Big changes are afoot in the Tunstall household: we’re looking at extending our home and upgrading our vehicles. Expensive stuff… Which kind of makes my skin itch like I’m about to break out in hives. You see, I get incredibly anxious about money. I fear I come off as stingy, but that’s not quite the whole story…
I’m careful to the point of being labelled tightfisted (it’s been said), but my attitude towards the moolah is rooted not in a lack of generosity – it’s actually borne of a very real fear… I have an (arguably irrational) dread of a certain four letter profanity: debt. This probably stems from the fact my mother is an accountant and did a pretty good job of instilling her values in me. Alas, I may have taken the lesson a little too much to heart, because until I reached my mid twenties I was so freaked out by credit cards I refused to consider owning one.
With age, of course, comes a little wisdom – allegedly. Having grown up too sensible, too long, I did what any self-respecting young adult does before embarking on Adulthood Proper: I went off the rails. I didn’t quite get into serious trouble, but I did waste a helluva lot of money partying in London; I did put on an awful lot of weight (awful being the operative word); and I did live out of my overdraft for a short while. Before having an inevitable epiphany and getting the hell out of the Big Smoke before it destroyed me forever!
And then I really did grow up.
I sorted myself out and quickly got my finances back in order (turns out the price of alcohol in London is obscene!). Part of that process involved researching the ways in which it’s possible to take advantage of a credit card; and now, wherever possible it’s my preferred payment method: because instead of making me poor it makes me money. My hubby and I have a cash back card which – so long as we pay it off in full at the end of every month – actually benefits us. Quite considerably when you look at the income across a year.
Today, the only debt we’re saddled with is our mortgage, and that’s the way I like it.
Do Life Milestones Equal Loans?
During the past decade we’ve bought a home, got married, moved, had a child… But never taken out a loan. Our wedding was pulled together on a moderate budget, in the sense that it set us back approximately half of what the typical big day cost at that time. It was still a staggeringly, sickeningly, extortionate amount of money for one day. But, as the saying (I’m generally not too fond of) goes:
‘You can’t take it with you when you die.’
Eep, hypocrite, I know! But if you can’t do it for your big day… In fairness, I originally tried to budget approximately one third of the eventual cost, but quickly realised the reality of planning nuptials on a shoestring, and I was determined not to have my reception in my mother’s garden. (I did, however, purchase my dress for less than £300, which in wedding dress terms is a snip.)
A friend (whose hen I’ll be attending tonight – eek!) is currently planning her wedding. She’s been incredibly efficient in making the arrangements and finalising all details in just two months. Two! This is extraordinarily fast. She asked me in my role of ‘wedding extraordinaire’ (her words!) why most people plan for months?! I pointed out that most people are not in the privileged position of being able to pay outright for everything involved in organising such an extravagant event, and (as I discuss in my post The Smart Bride’s Guide to Planning a Wedding) commencing married life awash with debt is probably not the ideal scenario. It would have been my worst nightmare.
Of course, despite many people being sensible when it comes to budgeting for getting married or anything else, there are many others who take an altogether different approach.
Anxious About Money
Personally, my view is that we all ought to live not merely to our means, but someway short: if hubby and I want an extension and new cars then we’ll have to save up for them.
Granted, that’s boring as brick dust, but I don’t want the excitement of being unsure whether I can pay my bills, thank you every much. And frankly, I don’t understand those who are only too happy to flex the plastic. It still freaks me out.
Before anybody comes for me with a pick axe, I should probably add that I absolutely sympathise with those who struggle to make ends meet despite their very best efforts. In fact, it’s where a lot of my strong feelings come from: we went without quite a lot when I was a child, and – in my bid to stave off debt – we are not excessive now either. The folk I’m actually referring to are those who covet items they’d never be able to afford outright – and so bung them on the credit card without a second thought. And do that over and over again. I struggle to comprehend that mentality because it is so far removed from my own.
Last night I was chatting to hubby about writing this post, because though it’s something I feel strongly about I’m well aware it could be considered controversial. But while discussing my concerns with him, he pointed out something which put my mind at ease…
For every person who takes offence because they believe my family is in a privileged position, there will be many more who are in a better situation than we are.
And so my point stands: if we wish to keep a firm hand on our financial affairs then we must all live within and short of our means. It shouldn’t be about comparing who has most, that’s not relevant. Our finances should never be about keeping up with the Joneses – they should simply be about keeping up with our bills.
My annoying big brother once told me something which really struck a chord:
Life is not fair, and the sooner I accept that and give up trying to be a vigilante, the happier I’ll be.
(Totes true by the way.)
Of course, we all make mistakes, particularly when we’re young (hello). In which case consolidating existing loans is often the best way to move forward, should you wish to do so, and it’s worth shopping around for the best loan at somewhere like Readies. Incidentally, if you are in that situation, you can find trusted information at gov.uk, Money Saving Expert, and Citizen’s Advice Bureau. Alternatively you may wish to seek independent advice from a solicitor.
So that’s a little background to my strong feelings about debt. But I’m wondering whether I may have to reconsider my position – itchy red rash or no.
A couple of times recently my husband has mentioned the incredibly low cost of loans right now, thanks to so-called “Brexshit“. This makes me very uncomfortable…
I’ve (mostly) succeeded in
drilling hammering encouraging my hubby to adjust his ideas about money to align with my own. Because really, it’s a case of security for me. For example, if I knew we would always have enough, then I’d be more than happy to indulge in the odd extravagance and splash the cash on family and friends.
But none of us really know what’s around the corner, do we?
Ergo, my fear: I need that security blanket of savings to feel safe. It’s a genuine source of anxiety for me. Not least because both hubby and I are self-employed. So while home improvements and vehicles may be on our radar, loans are definitely not, thank you very much.
But, as my husband pointed out (possibly correctly – possibly), if the cost of a loan is currently around 2.7% (according to my husband, I’ve not done the research so do not take this as fact), it may be worth our while considering that option. It all comes down to value:
Would the security of keeping our savings in the bank instead of ploughing them into an extension be worth a few hundred pounds to us? If the answer is yes, then a loan may not be such a bad idea after all. Hmmmm…
How do you feel about debt? I’d love to hear your thoughts.
This is a commissioned post.