Like plenty of families in this day and age, we are no strangers to the irritating habit money has of going out faster than it comes in. With 5 children to buy for – and an increasingly aging car that is beginning to require hospitalisation for things like “a stuck sensor… that will be £600, thank you very much” there is sadly never a month where we get to the end of it and think “hmmm…. what shall we do with this left over clinking stuff?” – it tends to be more of a case of juggling payments to try and make sure that nothing bounces and no one goes hungry.
We’ve also had our brush with debt in the past, a long time ago when you could buy a house for £30,000; after a miserable few years where costs racked up too fast, we sold up and started afresh, vowing never to let it happen again. It has at times, but we’ve learned a valuable set of lessons in recent years, one of which is to not imagine that a minus number in an account or on a credit card will magically disappear on its own. There is no fairy to spirit debts away and they tend to get larger with time too, which isn’t pretty.
Santander asked me to blog about how we cover ourselves “in case of emergency” and what that phrase means to us. I’ve been thinking about it over the weekend, mulling over the times when the credit card has bailed up out of a tight spot.
- There was the time when Max left work to help me with running an increasingly huge business and 4 young home educated children. Max has a real horror of debt (far worse than mine, I grew up with it being part of the fun 😉 ) but life was getting very difficult and everything was on the line. I remember thinking that we truly must be gripping the wires when he said that if it meant living off credit cards for a while, that was what we would do. I don’t think I realised until that moment how much things needed to change but we took the risk and thankfully, within a few months, it worked to our benefit. As a short term safety net it was worth it.
- There have been the inevitable moments when the car has broken down towards the end of the month and there simply hasn’t been any extra in the bank accounts. We can’t even get people to school without a car so when that happen, the car has to be resuscitated. Occasionally, just occasionally, that’s a moment to call out the cards.
- Those dreadful moments in life when suddenly the last thing you need to think about is balancing the books and only keeping body and soul together – and food on the table and fuel in the car – really matter. Proper emergencies. Unfortunately we’ve had them and been truly glad to have a fall back.
Sometimes, because life can be busy and difficult to manage but the problem is more lack of time than lack of money, I use a credit card to keep track of what I’m doing and tot up properly at the end of the month. Christmas (in a large family) probably constitutes a major emergency because I’m utterly incapable of planning for it, despite knowing it comes around every year. So I make sure I start at zero and spend as wisely as I can to keep within a set budget; that saves me from losing sight of my spending in among household purchases and over-doing it. I am really good at paying it off. It’s important. (No tooth fairy for bills, remember? If you forgot, visit this site for support.) I have a rule here that I have no pin number for my credit card so I can’t get shop happy with it and can only be used when I absolutely HAVE to pay something serious – at home, online or over the phone and when I have considered the options.
In the last month (I’m sensing a ‘fail to plan’ theme here!) I’ve had more than a few minor emergencies.
- Everyone needed new school shoes – the rotters!
- Everyone turned their school shirts grey or inexplicably grew!
- Fran achieved more GCSE A’s than expected, meaning I’m taking her to the West End for a treat I hadn’t thought I would need to plan ahead for. (I’m not moaning about this but OUCH! at ticket costs!)
- Amelie’s school want money for a trip to War Horse for English.
- Maddy’s school want money for a trip to the ballet for Drama.
- Bene has outgrown EVERYTHING.
- The car. The sensor. We aren’t speaking.
- Fran’s school like them all to have a dedicated school ipad. *And breathe*
- New gym leotards for everyone. Did I mention the growing thing?
And then, occasionally, because nothing should be humdrum all the time, I have an accident in a yarn shop. What do you mean I didn’t really need any more yarn? It was an emergency!
Serious issue or ‘let’s pretend that didn’t happen!’ extravagance you couldn’t live without… what comes under the “in case of emergency’ heading in your household?When it comes to finances, what counts as an emergency to you? Have you got ways of short term money management? What are your credit card rules?
Disclosure: This post is in collaboration with Santander and I have been compensated for my time.
We don’t have any credit cards (unless you count the Next account card, which I do use for clothes in ’emergency’ times, but otherwise about once a year for a stock-up and then aim to pay it off before the next hit). We have a pretty thin savings account, which actually drew on to have a holiday this year, and earlier about a year ago when our PC died ~ one emergency, one not so much, but still pretty necessary. There’s not enough left in there to pay for another holiday and will take a couple of years to recuperate! So we don’t really have ’emergency’ money now. We just have to bite the bullet and tighten our belts for a few weeks when emergencies hit. That’s just the way it is here. And at Christmas, if we don’t have it they can’t have it ~ simples! What we do have gets split 8 ways and we do our best 😀
Still in student mode when it comes to spending. Probably why I only own one pair of smart ish sandals (still they are about 5 yrs old) having had to throw the boots and work shoes away this week as have worn holes in them. Combine that with an absolute hatred of clothes/ shoes shopping and it works in my favour as avoid unless absolutely desperate. Husband similar and we both feel guilt and the need to justify spending in new stuff for ourselves. Ridiculous really. On the other hand stuff for the house, garden and children is so much more fun and I could get quite carried away at times.
Only ever needed a loan for the car dying years ago and needed another the next day. That was a very expensive way to do it. This time saved up beforehand and then paid all on the card in one go. Hate not being in control.
The big thing I have learned in my job is to get yourself insured – too many I see get a horrible illness then suddenly realise that not taking out the life insurance wasn’t a cost saving after all and its all panic about mortgage payments and funeral costs. Ditto for critical illness cover and now I’m in my forties, it’s any time onwards that it might be needed. Hopefully not, fingers crossed, but wishing for luck won’t pay the bills.
Having a mortgage that allows unlimited overpayments, overpay as much as possible to get the debt down as quickly as you can. You then have the option of a payment holiday without penalty if you need or if you need a loan then extend the mortgage rather than take a bank loan as rates can be much better, then pay back the debt as an overpayment when you can.
The expense hanging over me though is getting my teeth fixed. Thankfully it is the one that had root canal surgery that is the problem so it is not painful but £1000 on one tooth for an implant is quite a big hit! Should have taken out that dental insurance…..
I don’t have a credit card and never have. I tend to save money monthly for emergencies. Emergencies depends on the person. My children think buying a game is an emergency.My idea of one is if the roof has blown off. 🙂
I am hopeless at saving. Totally useless. I can keep a lump that is there but putting away is not my strength.
Fran has to have an iPad for school?? Seriously?
I KNOW!