Lisa Markwell: Change your life and stop spending money you don't have

Share
Related Topics

What sound could be sweeter than the dull crunch of a credit card being bisected by the kitchen scissors? It's set to be the soundtrack of the summer, long after the drone of the vuvuzelas has died away, and the grunts of ladies with excess endorphins on centre court are silenced.

We may be the most indebted nation in the world, according to this week's Budget, but slowly, slowly, by saving a little more and borrowing a little less, things are changing. The Bank of England reports that families are keeping more in their pockets than they are spending for the first time in more than two decades.

It's not often I'm proved right about anything, never mind financial advice, but when I stopped using a credit card last autumn, purely to spite the banking bullies, I didn't realise I was an early adopter of a get-debt-down movement. Having lived up to the stereotype of a spendthrift for years, with multiple credit cards – the legacy of always chasing the 0 per cent deals – I came over all parsimonious when the interest rates climbed into the stratosphere. I started paying back, and using my dusty old debit card.

The response of one company (oh all right, it was American Express) was to cut my credit limit right down. I'm no banker, but that suits me very well. But not so much them, I would have thought. Doesn't it work (in their favour) by giving us generous limits that we always bump up against, thereby ensuring years of debt, which is reduced by amounts visible only via an electron microscope?

Well, it turns out, in a Financial Stability Report released yesterday, that lenders are preparing to write off vast swathes of debt because so many of us have done that in recent years. A credit card debt of £4.5bn has disappeared into the ether over the past year; a jaw-dropping amount to us civilians (although, no doubt, managed with their usual dead-eyed efficiency by the financial services industry).

So was it better to reduce my personal debt, or should I have continued buying foreign holidays and fripperies on Net-a-Porter until things got really gritty, then filed for insolvency and indirectly stuck it to the man (to paraphrase the peerless Jack Black in School of Rock)?

Real grown-ups will tell me that the former is better – indeed, having briefly been in close proximity to an undischarged bankrupt I wouldn't want to go there myself – and just living without credit has been a salutary lesson. Perhaps I might feel differently if the weather was dire and the Cornish camp site I'm booked into hadn't upgraded to wooden floors in the tents, but the glow of austerity rivals the sunshine over SW19. How soon one forgets using the credit card in the supermarket, as I did, and I am sure that some of the 147,000 Britons made insolvent last year did, a folly which means that, with the average interest rate approaching 17 per cent, and a cost structure of paying back credit that is almost wilfully (or even definitely) incomprehensible, a tin of baked beans – that symbol of frugal living – could end up costing a hundred quid.

So living within one's means – or in the black – is the new, er, black. No more MasterCard in Marks & Sparks, no more topping up the mortgage to top up the tan in Bali. It feels good; it feels prudent. Of course, with interest rates still climbing (the banks need to recoup that bad debt from the rest of us, natch) and the VAT increase on the horizon, who among us can actually move from borrowing to paying back to – gulp – saving?

Is it just me that is more likely to win Euromillions than have a reservoir of money for a rainy day? Well, against the £20bn that we borrowed, we Brits banked £24bn, so the answer to that is, perhaps, yes...

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: My client is an excellent, large partially ...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Day In a Page

Read Next
 

i Editor's Letter: Science versus religion in the three-parent baby debate

Oliver Duff Oliver Duff
Kylie has helped to boost viewing figures for the talent show  

When an Aussie calls you a ‘bastard’, you know you’ve arrived

Howard Jacobson
Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee