I once bought a ghetto blaster on credit; I was very proud of it. It had the graphic equaliser, the bass boost, and the twin cassette decks that were de rigueur back then. It was a serious piece of kit and weighed enough to tell me it was substantial.
I wasn’t worried about the credit terms as I only needed to pay something like £12 a month, and that was a small enough percentage of my wage. I was so pleased with my stereo and with my credit terms that I bought some trainers and some other clothes to bolster my poor wardrobe, and again I wasn’t worried about the repayments as they only came to something like £20 a month.
The next month I felt very good about paying off that £20 – I didn’t need to pay any more than the minimum, as I felt the interest rates were very reasonable and negligible really on such small totals.
Then I had to buy an expensive train ticket for some very good reason, and as it was the end of the week, I knew it would clean me out and leave me with only pennies in my pocket, so I used my credit card.
The next month, my repayments were made quite easily, and I felt I was managing my finances in a very mature fashion, but I decided to buy my food for that fortnight on my credit card, just to help me balance my spending nicely.
The Tao Te Ching (Verse 63) [Ralph Alan Dale] says:
Act without acting on;
Begin a difficult task in its easy stage
because large problems
grow from small ones.
Begin a large task in its formative stage
because complex issues
originate from simple ones.
I don’t think I need to tell you that over the next 24 months, I continued to add just a little to be my debt each month, while only ever paying off the minimum. As I approached my credit limit, I felt certain that I’d have to re-assess my relationship with credit, but no, I was offered a larger limit, and I was pre-approved for a couple more cards! Well, how nice to be valued! How nice to be treated like an adult for a change!
I don’t need to tell you that things spiralled and spiralled from there.
As a ‘proper’ adult with a ‘proper’ job and half-decent perspective on my finances, I fixed my credit problem, but it took a Herculean effort and has left my finances scarred for years to come.
The effort I’ve made to secure my financial freedom and banish my debt has been out of proportion to my original debts; I’ve been on an extreme financial diet for years and have pushed myself to earn the maximum salary, all to pay to other people. Only in this and next year will I begin to see the light, and be able to spend on myself and my loved ones.
Don’t sweat the small stuff; just deal with it
A small tear in your favourite rucksack can be mended with a patch, but if you don’t tend to the little hole, your bag may dump your precious items on the pavement one day, and your rucksack will be irreparable.
A harsh word to a loved one can be taken back with a heartfelt apology, but an argument left to simmer for days can boil over and scold you both.
A window sill that’s painted every year will keep the rain out, but woodwork left untreated for the winter will rot away.
Sometimes, life happens to us; people throw us curve balls and we have to react as best we can – sometimes we just have to deal with the fallout from some nuclear happening. But oftentimes we’re well aware of the troubles ahead of time, and often we have plenty of opportunity to influence how they develop, and ultimately transpire.
We procrastinate, because that little ‘To Do’ on the post-it note is no big deal; it’s neither important nor urgent.
On a scale of 1 – 2, where 2 is ‘world peace’, how important is this project?
We confuse ‘important’ with ‘urgent’ – some things, like your anniversary, are important, so plan for your day and make it a celebration. Some things, like your deadline on Friday at work, are urgent, so manage your priorities and keep your promises. But not everything is important and urgent, yet many people tell us that their projects are both (when instructing you to do something for them).
Much of the time, things become urgent and / or important because someone slipped past their deadline, or something catastrophic has happened due to some other thing not happening. If only that other thing had been taken care of, catastrophe would have been averted.
- Some urgent things are not important, and so they go to the middle of the list;
- Some urgent things that are not important rise to the top of the list because they’re small and easy;
- Some important things are not urgent, and so they go to the bottom of the list;
- Some important things that are not urgent rise to the top of the list because they’re small and easy.
Some small and easy things will inflate / conflate into mammoth tasks if they’re not tended to, but how do you spot which is which? How do you prioritise the urgents and the importants?
Predict if it’ll go atomic
Experience and observation can give you the foresight to predict which will inflate and worsen without attention, and which will remain small. If you can consider the impact on other people around you, and divine the interdependencies, you’ll be able to estimate the snowball factor. Use some open and closed questions with the people involved to gauge the impact of de-prioritising their project.
Smash the big rocks first? What if you’re so damn good you only have pebbles?
I have read that one must act on the big rocks in order to get them out the way, before dealing with the pebbles. I’m all for smashing the big rocks; they can be so intimidating that unless we really focus, we might skip them entirely – but I’m saying that with experience and observation, you may be able to see some pebbles which will become big rocks. By dealing with them while they’re only pebbles, you’ll save time, effort and money.
The Tao Te Ching (Verse 63) [J. Legge] says:
Act without acting;
The Master anticipates things that are difficult while they are easy,
and does things that would become great while they are small.
All difficult things in the world are sure to arise from a previous state in which they were easy,
and all great things from one in which they were small.
The sage sees difficulty even in what seems easy,
and so never has any difficulties
David Allen says ‘can this thing be done in 2 minutes or less? If so, do it!’[Wedge]
A great blog, and one that really made me think – especially the first part about credit.
I got my first credit card when I was really young (I was working full time for a bank at 16 so was given credit pretty much straight away). My first limit was £500 which seemed huge and I could never imagine how I might ever get anywhere close to spending it. Ha! The naivety of youth!
Like Wedge, I started off happy enough; only purchasing ‘real’ things and comfortable with my monthly repayments. However, I soon fell into the trap of buying things like food and travel tickets too, and only making the minimum monthly payments. Before long I had reached my £500 limit and had nothing of any value to show for it.
I needn’t have worried – my limit was quickly raised and as my credit rating increased so did my number of credit cards. Companies were literally throwing their money at me and I was having a blast spending it. It wasn’t ‘real’ money, it wasn’t ‘my’ money – it felt like a gift (much like when they ask if you want cash back at the supermarket!) I never allowed myself to think about how I’d eventually pay it all back – I could afford the minimum payments each month and that’s all I cared about.
Eventually I ended up with three credit cards, all with enormous balances and all up to their limit. By this stage I could hardly afford even the minimum payments and was beginning to panic. But, as always seems to happen with credit, I was saved at the eleventh hour by another finance company who offered me not only a card, but a cheque book to use on the card too! All my problems had been answered (or so I thought). I used the card to continue to spending, and the cheques to pay my other credit card bills each month.
Of course, I eventually reached the limit on the fourth card too, and with no more options open to me I couldn’t see a way out. Then I saw an advert on daytime TV for consolidation loans and called them. They promised to pay all my debts off in return for “one easy to manage monthly payment”. Yeah right. I jumped at the chance of course and quickly signed myself up to 20 years of repayments, that with continuous increases in interest rates have grown by over 25% over the few years I’ve been paying.
I’m stuck with it now – and as it’s heavily front loaded I’ve only paid a tiny amount off the balance in over five years. More upsetting perhaps, I don’t appear to have a single ‘thing’ to show for my thousands of pounds worth of debts, and like many people I was stupid enough to keep hold of the credit cards *just in case* – but that’s another story….