Stiff and sore today

Was babysitting for some friends yesterday and after leaving there house in the evening was cycling into town to go to the pub quiz as usual on a Sunday. Wasn't half a kilometre from their house when I came a cropper cycling over some rough ground near a building site. It's just covered with a load of gravel and over the weeks since it's been there, the gravel is moving more and more out onto the path as people cycle and walk over it rather than walk the longer way round over the path. Exactly what I was doing I have to admit but I hadn't realised so much of the gravel had moved over the past week, since the last time I was there. I had just reached the path and was turning slightly to get round the corner when the wheels skidded on that loose gravel on the path and off I went.

Gave my head a bit of a bang (or at least, my helmet gave my head a bit of a bang - very glad I was wearing it) but the scariest part was that the wind was completely knocked out of me and it took me a few seconds to be able to breathe properly. I have a bad cut on my left hand and a very bad graze on my right arm, just below my elbow, as well as a few smaller cuts and grazes, not to mention bruising all up and down that arm. Couple of small bruises on my legs, too, but they're from the bike I think. I'm feeling very stiff and quite sore and generally very sorry for myself.

A few people stopped to help me and one man insisted on waiting with me until I had phoned my friends. That was nice of him. I think he could see that I was a bit more shocked and shaken than I realised. One of my friends came running up with a first-aid kit and then walked me back to their house, where they very nicely cleaned and disinfected and plastered my wounds. I was kind of okay until I rang them actually, but then hearing someone on the other end of the phone sounding concerned sort of made me fall apart a bit so by the time I got back to their house I wasn't even really capable of washing my hands and arm myself and was just sort of stupidly standing there holding out my arms. Luckily, since they have a kid, they took it all in stride and just took over and did everything. They even drove me home and will bring my bike back to me during the week. I remarked to my friend as she was dropping me home that it's not that I couldn't have managed to patch myself up, but it was very nice that someone else was there to do it for me.

Honestly, I had a similar kind of accident when I was 12: the first day I was allowed to cycle to school on my own, I got too close to the curb on the way home and off I went. And when I was doing my semester in Germany I remember borrowing a bike to cycle through the nearby woods and something coming loose from the bike so that the bike, that part (maybe the gear lever or the brake handle?) and me all went in different directions. Didn't get hurt that time though, as far as I remember. So, I haven't had too many accidents in my time. Although given that I also didn't cycle more than three or four time from the time I was about 20 until the year before last, I'm not sure that my record is actually as good as I think it is.

Oh well. I'm still a bit headachey but I also haven't taken any painkillers. Don't have any paracetemol and apparently, if there's a risk of concussion, you're not supposed to take ibuprofen or aspirin, both of which, of course, I do have. I don't think I have a concussion but better safe than sorry. Interestingly, I found out the German word for concussion and, if it was translated literally, it'd be "brain jolt" - what a great language German is. Does exactly what it says on the tin.

I meant to go and lie down this afternoon but by now it's just after seven o'clock so I think I'll just stick it out for another hour and then go to bed for the evening. I'm going to get up early and go to the doctor in the morning, just to get checked. I'm not exactly having difficulty breathing but I'm not really 100% normal either - don't think I broke any ribs but I may have bruised one, I suppose. There's not bruise on my right side but it's very, very tender to the touch. Then I'll have to find some time to stop into the opticians as my glasses also went flying went I banged my head and seemed to have acquired a couple of small scratches on the left lens. Time to find out if that insurance I bought is worth anything.

Despite all of that, I did head out this morning with friends as planned and we got the tram out to Kaiserswerth and then walked back. This is the same walk I did in January and it took me three hours then. This morning I used my mapmywalk app and discovered that what I thought was about 10km would actually be closer to 12 or 13. Unfortunately I don't know exactly because my battery ran out just before we hit the 10km mark. But, we got to 9.63km in 2 hours and 6 minutes so I definitely would have been home in less than three hours. Haven't managed to do enough to improve my time back down to two hours but will be really happy to do the mini-marathon next week in less than two and a half if I can.

Marriage equality referendum

Today my home country is out to vote in two referendums - one on whether to reduce the minimum age of presidential nominees from 35 to 21 and the other, for many more important, on whether or not to extend civil marriage to same-sex couples. Since I don't live in Ireland anymore, I don't have a vote, as voting rights depend on you being resident in Ireland. However, what I hadn't known before today is that if you've left the country less than 18 months ago and do intend to return to live there, you may still vote. There is no postal voting allowed in that case so if that applies to you and you want to exercise your vote, you need to turn up in person at your polling station. 

You might have heard about the #hometovote hashtag today - it seems to be making its mark all over the world today. And some of the stories are truly uplifting. Above all, it is somehow making me feel a bit like my faith in humanity has been restored, seeing crowds of people making their way back by train, plane and automobile. It would perhaps be silly to assume that everyone is going home to vote yes but certainly the majority taking the time and trouble to get back to vote do seem to be supporting the yes vote. As do I. 

There's just less than an hour of voting time left now and we should know the results by about lunchtime tomorrow. I sincerely hope that this change to the constitution goes through. Am feeling very emotional watching all of this happening from such a distance but isn't it wonderful that the internet allows me to be so close to everything that's happening. It gives me hope, too, that Ireland may be finally starting to really come out from under the yoke of the Catholic and indeed any Church. It's time for a separation of church and state once and for all. 

And, just for laughs, check out the #PollingBoothPickUpLines that people started posting earlier. Some hilarious and some just as terrible as pick-up lines usually are!

Net worth - May 2015

I'm not sure what made me think of checking this. Perhaps because I'm on the cusp of opening an investment account to save a small but regular amount into. Have received all the paperwork, just need to open the envelopes, log-in and get it sorted. So as soon as I have an hour to concentrate at the weekend, I'll be doing that. At any rate, here's how things stand with my current pensions/investments since the last time. Still all very unexact in terms of percentages but still generally all going up, so that's good. I'm mystified by the fact, though, that some of the percentages given below are different from the ones showing for last February in my spreadsheet. The values in my spreadsheet are lower in each case so I assume I found an error and fixed it.

Increase in net worth overall: 8.92% 15.94%
Made up of:
Irish Pension: +7.38%
Irish Retirement Bond: +18.96%
German Riesterrente: +12.94% 
German BAV: +50% (haven't received a statement yet so the increase here is only the payments I've made and doesn't include fees I'll have to pay or any gains made)
Vodafone shares: +9.77% 

And all of the above is getting very close (just over €100 short) of €32,000. I realise that I should now be including my loan in the calculation of my net worth, but since my tax return along with my savings amounts to nearly the same amount as the loan, I'm not going to bother.

Edited on 12th June 2015 as I received a notification from New Ireland with details of a change in investment strategy which also included the value of my retirement bond. As the value shown was coincidentally from 19th May (only two days before I checked all of the others), I've just added it here. Have reflected this additional amount in the overall increase and I'm now less than €100 short of a grand total of €34,000. So that's nice. 

This and that

• A few weeks ago, partially because I've been meaning to for years and partially because I'm trying to forestall any potential issues when I quit my job soon, I took out a legal insurance. These are fairly common here and the peace of mind I have had ever since I sent off the paperwork has actually surprised me. I took out a policy that has a 250 euro deductible and will probably change it in a couple of years to a different option which has a higher deductible (400) which reduces over a number of years if no claims are made. I wanted the fixed, lower deductible for the first while just in case I do end up having any issues around leaving work. It's probably not likely but I prefer to err on the side of caution.
• I knew the bill for that insurance would be coming in (224 euro for the year) and put the money aside in my savings account. When it actually arrived, I simply paid it out of my current account and thought I could simply move the money from my savings account over to the current account. So far, though, I've been sitting on doing that. Currently, I have enough money left in my current account to cover the rest of the bills due this month plus about 10 euro. If I cancel my plan to start an investment savings account until next month I have 60 euro. This should be doable but only if I am very careful to bring lunches to work every day and so on. We'll see. If it's not working out, I can simply transfer the money from my savings account and use that. So, no need to stress or start spending money just because I can't.
• I'm nearly finished my first proof-reading job. It has taken longer than I anticipated but I am trying to be extremely careful (and it's an incredibly boring topic, for me anyway) and do a good job. I need to make it to the bank next week to open a separate account so that I can keep this and any other money from side-gigs separate. I also need to check with the tax office to make sure I do anything I'm required to do from their point of view. As my income from this kind of thing won't be very high, I should need to get a VAT number or anything but better to be informed in advance.
• I cut my own hair for the second time this week. The ponytail method still isn't the best for my hair but honestly, it's good enough for now. If I ever find the time and inclination I might try some of the curly hair options I find online but until then, it's great to not be thinking I'll need to fork out fifty euro or so shortly for a haircut.
• I'm headed to Dublin at the beginning of June and will be walking the Dublin Women's Mini-Marathon (10km). I did almost no walking last week but am planning a long cycle tomorrow morning and then back to full speed on the training plan from Monday. 
• I've been having a gynaecological issue (ovarian cyst) and after observing for a few months with no changes one way or the other the doctor finally decided to try a treatment and so for the last two weeks I've been taking hormone tablets (similar to the Pill but with just one specific hormone). Since this problem started I've been having issues with mood swings anyway but now I'm spotty, too. And unbelievably bloated. I hate hormones and am glad there's only one day left. Hopefully everything will start working properly again after all that.
• Plus side: free ultrasound this year, since it's been needed for medical reasons rather than just as an extra preventative measure.
• Less plus side: must remember to only schedule internal ultrasounds for later in the day in future 'cos those things get cold overnight and yelping followed by a fit of the giggles is not really the way to behave when the doctor is probing your insides. 
• I finished reading Quiet last week and have so many pages marked to go back to I might as well just read the whole thing all over again. But I need to finish In the Name of the Rose first, which I have been reading on my Kindle for months. Cycling to work almost every day means I lose that few minutes of time every day that I used to use for reading.
• My Kindle has started to give up the ghost and keeps rebooting itself. Need to dig out the extended insurance policy and see if I'm still within the term. 
• I was randomly selected to take part in a long-term health study and have agreed to participate. It sounds interesting. My first appointment should be in a few weeks and will involve about six hours of interviews and filling out questionnaires, blood samples being taken and so on. Then, every two or three years for the next thirty years (or until I die), I'll be sent follow-up questionnaires. 
• I really want to buy some crisps and chocolate but I'm still in my pyjamas and really don't want to have to get washed and dressed and go outside. I'm trying to decide if I have the energy to bake something. It's that kind of a day.

It rained

And then it stopped. Thankfully it was one of those clears the air rains and now it's nice and cool after a very muggy day. And a couple of hours later, the same patch of sky on leaving the building looks totally different.

posted from Bloggeroid

I think it's about to rain

Hoping this will have passed over by the time I leave work in about 90 minutes.

posted from Bloggeroid

Overspending and debt - update posts

A little over a year and a half after first posting my attempt at explaining how overspending by a small amount on a regular basis spiralled into a large amount of debt on askaboutmoney I went back to give an update. Not two weeks later, life was turned upside down when my sister died. I'm including those posts here now for the sake of completeness. Long-time readers will already be familiar with a lot of this, I suppose.

Posted on 6 September 2013

And here's another update just in case anyone is interested. In February last year I was all set to be debt free by about May. I also gave in to my sister's prompting/complaining (that none of her family bothered to visit when her husband's family had done so multiple times) to organise a trip to Australia to see her. I booked a ticket because with debt gone by summer I'd have plenty of time, not to mention an expected bonus at the end of November, to save and pay for my December holiday, wouldn't I? With the way the bank holidays fell last year, it was the optimal time to do it as just over three weeks holidays would get me just over four weeks off (bank holidays in Germany don't automatically transfer to Mondays, so on years where christmas falls on a weekend, you don't get any time off). 

Then, at the beginning of April my uncle (and godfather) died unexpectedly. Two aunts had died the year before and although I had contemplated going home for the funerals I knew it was just too expensive, difficult to arrange time off work and didn't do it. This uncle was, however, a different case and I didn't care how much it was going to cost, I just wanted to be there. So between flights, a hotel for one night (stayed with friends the other), buses and taxis as well as meals etc., I was close to 700 down. Somewhat upset about the loss as well as the financial setback but determined that a couple more months wasn't going to throw me off stride.

Four days later I got a text that my brother-in-law, who I was very close to, had died unexpectedly. This death hit me very hard. And again, I had short-notice flights, hotels, meals, transport - another 700 or so down. 

If I had had an emergency fund in place, most of that cost could have been covered - Dave Ramsey recommends that the first thing to do when trying to get out of debt is to save 1,000 in an emergency fund. I never quite got the logic behind saving that much when you have debt to pay off but it certainly would have made a difference to me last year.

I had already had a long weekend home booked for the end of April, so a couple of weeks later I was back in Ireland but my planned very limited budget was blown out of the water. There was far more meeting up with family groups, eating out and just general spending than had originally been planned. I just didn't care and it took me a month or so to get back on track with properly managing my money and getting back to focusing on paying off my debt. I went through a very bad period of depression during 2009 and 2010 and had only really started to come out of it properly when all this happened so I was struggling with that as well.

I spent a lot of time thinking that I should just cancel my trip to Australia but in the end decided not to. It was the first time in sixteen years that I was going to have longer than two weeks off work and getting some sun in winter also seemed like it would be more advantageous than being in debt a while longer would be disadvantageous. To a certain extent, I just didn't care anymore either. I think that is a very real danger when you're in debt: it seems neverending and so you cease to care whether your actions are contributing to the neverending or not. I know that has definitely set me back more than once.

So, debt repayment slowed to crawl (more than minimum payments but not much more) while I prioritised paying for my ticket to Australia. My spending money was mostly provided for by virtue of the bonus I was paid in November, just before I left although I did find Australia far more expensive than expected and used my credit card a few times also. I also managed to catch the worst cold I've had for a long time so although I had a good holiday and it was great to have a bit of sun (especially given how long and miserable our winter was this year), spending the last week snuffling and then another couple of weeks missing work did put a bit of a damper on things. My depression was finally properly lifting though and although this seems to be my year for being sick (that cold, 2 serious bouts of bronchitis, 1 episode of contact dermatitis and 1 not very pleasant week of stomach bug so far), I am feeling positive and focused and have kept going with paying down my debt. 

My hopefully final setback came in March when a close family member asked for help in clearing ESB arrears as they were about to be cut off. Arrears turned out to be over 1,000 and although many would say I'm a fool for doing it, I paid. I don't expect to get the money back, certainly not any time soon, but at least I was able to make sure appointments with MABS were set up and proper budgets put in place etc. It's not the first time I have helped this person and probably won't be the last but I'm hoping this time was a serious enough wake-up call that they'll get their act together and what I have seen since has done nothing to diminish that hope. I'm not by any means advocating that people use credit to help their families out - everyone should really be responsible for their own financial issues - but in this case, I know I will always do anything I can to help. There are a myriad of reasons and a complicated background so although in general I would be among the first to advise people to be extremely careful in helping family out, and especially would always advise against going into debt to do so, it's one of those situations where I'll never take my own advice and more fool me for it.

So, as things stand, more than a year after I expected to be debt-free, I'm still not. For reasons that many will consider ridiculous and unnecessary but mostly I'm writing this not for those who will think that, but for those who do equally ridiculous and unnecessary things. If even one person, seeing it all laid out in black and white, can relate any of this back to their own behaviour and see where they're going wrong, then laying out my own folly for the world to see is worth it. And I think one of the most important things to remember is that life happens, everyone has their own "damage", their own issues to deal with - doing so, even if it means not always doing what you know is the sensible thing, is fine so long as you don't lose sight of the goal and make sure to get back on track as soon as possible.

In the meantime, I have gotten much better at trying to build up savings so that this year, I fairly consistently managed to maintain a small balance at all times. This was wiped out in August when all of my normal annual bills fell due and what has surprised me and shown me how far I have come, is how uncomfortable I felt for the month of August until I was able to make another deposit into my savings account at the end of the month. Although those expenses were expected and the money had been saved to pay for them, not having that 500 euro always sitting there really, really disturbed me. I'm going to hold on to that feeling and remember it every time in the future that it seems like a good idea to dip into savings for something I don't really need (as has happened too often in the past). 

Hopefully, I will be back in another couple of months with a "debt-free, yippee" post rather than another catalogue of misery!

Posted on 14 September 2013 (the day after my sister died)

I'm over the initial shock and just concentrating on the practicalities now. Am doing my best to keep the costs to what I can pay back immediately when I get paid at the end of the month (and since Avant are raising their interest rates I have absolutely no desire to let this become debt that drags on - I am deliberately putting stuff on that card and will clear it in full straightaway while just making minimum payments on the already existing debt for next month). So far I've booked a one-way flight (don't actually know when funeral will be so it was just easier to get one-way and I'll book the return when I know, probably for Saturday) at a cost of 213, car hire for 155, hotel for the night I arrive 49. A very generous friend has offered to let me stay with her in Inchicore so I'll need the car for getting over to Killiney and ferrying who/whatever needs ferrying while I'm there. Assuming another 200 or so for the return flight and petrol and eating costs if I'm careful it shouldn't go too much above 800. I think I'm kind of hoping that saying that out loud, so to speak, will help me to stick to it.

Posted on 24 September 2013

Hahahahaha. Do we have a "you're so funny" emoticon? Obviously not having had a car for the last few years has distorted my memory of how bloody expensive the things are! Just my return flight was nearly 200 and I spent what felt like a fortune on petrol (when on earth did things get to the stage that a Corsa needs 70 quid to fill it up even when it wasn't even three-quarters empty?), not to mention M50 tolls. Okay, I could have driven other ways but the convenience far outweighed every other consideration given the circumstances. 
Final tally on my credit card was a bit more than 750 but I also ended up spending nearly 400 in cash (perhaps half of which could have been avoided, I suppose) and mobile phone top-ups (from my already overdrawn BoI account). However, I decided that clearing my "new" debt immediately would leave me feeling more like I have stood still than anything else and so have changed my mind on how to tackle this.

I got paid early this month, i.e. yesterday so what I've done is to clear my Mastercard (which was what I used to help someone out with their ESB bill earlier this year). I made a slightly more than minimum payment to my visa and the same to the overdrawn BoI account - firstly to just have paid something but mostly also to round the numbers off. Am I the only person who does that? 

Next month I will clear the visa so that I am left with just one debt. And then we'll see. I had been toying with the idea of a week's holiday somewhere cheap but sunny at christmas and am still torn about that. There's no doubt that I really can't afford it, which should be the end of that thinking. And yet I have a feeling that anything that will help me get through this winter would be a good thing (timing of christmas is because of mandatory two-week holiday from work). At the moment, I'm leaning towards debt-free being a better feeling than Malta in December but am not making any decisions. If I end up clearing my debt in November/December/January it would be great. I might decide that waiting until January/February/March doesn't make that much difference though. A lot might even depend on what kind of winter we start having - snowy and bright or grey and drizzly, big difference between the two. And if the dentist's appointment I have in two weeks brings expensive news then all bets will be off anyway. [In case anyone is wondering, I didn't go away for a sun holiday that christmas]

Sorry to be boring on about this now but it's helping me work things out and keep my focus so I'm just going to go with boring ye all for now. 

And let's focus on the positive - the visa card has gone back in the drawer and won't be coming out again unless there's another emergency. A few years ago I would have kept spending for another few months before coming back to my senses!

Posted on 25 September 2013

"... the visa card has gone back in the drawer and won't be coming out again unless there's another emergency"

I should know better than to express a thought like that. After all, some people do call their emergency fund their "Murphy" fund. I had just logged on to check that the payment had gone through on the Mastercard and to enjoy the sight of a zero balance and my glasses fell off. Perfect. Is that ironic? Never sure ever since that Alannis Morrisette song.

It's not a very serious break and might be reparable and/or I can search out my old glasses and use them for a while but I was actually at the eye doctor less than two weeks ago and found out that my prescription, after about 20 years, has changed. I was going to wait until the new year to get them (if I've been wearing the wrong ones for a while now another couple of months won't matter) but maybe this is just a sign from the universe to get it sorted now. Le big sigh.

And finally, posted on 25 October 2013

Right then, another payday, another few fleeting seconds of feeling "rich" before all the money gets sent off somewhere else again. 

Have just put through the payment to clear my visa. I also made a payment to my mastercard, which will leave it in credit to the tune of 100 euro. I may travel to Frankfurt at the end of the month (costs around 80) so that money is there if I do and if not, will sit there earning me interest. It's a German mastercard and they work slightly differently here and on my particular card interest is charged from the day of spending, regardless of whether you clear the full balance or not at the end of the month. However, since I can earn interest (at ECB less 0.5% I think it is), even if it's just a small amount, it makes more sense to put the money straight onto the card rather than leaving it in my current account where it earns nothing. [This has changed in the meantime so no more interest earned for maintaining a positive balance]

So, that just leaves me with the overdraft on my BoI account, which currently stands at just about 2,500. 

I did get glasses and managed to keep the cost of that to 95 euro so not too bad. I'm definitely not going away anywhere sunny at christmas but have arranged to house-sit for a friend in Frankfurt over New Year's so will get a bit of a quiet break anyway.

At the moment I plan to clear an small amount of the overdraft in December and otherwise try and enjoy the festive season. I already have a long weekend in Dublin booked for the beginning of the month (around my birthday) but almost everything has already been paid for months ago (flights, hotel, 2 x NCH concerts and a friend is treating me to a flotation session) so I'm going to go ahead with that. Main object is actually to go to the Arts and Crafts fair in the RDS - I've been saving change in a sealed pot all year and am taking whatever is in that to buy myself something nice. The bulk of the overdraft would normally then be cleared by the end of January. 

Unfortunately when I went to the dentist a couple of weeks ago for a check-up I found out that I had a huge cavity underneath an already large filling. So was back to the dentist a couple of days ago and he drilled it all out and tidied it up and put in a disinfectant type temporary filling. He wants to leave it now for a month or so and then he will check if the roots are still alive (they certainly hurt like the devil the last couple of days! Never had electric shock-type toothache before). He thought there was a very good chance that I wouldn't need a root canal but it depends on how it reacts/heals over the next few weeks. At the very least, I'll need a partial crown. Worst case scenario will be a root canal and full crown, I think. I do have a supplementary dental insurance but am only in the third year of it so only get a limited amount paid out. Will have to wait and see what happens in December, how much the estimate is, how much the health insurance will pay, how much the supplementary insurance will pay and then how much I'll have to fork over myself. A few hundred at least, I assume. So it may be the end of February (barring any other emergencies) before I actually clear the overdraft. [I'm too lazy to go back and look now but I didn't need a root canal and ended up getting a partial crown. A couple of months ago I had to get yet another partial crown and also an inlay. So very happy to have had the supplementary dental insurance to cover some, most actually, of these costs. Having to just cover a couple of hundred instead of in the thousands is a huge help. Once I get to the beginning of 2016, I'll have been paying that insurance for five years and the full amount of coverage will kick in (which is between 85% and 95% of most things) so just need to try and make it to the end of this year without needing any more major work as I have used up every allowance available already. One day I'll sit down and work out exactly how much I've gotten out compared to how much I've paid in and how much I've had to pay in costs myself]

Overspending and debt - follow-up posts

In reply to the askaboutmoney thread I started a few years ago on my debt story, one person posited that the lenders must bear some responsibility. This was my response:

Posted on 24 February 2012:

At that rate you could argue that my parents or my school are responsible for not teaching me how to budget properly. My dad died a couple of years before all this started and he would have been horrified if he had ever known. Neither a borrower nor a lender be and all that - yet that never made it as far as lessons in how to actually manage things. On a side note I have to admit I was tremendously impressed when doing Hamlet for the Leaving to realise that my dad had been quoting Shakespeare all those years.

It's good that banks can no longer up the limit on a credit card just because. But otherwise, well, I'm the one who kept spending the money. I did need someone to teach me the error of my ways, so to speak, but don't think anyone can really be held responsible for that task. One of my older sisters often says that if she hadn't met her husband, who's very good with money, then she'd have been the same as me.

And even when I did get some advice I didn't always feel it was relevant to me. For example, the first few years of my working life I worked for American companies in Dublin (call centre boom victim here  ) and I remember once we were sent around a newsletter type thing with tips on how to manage finances, which included a tip that you should always have six months worth of salary in an emergency fund in case you lose your job. That just struck me as totally irrelevant and a bit 'American' (oh the innocence of me back then!). I couldn't imagine ever being out of work, despite growing up amid the multiple redundancies of the late 70's and 80's. And six month's salary seemed like such a hugely unrealistic amount to need for anything. Things look different in your early twenties.

And for the lenders, well, they were doing what they are in business to do. Making money. And they have made a lot of money out of me. I've always repaid what I owe on time (or early, in the case of loans that got consolidated into other debt) so, for celtic tiger Ireland at least, I was an ideal customer for them.

Posted 29 February 2012 (partial reply to another question but an important point for this story)

Perhaps you should think about making sure that you have enough money to cover your expenses and then make a smaller payment to your credit card instead of putting all your money on the card and then needing to use your card to pay for things during the month. Because it's very easy to, for example, got to the supermarket and say to yourself, well I'm using the card anyway so I might as well stock up on x, y, or z that's on special offer. If you only have twenty euro in your wallet you might be less inclined to spend more of it than absolutely necessary. 

How overspending by a small amount on a regular basis spiralled into serious debt

I first posted this on the excellent Irish financial website, askaboutmoney. In case anyone is curious, my username over there is Janet, and no, that isn't my real name. I was mostly using Misty Moon or Moonwaves for my online presence when I first joined AAM but felt that since it was a "serious" website, I should have a "proper" name. So I plucked one out of thin air, more or less, and decided it might be fun to see what other side of my personality I might discover hiding in a "Janet". :-)

Posted on 24 February 2012:

On another thread someone asked:

How could it possibly take 11 years to pay off that level of debt?

in response to my post saying 

About two years of being careless when I was younger led to eleven years of debt (and I'm not talking about having gone wild buying designer gear every week, more like spending an extra fifty quid in the supermarket every few weeks).

Since my answer became somewhat long, I decided to split it into this new topic in order to not let that thread get too off-topic. Hope that's okay with everyone.

It's actually very easy. And obviously that's something of an oversimplification but it went something like this: starts off with just a few hundred on a credit card (being 'sensible' when I first got a credit card I set the limit at 500 pounds, which was about what I earned per fortnightly paycheck at that time) because you haven't really figured out the whole budgeting thing yet and since everyone is throwing money around like mad you must surely be able to at least go to the supermarket without having to worry about what anything costs. But then you can't pay it off so just make the minimum payments for a while and then the bank ups your limit (they were still allowed to do that at that time) and you think great, pressure is off. But you still can't/don't pay off the balance and over time it creeps up more and more. 

So you think well, I'll get a loan to pay it off ('cos interest is lower and that's what 'sensible' people do but unlike said sensible people you don't chop up the card). So now you're paying a loan with payments that are too high but instead of doing a proper budget and cutting down on expenditure you're finding yourself using the credit card to buy all your groceries. No money left over at all for things like clothes so although you only buy them when absolutely necessary, you end up doing something like going shopping as soon as you get paid just so you can buy a new suit for a job interview and between that and making a loan repayment and making a maybe slightly more than minimum payment on the credit card as well as potentially having cleared any overdraft you might have run up on your current account, there's not a whole lot left over for the rest of the month. So credit card and overdraft come into play again. And then after a year or so of that you decide to consolidate your debts because that's what sensible people do. 

So you get a big loan to cover remaining loan balance, credit card and overdraft and the bank says well why don't we round it up to [nearest thousand] so you have a bit of leeway and a chance to sort yourself out. So you do that, maybe go away for a week to relax but still don't cut up the credit card or cancel the overdraft facility and for a while everything's going according to plan but then you have to move house unexpectedly so there's the cost of deposit, double rent because you have to start paying for the new place before you've finished paying for the old one, hiring a van and buying a fridge because you've moved into an unfurnished place (with second hand furniture donated by a family member). So all of a sudden there's a couple of hundred on the credit card again. But your loan repayments are taking all your spare cash so now that you're also trying to pay off a credit card again you're struggling every month and end up dragging out the card or using the overdraft to pay for a bit here and a bit there. And you feel like you're constantly paying off debt but never getting anywhere. Don't forget that all the time interest is building up as well.

And then you decide it's all getting too stressful and it would be just better to get a bigger loan and have one payment so you again go to your nice helpful bank and consolidate your debts, again taking the slightly more than you need that's offered because it'll take the pressure off. And this time the loan is to be paid off over three years. And things go well for a while. But then something else happens and because you have no savings and the loan repayments are taking up most of your spare cash (because you still haven't quite gotten the budgeting thing down, although you're trying a bit at least) it's back to using your money as soon as you get paid and then having to use credit card and overdraft (neither of which have been cancelled) to pay for the basics. 

So it was perhaps two years of careless spending, followed by three or four of trying to get out of debt but not really having a clue, still doing silly things and sort of thinking that it wasn't a big deal anyway because sure everyone else you know is in the same boat. And now six years of properly dealing with my debt and getting a handle on finances (but still by no means perfect).

When I finally started to really get a handle on finances it was because I was also in a terrible job situation and badly depressed and decided, many years overdue, to go for counselling. That cost 70 euro per session and I needed to make sure I had the money every week - that was for the first few months, after that I changed to a different job with lower pay and could only go every second week but the key difference was that I knew that and made changes to what I was doing with my money based on what I was earning rather than trying to carry on doing the same things with less money. I had been using an excel spreadsheet to 'manage' my budget since the laser card had been introduced as I had ended up in trouble a few times because of transactions not appearing for a few days and me forgetting about them. But it was a really eye-opener to sit down and start properly managing my money. My previous model had relied on checking my bank account to make sure there was enough money in it whenever a standing order was due to come out and hoping bills wouldn't be too high to pay when I receive them. Now I actually wrote down what my fixed expenses were, including things like rent, bus ticket, an amount for phone and esb and the 70 a week for counselling. And realised that once I'd done all that plus left a bit for making some payments to debt, I only really had, say fifty euro a week leftover to spend on everything else (food, going out, presents, clothes). Plenty to live on perhaps but if you're eating lunch out every day, you'd have already spent more than that, even if it's just a sandwich, packet of crisps and bottle of water. It took me a while but I finally got to the point where I consolidated for a final time and took out a loan for what was by then a very large amount of money, fixed rate this time and no delusions that I would pay it off earlier than the five year term. I never did cut up the credit card but reduced the limit to a small amount and paid it off in full every month. 

All went well, and I even managed to finance a move to Germany. Unfortunately four thousand euro worth of dental work has left me a year behind with being debt free. My loan was cleared late last year and I expect to have cleared the final debt from the dental work by May. 

And that is how spending a small amount more than you earn every week can spiral into more debt than you would have thought possible. A bit of carelessness, a pinch of stupid behaviour, a touch of depression, (not to mention a fervent desire, regardless of how irrational, that the millennium bug will wipe it all out) and, it must be admitted, a smidge of what can only be called an unjustified sense of entitlement (every else goes out to eat every week so I will too, etc.) and all of a sudden the girl who at fourteen was earning five pounds a week working for the family business and still always had money to loan her elder siblings is the one up to her eyes in debt.


Edited to add: Link to follow-up post 1
Edited to add: Link to follow-up post 2

Finances

Just over a year ago I posted that I was debt-free but broke. I should have known that pushing myself to clear the overdraft was a recipe for disaster and I've been struggling ever since but not wanting to admit to myself that it was anything other than a temporary slip-up. After a year, I don't think temporary is still acceptable though. By the end of June last year, my overdraft was nearly back up to where it had been at the end of April. I helped my brother out with some bills and then, in June, went to a wedding. Flights and hotel and car were paid for in advance but I went on a bit of a spending spree while I was there, buying new shoes and trousers and handbags (yes, handbags, two of them and I'm not much of a handbag person), using the debit card attached to my Irish bank account to the tune of nearly 300 euro. Add to that the cash that I managed to fritter away in those five days and, if I'm perfectly honest, for the next month or so, and it slipped right back up to where it was very quickly. 

A couple of weeks ago I did the sensible thing and took out a loan for 2,000 euro to fully clear that overdraft once and for all. I'll be paying it back over the course of 12 months at a fraction of the interest I was paying on the overdraft and I'll be making sure to not use that account unless there is actually money in it. I know the really sensible thing to do would be to cancel the overdraft limit on that account immediately but I'm feeling too nervous about money at the moment and will settle for making sure I don't bring the card out and about with me for now. I will however, phone the bank next week and reduce the overdraft facility amount to 2,000 (currently it's 3,000). My loan repayments are a bit less than 200 per month, which leaves me able to concentrate on saving for a change. As soon as I hit 2,000, I will cancel the overdraft facility for good.

My next couple of posts are going to be simple copies of posts I made to a financial website when someone questioned how simply overspending by a small amount managed to spiral into a significant debt that it took me over eleven years to pay off. Granted I do have plenty of psychological issues that come into play but I think my own story will be not all that unfamiliar to many who are struggling with debt. Given the fact that I continue to struggle, even when I know exactly what I'm doing wrong, even though I'm not unintelligent, I hope it might even help to shed a little light onto this type of foolish behaviour for those who just find it entirely beyond their ken.

Quiet

Today is a bank holiday here and, more or less as planned, I'm having a duvet day. Actually, I planned a reading day and if the weather was fine was going to take a picnic to the park and spend the day there reading. The sun was out in force this morning and yet I couldn't bring myself to get enthusiastic about the idea of going out at all. And so a duvet day it is. I slept until nearly half-ten and haven't gotten out of bed for more than a few minutes to grab some cereal a while ago when I started to get hungry. And now to write this. After which, I'll retreat back to the horizontal and snuggle up to my book again in my duvet cocoon.

The book that has captured my attention is Quiet: The Power of Introverts in a World That Can't Stop Talking by Susan Cain. I can't remember exactly where, how or when I first heard about this book but I do remember that when a friend wrote a book review of it a couple of years ago thinking to myself, "Oh yeah, I wanted to read that, too". We all know it takes me a long time to get around to doing anything but in March I finally ordered the book and on the day it arrived, I'd read the first ten pages or so within a few minutes. Unfortunately, I was just about to leave the house for an important choir rehearsal and I had to drag myself away from it. I was kind of glad about that, though, as even the first ten pages had already succeeded in bringing a tear or three to my eye. Suffice to say that I decided I wouldn't pick it up again until things had quietened down a bit and I had a chance to go through it in peace and quiet. See, there's that word again: quiet.

And today is the day. Actually, I started during the week, partially as a way to try to start unwinding after a particularly strenuous weekend that saw me out and about and on the go all weekend. Not at all an introvert kind of a weekend. Which is why I decided that this long weekend was going to involve seeing as few people as possible. I need to recover.

I'm not even halfway through the book by now and it is bringing up some very powerful feelings for me. I have marked numerous pages that I want to go back and read again/think about some more. And I have had several moments of feeling like I have almost reached the point of unlocking some of the mystery of why I am the way I am sometimes. I have a feeling that discussions of introversion and extroversion are going to be coming up in my next therapy sessions.

So here I am, introvert, shy, highly sensitive (apparently these are indeed all separate things) and feeling such a sense of relief that these are all real things and I'm not crazy for being the way I am. Much like I felt when I first discovered the world of gentle/simple living and frugality blogs and realised that not only was I not alone in my "craziness", I was a very long way behind hundred and thousands of other people in the world. It's quite a feeling.