200 could go into my account, they were encouraging me to go for £2k...that was back in the 90s I think.  I have I hope helped my daughter avoid this; she has a small emergency fund at uni and understands that you put your student loan in a separate account, just transferring the weekly amount across.   This far (at the end of the first term) she has stayed out of overdraft.

My mother had a head in the sand approach to money.  My father died unexpectedly at 43, days before my 18th birthday.   The shock was colossal and there was more than enough money but she hated opening letters.  I once opened a kitchen cupboard and hundreds of unopened letters from the bank fell out.  She wasn't in any trouble; used to pay off my overdraft after a lot of tutting; but never talked to me about budgeting, probably because she didn't know how to do it herself. My daughter says that she's been hearing once a week for the last 4 years from me about the evils of overdrafts.  I say good! If I can help you avoid the difficulties I had, then it's all been worth it.

badmemory

I too have an account that I transfer money into & then transfer most out of but in my case a few days later.  This keeps my account active so that I can have their loyalty savings rates & good regular saver.  You asked what we think.  Well an emergency fund needs to be in an account you can access otherwise you wouldn't be able to access it in an emergency or (to my mind even worse) pay a penalty to use it.   As to premium bonds then the problem is that the more you have the more you win.  So if the rate is 2% then you are more likely to win £1000 if you have £50000 than you are to win £100 if you have £5000.

FreetodoasIlike

Hi, I’ve subscribed to your diary. I totally agree with what Foxgloves said (sorry, I’m fairly new to the forum and don’t know how to quote). I am a little older. I was born in 1956, and when I was younger, we lived a fairly frugal lifestyle. I was an only child, and when I was about 7 we moved to Hong Kong. Although my mother and I had a good lifestyle (with live-in help, which was the norm then), my father worked himself to the bone and became an alcoholic. I didn’t know it at the time, but put the pieces together later, that he must have been sacked (following an incident when he was mugged and robbed, went missing for a few days and eventually ended up in hospital with a fractured scull). His company paid for our return ticket home, but although my father didn’t drink any more,  his mental health deteriorated, along with him developing osteoarthritis so he couldn’t work.

However, I still lived (in my head) what I will call “my lavish lifestyle” and was protected somewhat from the reality so wasn’t really aware of what had happened. I know now that my parents struggled to give me most things I needed. I don’t think they went into debt, but we certainly lived in a much smaller house (in a cheapish area in the North-West) and my mother went back to work, after years of being out of the workforce. She actually worked two jobs, one in an office and another as a weekend cloakroom assistant in a club.

I didn’t go to university (it wasn’t as common then) but did get 8 0 Levels and did a two year senior secretarial course and got quite a well paid job (it was a lot easier then, with shorthand/book-keeping skills and no computers!) However, I got my first credit card when I was around 19 quite easily and bought clothes - you name it - all sorts of things to make me feel good. When the credit card company offered me more money I took it gladly. I saw it as free money!

My relationship with my father had never been good. It was when I was a small child, but since his accident, his personality changed and we drifted apart. It was this that mainly drove me to my marry my husband at 22 to leave home, as not many people lived together then. The marriage only lasted three years, but during that time, I continued to spend on credit cards, which he knew nothing about. 

I met my current partner when I was 26 and we bought a small bungalow in the early 1980s. I paid half the mortgage (when interest rates were around 15/17%) and my debt just spiralled out of control. I still, however, continued to spend though! Eventually, I was at rock bottom and had to confess my debt to my partner. In the early 1980s, I was around 30k in debt. He stuck by me, and we re-mortgaged to pay off my debt. Oh, how stupid I was, as we could have paid the mortgage off a lot quicker!

Anyway, fast forward to now. My partner and I are still together (he is 15 years older). We both have reasonable private pensions and I will receive my state pension this year. We still live in the same small bungalow, so our overheads are low, and we live within our means.  I use my credit card wisely (mainly for online protection) and always pay it off. My partner has always been frugal- he was born during the war to a single mother, so grew up poor. Actually, very poor,  as it was a bit of a stigma then, and he sometimes went hungry. I, on the other hand, wasn’t rich by any means, but I can’t remember doing without anything.

Credit for me was so easy to obtain. We don’t haven any children between us (my partner has grown up children and grandchildren) but I worry for this generation. One of his grandchildren has managed to buy her own house but the other two still rent).  At Uni, they were offered credit cards in the fresher week. I’m so glad, Humdinger1 (sorry, don’t know how to highlight or quote) that your DD seems to be very sensible about credit/using her loan money. I only wish I’d been the same when I was younger. However, hey ho, you live and learn.  I will certainly follow your diary with interest. Well done for getting yourself our that massive debt!

Oh dear, I didn’t mean to post my whole life story on here - honest guv! 

katsu

I was a child in the 80s, born in the 70s. I remember the high interest rates and my family struggling. I have a friend of a similar age and we have both been driven to get our houses paid for, to secure the roof that our families struggled to keep over our childhood heads.