Quite a long time ago, one of our old advisers, who was getting near 80 at the time, decided to pack it in and spend his days in his garden instead. It wasn’t because he was feeling too old or past it, he said, that was far from the reason. The reason he was leaving, he insisted, was that we had largely ceased to be a budgeting service, but had increasingly become a debt management service. When he had started budgeting, way way back then, the majority of his clients received enough income to be able to meet their day to day living costs, once they had acquired the necessary budgeting skills. Now it was all different, and he didn’t like it, and his heart wasn’t in it anymore
How a mole hill becomes a mountain
I’m not going to debate the merits of his reasoning, but one of the big problems for so many clients today certainly is debt, and very often the debt is compounded monstrously not only by interest and penalty charges, but by people, desperate people, taking out loans that they also can’t afford to repay, to pay those unpaid bills. They don’t seem to be able to grasp the fact that if they don’t even have enough to pay their bills, how can they ever repay a cash loan, mostly at savage and extortionate interest rates? They’ll cut back on food, that’s what they’ll do, and rely on food banks, miss the rent and the power bills. The cash loan companies and the debt collectors feed off each other. Too many clients just make it worse and worse for themselves, as penalties and interest charges slowly transform a mole hill into a mountain.
Our magic wand is broken
So many people, so much debt, so many debt collection agencies. It’s enough to make you sob into your Weetbix. There are so many people come in, and they say they just want to clear their debts. That’s understandable. Trouble is, half of them don’t even know how much debt they have, they have moved around too much, kept running to stay ahead of it all. Now they’re tired of running, they want us to find out their debts for them first, and then they want us to wave a magic wand and make it all go away. That it might take effort and commitment from them is a hard message to hear.
Shopping bags and tax refunds
I had one woman who came in, and when I asked her about her debt , she said she didn’t really know, but she did have a lot of letters at home, all of them unopened of course. Human nature, hide from the horrid stuff, or try to run away. I made her bring them all in, in shopping bags, tipped them on to the desk, and started opening them while she shrank back in fear on the other side as though a snake or poisonous spider might crawl out and strike at her. It was the IRD letter that frightened her most, because she had no idea of what demand or threat it contained, but it turned out though that it was a tax refund cheque for her, which could have stayed in the drawer for ever. It all quite made her day, her situation wasn’t nearly as bad as she feared, almost manageable in fact, and she also found some extra spending money.
Calm minds make good choices
People panic when they’re stressed out, they do really crazy stuff, and we have to try to stop them doing it. That fence at the top of the cliff we talk about so much. People have to take responsibility for their lives but you can’t make anyone see sense or logic when they’re in the middle of a panic attack. You’re got to get them calm first, concentrate their minds, and help them work it out themselves, and then we’re half way home.
- Always open mail, and check due dates, and interest charges.
- Don’t just plan for the future, keep track of the past and present, particularly debts.
- If you can’t afford to pay your old debts, you probably can’t afford to repay new loans either.
- Debt consolidation loans sound too good to be true and often are. Check with your adviser.