Lisa Markwell: Pocket money
My paperwork is telling a sad story of great interest
Saturday 14 June 2008
A cursory glance at the paperwork on my desk suggests that I don't find my finances interesting. And – oh, the irony – interest is exactly what it's all about.
The piles of bank statements, credit-card statements and mortgage statements seem to have one thing in common – high interest rates. Looking at the small print reveals some large figures; even I am not dumb enough to be taken in by showing the monthly interest rate, rather than the annual. That's the credit cards. In the case of the mortgage, it's all about the interest, since I seem to have saddled myself with an interest-only mortgage without noticing. We'll come back to that.
A relatively new arrival is a bright, shiny letter from the bank (that's had my business for forever) outlining the way my current account works. By accident, while trying to find the bit of paper beneath, I noticed at the bottom of page four the interest rate for going overdrawn. It's rather steep.
I don't know when I got so blasé. It's not like I have so much money that interest rates don't matter to me. I am one of the little people. Perhaps I should read the leaflet enclosed with my bank letter, "Making Sense of Overdrafts". Hmmm, if only I could find it.
Things could be worse. At a particularly low point, I had seven credit cards on the go, the hangover of an attempt to juggle interest-free periods and low rates and all that jazz. Naturally I lost interest (there's that word again) in the terms and kept the cards after the promotional periods had ended and the rates went up into the stratosphere.
I'm now down to two, and it's been several weeks since I used either of them. Hey, don't knock it, that's a personal best.
So, even with my laissez-faire attitude, I've come to understand that it's worth paying attention to interest rates. A cautionary letter from my mortgage provider has been all the impetus I need to look properly at what's what.
I've been thinking back to when I remortgaged and trying to understand why I thought interest-only was a good idea. I don't suppose I was mis-sold the offending arrangement; it was more likely to have been a case of me saying "mmm", "uh-ha", and other non-committal noises to suggest that I was on top of the situation. There was also some need for money to tart the place up, so maybe that had something to do with it. Oh, for a lucid thought.
So, to action. The pile of offending documents is now on my desk, To Be Dealt With. Is it worth pointing out that the desk on which they sit is in a carved-out corner of the bedroom, built with money added to the mortgage? It seemed like a good idea at the time, after much discussion (nagging?) and much husband-grumbling about stepping over piles of discarded clothes, old magazines and the like.
It's a walk-in wardrobe cum office, a thing of beauty and a joy forever. (Well, until we move.) At one end, my embarrassingly large collection of footwear and bags is quietly breeding; at the other, the aforementioned desk is groaning under the weight of paper. In the middle is a filing cabinet filled with contraband sweets, but please don't tell my children. It helps enormously with the clothes-sorting and bill-paying procedures.
There I'll sit, sifting through the debris to find the "overdraft for dunces" leaflet, and trying to work out how to reduce the interest rates of my varying debts. (I shall not, at this juncture, attempt to address the terms of my various – ahem – personal loans.) I did hear from a financially astute friend that now is the moment to get a fixed-rate mortgage, before they rise again. So I'll be studying the pages surrounding this column with closer than usual attention, surfing the comparison websites and maybe even – hey, push the boat out – consulting a reputable financial adviser.
Let's hope that my interest in interest can be sustained long enough to get me in better shape, money-wise. Now, how about a Curly-Wurly?
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