Today is Black Friday which will extend over the weekend, though some larger chains have had it running all week.
Hubby read an interesting little snippet about anticipated queues that didn’t materialise, which reminded me a little of the Boxing Day Sales that didn’t happen.
IMHO we are fast approaching another Boom and Bust scenario here in the UK.
We are reading about good sales and how much people are spending, but if the truth be told, are they actually spending real money?
A couple of posts ago I mentioned how deeply I was in debt when Hubby and I first met.
Part of it was of my own doing, but the ease of getting my hands on fictitious money was frightening.
It was a doddle to walk into any store chain and obtain one of their credit cards.
Practically everywhere was doing them, and with an immediate minimum limit of £500 to £1000, it was no wonder so many were taking advantage in order to purchase that ‘special outfit’, or latest TV, furniture for the home and with interest free offers on vehicles, new cars became common place on the streets.
Getting access to the money was easy, but paying it back a nightmare.
But you know what made it worse?
The greed of the Finance Houses and Banking Institutions.
Banks make their money out of debt. Charges and fees vary depending on whatever service is required, but at the end of the day, borrowing money you do not have is costly.
Whilst you are wallowing in sleep depriving misery trying to work out how to put the next meal on the table, clothe your kids or keep warm, the banking chiefs are clapping their hands in glee at the prospect of high bonuses and profit-sharing.
Interest free loans have conditions, some insomuch as your interest free period may be for say, three years, but at the end of that three years, you may not own the item you have purchased as a single LARGE final payment is called for. A payment you probably don’t have.
Car companies can get round this by offering you an upgrade on similar terms, taking into account what you have already paid as a ‘deposit’ when really all they are offering you is a lifetime of permanent debt with the bone of a new car every three years whilst they cash in on commission for the sale. That may suit a lot of people, but you never own the vehicle outright, and your terms are really no better than a lease agreement.
My own downfall was my credit cards, when I had them.
I had a limit of £5000 on three different cards, all of which were close to maxing out when the banks concerned helped me out by increasing my limit.
It was all very nice to suddenly have extra spending power, but I couldn’t afford to repay what I already owed, let alone anything else.
Debt is a downward spiral.
It can be a godsend if you can control it, use a credit card as a cash flow tool and repay the full balance every month so that no interest can be applied.
Saving money for a rainy day at the moment is futile in respect of the pathetic interest rates savers are offered. Our bank has just reduced their rates for the third time in twelve months, and we will now get just £1 per thousand saved per annum. Yet it’s depositors’ money that gives the banks some of their lending power!
It’s not worth the bother, so after all your expenses are met (rent/mortgage, local taxes, utility bills, house expenses, car running expenses, food, etc) enjoy your spare ‘mad money’ if you can rather than borrow. Make it work for you, not cripple you and make someone else rich at your continued expense.