A British Man's Take on Debt, Saving & Investing

Two Steps Forward, Three Steps Back

Posted on October 10, 2009 by Lee

I am feeling a little blue today.

It seems that life takes great pleasure in kicking you when you are down, and today has been no exception.

One Step Forward

It started off well: I should have been off work today enjoying my long weekend, but instead I had arranged to go into work for 8 hours overtime (6am to 2pm).

The day got even better when I was asked to stay until 6pm instead. 12 hours at time and a half.

Despite how facetious that may sound, my regular readers will know I am working to pay off my debt before New Years Day 2010, at the very latest. A renewed sense of urgency was provided by my employer when they sent round an email two months ago warning that we were facing a significant funding short-fall over the coming years, and salary cuts were not outside the realms of possibility. Any and all overtime is therefore extremely welcomed, and worked in earnest towards my goal.

Two Steps Forward

As I was edging closer to being one or two months away from being able to pay off my largest, final debt, I phoned my loan provider today to ask what the settlement figure would be if I paid today. I couldn’t of course, but I wanted to know precisely how far away I was, as simply calculating on the loan outstanding is only half the equation.

It’s quite a complicated affair. There is an early settlement fee of 1 months interest if settled early at all, or 2  months interest if paid before at least 50% of the loan term has passed. There is also the added complication of a scaled percentage of the loan insurance being refundable, depending on what stage the loan is at.

If I paid today, I have precisely £8,036.64 outstanding (or $12,726 USD for my readers across the pond).  That is still £2,200 more than I have, so paying today wasn’t an option. But next month could well be!

One Step Back

All sounding quite good so far isn’t it?

Except, as of next month my eligibility for a 56% loan insurance refund expires. From next month onwards until sometime late in 2010, I become eligible for only a 26% refund instead. Despite my £415 payment next month, I will actually owe more afterward than I do this month. The settlement figure for next month will be in the region of £8,400. Canceling the insurance altogether whilst tempting, is not viable due to…

Two Steps Back

I found an email from the Big Boss with an update on the 5 year forecast for our organisation. It re-iterated the problem in the last email we all received, but put it starkly that despite looking initially at non-pay budgets, there will have to be cuts.

Department heads have been asked to identify 2% savings for next year, saving as a whole £5 million for 2010/2011. If it stopped there, I would not be too concerned. A one-off saving of £5m in an organisation the size of ours would be achievable with relatively little pain and likely no compulsory redundancy whatsoever. That £5 million though is merely the tip of the iceberg.

After 2010/2011, we will need to save £7.5 million every year until at least 2015.

Compulsory redundancy across the entire organisation is a certainty. My department may be insulated from the initial round, but I do not see how we can reasonably escape the entire period unscathed. Bad, bad times are ahead and I really dislike this feeling. I have worked for the same organisation for coming close to 8 years. I enjoy my job, I am good at it. The pay enables me to plan for my future.

Without it, and in the current financial climate, I no longer have a sense of direction.

Even the best case scenario is emotionally unpleasant – 5 whole years of wondering if I will have a job month after month. The recession has thrown my 5 Year Plan (and countless others, of course) out the window. My dream of becoming a home-owner in 4 years time, faded with this evening’s sunset.

Three Steps Back

A letter from my solicitor had landed on the mat for me when I got home.

Half expecting some good news, it was instead, the third and final kick of today. My wife (who wanted the divorce in the first place) has decided to contest it and defend the matter in court.

As she is bankrupt and to my knowledge unemployed, the public purse will be paying for her defense courtesy of Legal Aid, while I continue to pay for my solicitor and subsequent court hearings out of my own pocket, if there is any money in them come the end, given Kick Two.

Closing Thoughts

I must get consumer-debt free, and soon. It is reasonably likely that employment will continue for at least another year before anything starts rumbling in my direction; yet I cannot help but worry about “What if I get made redundant tomorrow?”. All my hard work over this year would virtually have been for nothing.

All my hopes, all my dreams, all my plans, gone in a single stroke.

What will I do?

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11 Comments to “Two Steps Forward, Three Steps Back”

  1. billythekid says:

    Dude, that sucks. I love how you hint at your job here by the way, without letting the cat out of the bag. ;oP

    What the f*** is your estranged wife contesting? Women are mental, glad to know my tax pounds are going to be hard at work helping her screw you over…

    I hope that closing link is a joke mate.

    btk

    • Lee says:

      Hey Billy.

      Quite what planet she is on is a mystery. Even my solicitor finds it baffling. I can only assume she holds the (entirely mistaken) belief that by contesting it she will make some money out of me. She couldn’t be further wrong. In fact my solicitor intends to pursue her personally for cost recovery on my behalf so in doing this she opens herself up to a larger liability.

      Quite perplexing, in all. And yes, as a tax-payer as well I get the dubious pleasure of paying for my divorce twice in essence!

      The closing link was more of a “What I’m not going to do”, even though I haven’t a clue what I’ll do, if that makes sense.

      Take care mate, see you soon.

  2. beachtiglet says:

    Lee, you always cheer me up when I’m feeling overwhelmed. I’m willing to listen if you need me. Tig

  3. Ken Adams says:

    Smack her hard in court, Lee.

  4. Monevator says:

    Lee, sorry to hear about the setbacks. I’m sure you didn’t undertake this journey and even commit to writing a blog about it to throw in the towel now though.

    I hope these hurdles will one day be part of a success story that will sustain you through new, still unguessable – and perhaps more pleasant – future challenges when you’ve long since beaten your debts and closed this chapter.

    Fight on! :)

  5. Hey Lee!

    Sorry to hear about your stresses. Management doesn’t seem to be a good job guiding people’s morales!

    I firmly believe we are coming out of this recession and 2010 will be better than this year. Companies have a tendency to over fire in the down turn, then over hire. Have faith!

    Management is fickle, and when the good times come back for longer, they’ll then talk about raises, bonuses, and hiring again in a flick of a switch.

    Don’t worry about being a homeowner. Take it from me, it’s overrated. What’s more important is being in control of your finances and have a significant cushion to relieve your financial stress.

    Stand strong mate!

    Best, FS

    • Lee says:

      You know what, FS? You are right. Home ownership isn’t the one goal of life. It was for me 10 months ago, but my mood has changed. My priorities have changed.

      Whatever happens, I will stand strong. Thank you for the encouragement!

      (Oh the irony – the CAPTCHA for this reply? “Disquiet Employees”)

  6. DMT says:

    Lee – its sounds like you had a real tough few days – but you know what?

    When your really at a low point in your life, its nice to know that things will be going upwards from then on….

    Any idea when you will hear about your job?

    • Lee says:

      Sometime between now and 5 years time. I get the impression from immediate management that we’re good for at least another year, so there doesn’t appear to be any panic, which is quite nice. I guess it’s time to just excel, keep my head down and push on !



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