Stupid, evil credit cards 3
14 June 2008 Jeff Gill
The credit card has to be sorted and not with little minimum payments that are half interest, so I took advantage of Barclays kind offer of a year of no interest on balance transfers. We now have three credit cards – imagine the trouble we could get ourselves into! But we won’t. We haven’t made a single credit card purchase since I posted this, and in 11 months (not twelve) we will be free of credit card debt.
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Money inspiration
28 May 2008 Jeff Gill
If you are struggling with debt and money and all that, please read this post by Paul Armstrong and this post by Sonya Armstrong. You are not alone, and there is a way out, even if it isn’t quick or easy.
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Sorted
28 May 2008 Jeff Gill
I’ve worked one evening a week for four weeks on keeping track of our finances. I’m caught up, and I have a simple system in place that will allow me to keep on top of our finances at a cost of about one hour per week. It’s taken a lot of work, but I feel more in control than I have in a long time.
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If it was amateurcrastination I would not have to take such extreme measures
6 May 2008 Jeff Gill
The credit cards are sitting unused in a Very Inconvenient Place, but we are not rich yet and the overspend hasn’t been paid off.
I blame it on the lack of a proper budget.
I’d like to blame the missing budget on Alistair Darling, but it’s my fault. Cha-Ching’s sexy factor is not enough motivation for me to sit down and sort out the money once a week, so I have resorted to this: Tuesday evening is now the Sacred Hour of Finance.
That is why tonight, even though I’m tired, even though I have a very busy week, even though I have a logo presentation on Thursday that is no where near done, I am sitting down tonight, as I will every Tuesday night, to Manage My Money.
What’s that you say? Is it possible that my writing this blog entry is a delay tactic?
Impudence!
Cheek!
Maybe just a small delay tactic.
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Stupid, evil credit cards 2
21 March 2008 Jeff Gill
I wrote before that our two iMacs were on a 12 MONTHS INTEREST-FREE ON BALANCE TRANSFERS credit card from MBNA. Those twelve months ended near the beginning of March. Because I am working hard on managing our money, I set a date two weeks before the 12 months ended, and I paid off the card on that date.
I was obviously not pleased then when I opened my latest statement to find that I have been charged enough interest to wipe out half the interest I earned by the smart thing I did.
When I called MBNA to ask them to clear up the obvious mistake they had made, I was informed that ‘12 months’ doesn’t actually mean 12 months. In my case it turns out that ‘12 months’ meant 11 months and two days.
I said to the call centre person, Doesn’t it seem little dishonest to offer me 12 months with no interest but only give me 11 months and two days? And they said, and I quote: Blah blah blah blah policy blah blah clearly stated blah blah blah nothing I can do blah blah get off of our free phone line, you worthless piece of lichen.
The moral of this story is that credit card companies (and, even more so, insurance companies but you knew that already) are Evil.
Always assume the headline is a lie.
Always read the fine print.
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Stupid, evil credit cards 1
21 March 2008 Jeff Gill
It starts with a little bit of overspending on Christmas. Not much. Not nearly as much as last year. Then it doesn’t all get paid off in January. Then you buy a couple things online and ‘we’ll pay off the card straight away.’ but you don’t and then the car needs fixed and we didn’t plan for that and a couple times you need petrol but you aren’t sure how much is in the current account because your record keeping hasn’t been so great so it goes on the card too and before you know it there’s your credit card with £700 on it. Dang.
It’s not a crisis. It will get paid off, but it didn’t have to happen. The thing is, you know it will happen again. WELL, NOT TO US. Our credit cards have now been put in a Very Inconvenient Place – we do have some self-control – and that is where they are staying.
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Cha-ching!
22 February 2008 Jeff Gill
One think that I haven’t really done so far in our quest for financial health is keeping track of how much we spend and where. That’s about to change. I hope. I have set up all my accounts in a little program called Cha-Ching, which promises a simple, fun and sexy way to manage your money. Let me tell you, nothing turns a woman on like the sight of her husband hunched over a laptop reconciling accounts. Yeah, right.
I will settle for a simple and tolerable way to manage my money. So far it looks promising.
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Cutting costs
16 February 2008 Jeff Gill
When we decided to get our finances under control (at about the same time we acquired our teenage daughter), one of the obvious things to do was to reduce our expenses. We did this in two places.
We changed telephone companies. We we paying BT about £70 a month for our telephone and internet access. We switched to Orange. Now we pay less than £30 a month for exactly the same thing. (Note: Don’t expect the savings to kick in quickly. BT took six weeks to finally let go of us.)
I changed karate schools. The dojo where I was training had started to feel more like a get the owner rich project and less like a martial arts school. (I blame the organisational structure, not my former sensei, for whom I have great respect.) As soon I got my black belt I started looking around for somewhere else to train. I found another dojo that teaches the same style, has an atmosphere that I prefer, and isn’t all about the money. It costs me £200 less per year!
Those two simple changes are saving us £700 this year without affecting our lavish lifestyle even slightly. There are probably some places where you could very easily cut your expenses too.
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A smart thing I did
6 February 2008 Jeff Gill
Some of the debts that we are repaying with the £8,000 loan that we took out are on interest-free terms until March (iMacs) and July (Christine’s camera).
Instead of paying them off in September when we got the loan, I put the money in a tax-free cash ISA (individual savings account) and a high-ish interest savings account. The interest won’t amount to a whole lot – less than two hundred pounds – but it will either give us a little more to spend or give us a seed for further savings.
(Yes, I know what the smart option is.)
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How we started climbing out of the mess
5 February 2008 Jeff Gill
If you are new to our ongoing money story, you can catch the first two episodes here. Enjoy!
In April 2007 our pastor (and successful business owner) Steve Houghton did a finance workshop for our church (short Sunday morning version here.) It was very good. In three hours Steve clearly laid out the exact steps that I needed to take to get things back on track.
Being the highly motivated and disciplined person I am, I almost completed the first step – tracking our finances for a month to find out exactly how much we were spending and on what.
Then I didn’t do anything until August and HMRC started getting tetchy. When they demanded that I give them a definite date (preferably yesterday) when I would pay the entire amount that I owed them or they would come and take away my car and my shiny iMacs, I found renewed motivation.
The only workable answer was a loan. I learned that from Steve.
In September about the cheapest you could buy money for was 6.1% – not bad. I couldn’t get that rate. I’m still technically an American, so I’m not on the electoral register. Also, my credit history, though good, is rather short. I didn’t do too bad though. I borrowed £8,000 at just over 9%, repaid over five years.
I paid back HMRC. I paid back the rest of the Tax Credit overpayment. And I reduced my monthly repayments on stuff to about £168, over £100 less per month than before. Hooray!
The most important thing that taking a five year loan did for was to help me finally discard the idea that there is a quick-fix to my money problems. I am now committed to a long-term, no-shortcuts journey to financial health and happiness.
That’s the backstory. From now on you are on the journey with me in nearly real time.
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Thou shalt consume!
23 January 2008 Jeff Gill
How hollow are western economies? President Bush and the American Congress are going to rush through emergency tax cuts for individuals and business. The numbers I’ve seen are rebates of about $800 for individuals and $1,600 for families.
The reason? The thing that will save the economy is people spending money. Here’s 800 bucks. Go buy some more crap to stuff into your house. We’re depending on you!
Encouraging people to buy more stuff may be good for the economy, but somehow it seems very bad for people. Am I the only one who thinks this?
UPDATE: I am not. A thousand times no is thinking this way, and cleverly.
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How we got into the mess
9 January 2008 Jeff Gill
This is part two in our money story. Part one is here. Feel free to add your own stories if you like.
In January 2007 through some marvellously big and unknown error in my design studio accounting I only set aside enough money to pay my VAT*, not my VAT and my income tax. Also in that month Christine and I went to work full time for our church. The financial transition went badly.
By spring I managed to get the VAT side of Her Majesty’s Revenue and Customs off my back, but the Income Tax side were getting a bit twitchy and generously adding interest to my bill. I owed them about four-and-a-half thousand pounds. I was dealing with it using my trusty method of Ignoring It And Hoping Something Would Come Along To Save Me. That method worked when I was self-employed. The next big job would always show up just in time. It’s not so good when one is on a fixed salary.
Tax wasn’t the only thing we owed HMRC. The Tax Credit people overpaid us by a lot, about three grand, thanks again to my accounting (lack of) skills. So we were giving that back at a rate of nearly £300 every month.
In September and December 2006 we acquired two shiny iMacs (20 and 24 inch versions. Mmmm!) They were meant to be paid for in cash, but the tax miscalculation in paragraph one prevented that. I put them onto a 0% interest credit card in January 2007.
The finishing touch came in June 2007 when the flawed shutter in Christine’s out-of-warranty camera stopped shuttering for good. In July we acquired a Nikon D200 in a buy-now-and-we’ll-take-your-children-in-a-year arrangement.
All together we had £7,700 of debt, no assets of any real value and a nearly-enough salary.
Then in August we the family grew. We were blessed with our wonderful 15 year-old daughter, and we discovered that teenagers are not cheap. About this time the kind folks at HMRC started becoming much less kind. Their letters were hinting strongly about The End Of The World As I Knew It.
*For those outside the EU, VAT is Value Added Tax. In the UK it is 17.5% on most things. Business owners are unpaid tax collectors for the government.
Don’t stop here! It’s too depressing. How we started climbing out of our mess is the next installment.
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Money: Intro
3 January 2008 Jeff Gill
This is the beginning of a series on the financial journey of the Gill family. I like stories about how people rise above difficult circumstances, but normally one hears or reads such stories after the fact when the protagonist is rich, the bad guys are dead or in jail, and all the struggle is condensed into a three-and-a-half minute song. I thought it might be nice and possibly helpful to do this one in real time with conversation along the way. So here I go. Let’s start with a slideshow about the finances of Britons I made for my church in February 2007.
When I put that slideshow together we were carrying just below the average amount of UK household debt and I was doing a very poor job of managing our finances. In my next money post I will tell the story of how we got to where we are. After that I plan to write about what we are doing to get out of our mess. Some time in the future this story should have a happy ending. I guess I’ll keep going till it does.
You are, of course, welcome to add your stories and ideas at any point.
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