Today I have a little confession to make. Normally I’m pretty good at budgeting and remembering to keep my finances in line, but for the last three months I haven’t paid off my credit card. I’m not sure why I took my eye off the ball there to be honest, but I suppose it shows how you can easily slip into bad habits.
It isn’t thousands of pounds, and fortunately I’m able to pay it all off in one go, but I’m really annoyed with myself for wasting money unnecessarily by running up interest charges. It’s easy to say ‘oh, it’s only a few quid, don’t worry about it’, but these things can creep up on you and get out of hand. Also, while the money may not seem like ‘real’ money or even ‘my’ money, I think I’d be furious if someone helped themselves to the same amount of cash out of my purse.
I really, really don’t like carrying unnecessary debts. It’s not that I think credit cards are evil, they have certain advantages under specific circumstances, it’s just that I’ve seen too much bad stuff related to excessive spending, and I don’t want to go there again.
That’s because I grew up in a massively, stupidly indebted household. While one parent was relatively sensible and responsible with money, the other was a big spender. Our income was modest, but the outgoings were extreme. In spite of not earning all that much, my Dad dressed head to toe in designer clothes, joined expensive clubs, went out wining and dining with his mates all the time, and essentially treated himself to whatever he wanted, whenever he wanted. He also gambled and got suckered into various bad deals and ‘get rich quick’ schemes that presumably got someone else rich quick.
Every six months or so I would look out of my bedroom window and see a new sports car on the drive outside our home. I’d get a strange sick feeling in my stomach, because it always meant that more bad things were going to happen. The bad things didn’t happen to my Dad though, they happened to the rest of the family instead.
When you are growing up, your parents are your role models. Even if they don’t speak to you directly, they can influence your behaviour and your beliefs – sometimes for the whole of the rest of your life. My Dad’s behaviour said: put yourself first, be flash and show off, keep up with and exceed the Joneses, and expect someone else to clean up your mess. My younger sibling idolised our Dad, and by the age of 18 had 12 maxed-out store cards and a string of other debts. At the age of 20, over 80% of their take-home pay was going simply on meeting minimum repayments. They eventually got their spouse to clear some of what they owed, but to this day they still carry some of the debts that they ran up in their teens.
The bank manager got angry a lot. My Dad was called in several times to talk to him about unauthorised overdrafts, missed mortgage payments and heaven only knows what else. We were threatened with foreclosure, and teetered on the brink of losing our home on many occasions. But my Dad refused point blank to go to any of these meetings. It was beneath him. Eventually my Mum was forced to go instead, on her own. She was the one who had to grovel, who had to make the serious promises, to draw up the debt repayment plans and the strict budgets.
What she did was fairly heroic, although I’m not suggesting she’s some kind of saint. She turned the family’s finances around in the space of a few years, even though my Dad still regularly did things that threatened to derail everything. We ate a lot of mashed potato and pasta, family holidays were rare, and there were very few treats. While my Dad wore Pierre Cardin, I wore threadbare hand-me-downs from my cousins.
I learned a lot from watching my Mum: how to plan your spending, how to make cheap meals, how to mend and alter clothes, how to fix things that are broken, how to find deals, how to barter and haggle, how to buy second hand, how to save up and wait, how to do without sometimes. These were good lessons for anyone to learn – they’re great life skills. However, I also saw her at her absolute lowest ebb, including a suicide attempt, and as the oldest child I regularly bore the brunt of her frustration, anger and bitterness. Debt really can tear families apart.
At the same time I learned some bad lessons too: that if you keep bailing someone out that they will suddenly turn around and start to respect you, that it’s somehow noble to keep putting up with selfish, unkind behaviour from your partner when they show no inclination to change. It took a while to unlearn some of that, but I can safely say it was worth the effort.
My most formative time regarding personal finance was the year I left home to go to university. Just before I left my Dad said to me: ‘I know you need lots of books for your course, and some of them are expensive. Just buy the books you need, and I’ll give you the money.’ I hunted around carefully for the best deals, bought most of my key texts second hand, and when I came home at the end of the first term I only had to ask my Dad for £100.
His response when I asked him for the money was this (verbatim): ‘Piss off. I never said I’d pay for your books.’ We both knew he was lying, but arguing with him wasn’t going to do any good. It completely broke my heart, especially as it was for important coursebooks, not for booze or holidays or anything fun. When I went back for the second term, I redrew my budget to cover the £100 hole and any further course-related expenses.
I also promised myself that I would do whatever it took to stand on my own two feet financially, so I never had to put myself in the degrading position of having to ask my Dad for anything else. It was beyond horrible at the time, but in the long run it’s actually been quite good – the experience has given me the confidence to handle my finances, and to sort out most problems as they arise.
What do I know as an adult? Kids need good role models, and they need good advice. Some debts are unnecessary and avoidable. People who are trying to sort out their money problems deserve as much help and support as possible. All of this is why I am so passionate about personal finance, and I always will be. It’s also why I do pro bono work for non-profit debt organisations, and why you will never, never see an ad for payday loans or commercial debt consolidation on this site.
By the time you read this I will have paid off my stupid credit card too.