The Coronavirus
Pandemic is a massive dose of reality for many people, including
myself. I've been very wasteful with my money over the years. As of
this moment I have nothing in savings, and this is partly because
interest rates have been so bad it makes more sense to pay off loans
first. That's another thing, because it's been so easy, I've borrowed
and borrowed and borrowed, like a total fool. This pandemic has
brought it home how important it is to have something in reserve for
the unexpected, and to never be in debt (excepting perhaps a
mortgage).
Q: Is Covid-19 going to
cause a great depression? How safe is your employment?
A: Who knows. Only time
will tell. F*ck it - what will be will be! If nothing's happened to
you yet, brace (be ready/prepare) for the worst! You'll survive.
The only good thing
I've done (with my finances) is overpay my mortgage. Now I realise, you always need to
have a battle chest to survive uncertain/unexpected times.
So, what am I doing?
As long as I'm not
laid-off soon, I should be able to build a battle chest. If I'm not
made redundant in the next 3 months, I think I might be okay.
After tax I earn around
£3500 a month. I'm very very lucky to earn this amount. But also,
the more you earn the more you tend to spend. My monthlies are close
to £3500 a month if I include money I spend on credit cards for
food, car insurance, entertainments, etc. Even forgetting my
credit cards, my expenses are £2600 a month.
My major expenses
include: £1000 mortgage, £500 for the wife, £500 for car finance
and car storage, £300 on a personal loan, and at least £300 other
stuff. Car finance costs me £340 a month.
What I have done so
far:
- From April, I will underpay my mortgages
by £750 a month.
- Will stop using car
storage and save £120 a month.
- Cancelled my life
insurance at a meagre £25 a month (I have no dependencies who live
with me, and if I was to die my estate should be good enough to
provide for my wife - I feel that needs must.)
Not a massive amount of
savings there (hard to reign in my finances too much), but nearly £900 per month reduced expenditure should allow me to save for that battle chest.
I'm lucky that I can
underpay my mortgage by £750 a month for 28 months if I so wish, for
now I've just enabled 8 months.
I must get out of debt.
I have a personal loan - which is currently £12200 and I repay £300 per
month - that I need to deal with first. Then there's the car finance - which is £340 per month for nearly 4 years with a £23000 balloon at
the end. Unfortunately I can't easily get out of the car finance (I
need to have paid 2/3 of the agreement before cancelling). All the
time I need to keep an eye on my interest-free credit card which is
interest-free no longer from July 2021.
Also, I will minimise
my expenses as best I can. I.e. no unnecessary expenses, sensible with the food bill, energy/resource efficient.
If it all goes
completely wrong (I lose my job and can't find something that pays
close to what I'm paid now), then I'll have to sell my daily car
(which isn't worth a massive amount), try and buy out the finance on
my dream car and then sell it (probably won't make much money from
doing that), and finally, sell my house (assuming house prices
haven't slumped like 50%) and everything in it.
Finger's crossed I'll
keep my job for a few months longer. Every day I'm still employed
I'll count myself very lucky. Every month I get paid a salary, I'll rejoice. Will never take employment/income for granted.
What will be will be.
If I'm made redundant, f*ck it, I'll survive (with my wife - we'll make
things work out.) Just get on with it, get motoring, get productive!
I like this phrase
"What will be will be - f*ck it! Get on with it!".
F*ck car finance!
F*ck personal loans!
Note: For a lot of
people, this world-changing event is going to make them think
seriously about their finances. The days of borrow, borrow, borrow
are gone. This is what's going to affect the world economy long-term,
a lack of consumer confidence, people being reluctant to spend, and
keen to save for if another pandemic comes. When this pandemic is
over - and it will be over one day - the memory is going to live on a
long time after.