About debt, and what I learned along the way

A drawing of a man carrying a bag of money and on the bag is written 'debt'.

This is the second post in the Money Matters series and this time the subject is debt. All aspects of it. Sometimes I look at my life and it seems I can cut it up in three different learning areas – the first part being the years I lived with my parents, the second part all adult years until I met Master T and the last part obviously my life with Master T.

Debt in the years I lived with my parents

I am sure my parents had debt, but as said in last week’s post, I knew very little about my parents financial situation, other than that it was very tight. You know, I don’t even know whether all those houses we lived in (we moved around a lot) were rentals or whether my parents were house owners.

What I do know is that the debt they had never was from bills that didn’t get paid. They always paid all their bills, but there were bank loans, cars that were bought on down-payment, as well as furniture and other bigger stuff. But, there was always money for holidays, strangely enough.

When I came to Europe and lived with my mom (I contributed to the household once I had a job), she confessed that she had a bank loan. She never told me how much, only that she had one. I think she was almost 60 before she told me the amount, and I was shocked. It was huge. It took some weeks for it to sink in, and then I made a decision. A hard one, and one of the rare moments I was very strict with my mom. I told her that I don’t want to inherit anything from her, not money but also not her debt. I wanted her to get her affairs in order before she would reach the retirement age of 65. Two years before she turned 65, she was debt free, and so proud if it. She lived comfortably in her last years, and left quite a nest egg behind when she passed. Much less than the bank loan she had, but much more savings than she probably ever had in her life.

Debt in my first working years

I touched on having a cheque (check) book in the first months that I worked, and not having any idea how to balance it. With a cheque book came the possibility of having an overdraft with the bank. The overdraft was the same amount as the salary I got paid every month, and I had run it up to the max. Every month I got my salary, and to pay my bills I had to run my account into the overdraft again. My salary wasn’t big, but cutting out meat from our diet, and eating only cheaper soya products, and moving to a cheap bachelor flat with my daughter, gave me some money every month to gradually get back to the black numbers. In that time I also had a salary raise, and that helped too.

Debt in my first marriage

I worked for almost two years before I got married for the first time. Now there were two salaries, which meant a bit more money, but things were still tight. I was the one doing the budget, having learned some hard lessons, but my husband wasn’t always happy with that. We had a car, as he needed to drive quite a while to get to his work, and I took the bus to work, or he dropped me off, depending on his schedule. His work offered to pay a study for him, so we moved to Pretoria, where he went to uni.

I can’t tell you how many fights we had when he either spent too much money going out with his uni buddies, or when he wanted to buy something for his car, and I told him there was no money for it. He told me to budget for it the next month, and I told him no way, as food for the kids was more important. Of all the fights we had – there were plenty – 80% of those were about money, and 20% about him spending too much time being the student, and not being a dad.

Like many other young couples, and the same as our parents, we had debt because we bought the car and furniture on down-payment. Budgeting for all that had to be paid every month, to make sure we didn’t miss a payment, was hard work. Tiring and stressful.

Debt in my second marriage

My second marriage was totally different. I worked half days and he worked fulltime. He had a very good job, but I wasn’t planning to piggy-back on him, so one of the first things I asked him when I moved in was for us to sit down and discuss the finances. He was incredibly reluctant to do it, and barely showed me what things needed to be paid every month. The house was his property, and he still paid mortgage on it, and of course there was the utilities bills, different tax bills and a telephone bill. He just didn’t want to share any numbers. I didn’t want to fight about it, so told him okay, then I will pay the groceries every month.

About 3 out of the 4 Saturdays when I woke up in the morning – I like to have a lie in on the weekends – he had already gone to the store and bought the groceries. With him some of our fights were about him not wanting me to pay, or to play open cards about our financial situation. We were in community of property, dammit!

Then came the time that I filed for divorce. No, it wasn’t about the money issues. My lawyer asked me what his earnings was and she literally looked shocked when I told her that I don’t know. I have never once seen a pay slip of his, or his bank statements, nothing. I couldn’t tell her. Good thing for her that I only wanted the car (which was on my name anyway), the newest computer and all the stuff I brought into the house. Since we were married in community of property, I could’ve told him to pay me half of the house, but in my eyes that would’ve been unfair, since the house was his property long before I came into his life.

Oh, and just before I left, he did open up a bit about his financial situation, telling me he had a bank loan of fifty thousand euros and that it was all my fault, because he had to entertain my family when they came to visit!

In between marriages

When I got divorced for the first time, I moved down to the south of the country, and had to have a car of my own. I bought one on down-payment, because I didn’t have the money to buy it cash. When the car broke down and couldn’t be fixed anymore, I bought another car – a 3-series BMW. A dream car. But, also expensive. A salesman totally talked me into it, that it wouldn’t be so expensive and blablabla. After three months I gave the car back to the bank, so they could sell it, but they sold it for much less than it was worth. I ended up paying for two years after that before the car I didn’t have anymore was paid off.

After my second marriage, my mom, kids and I moved in together, so we used my mom’s furniture. Then my mom decided to follow her dream and buy a house at the seaside. I stayed in the flat, and had to buy my own furniture. At the time I didn’t earn that much, so bought furniture – you guessed it – on down-payment. One thing I have learned over the years is that down-payments are quite handy, but with the interest you also have to pay, you pay about double the price the item originally was.

Things started changing when I was offered a new job in December 2003. My predecessor – someone I worked for in the past – told me what number I should ask for. My eyes grew wide, thinking I would never be able to ask for so much money, but she was at the interview too, and when asked, I glanced at her, then looked at my soon-to-be boss and said the number. Done he said.

Current times

After that, I started climbing the ladder in the organization, and every time I went up a bit, my salary was adjusted. Up to about five years when I reached the top of my scale. I took a step back from my managerial position in August 2018, but I kept my salary because I didn’t get a raise for so long. I have now been working for the same company for 17+ years and Master T is at the same company for 33+ years.

When I moved in with Master T, I handed him the financial reigns. I was done trying to make ends meet, and told him as long as I can buy a dress when I see a nice one, I don’t want to know anything about the money, other than that we are not in debt. And we’re not. Sometimes I ask him to show me the accounts – not because I don’t trust him, but because I’m curious. I am always in awe of how well he can save. He’s also into stocks and shares – something I don’t understand at all. We are comfortable. No money worries, but we’re most definitely not rich. Comfortable is good enough, and if a car needs replacement, it can be bought cash. Neither him, nor I are into luxuries, even though his shirts are always three times as expensive as my dresses. We are happy just being comfortable.

After all those years of hardships, there are no words to tell you how grateful I am for our current status, but I am mindful that as we grown older, and when we retire, we might have less money. Not a problem at all, as I know how to make ends meet, without having debt again.

What I learned from being in debt

Maybe the most important lesson I have learned is that when you run up a debt, you end up paying double what you would’ve paid had you first saved up the money.

I also learned to plan for later. Plan for retirement. I believe we all need less the older we get. Through your life you have accumulated all you want, or can afford, and there comes a time when you just have to be happy with what you have. Wanting bigger and better and newer is not the way to go. Be happy with what you have, and plan for later. Put money away for when you retire, to make it less of a shock when your salary stops and you get a pension. We save extra money for my retirement, since I miss about 15 years of government pension because of not living in The Netherlands.

Throughout my life I have learned a lot of lessons regarding money – living on little and spending it wisely. I believe it’s because of those lessons that I am grateful for our life now, grateful that we don’t have to turn over every penny the way my parents had to do until too late in their lives.

© Rebel’s Notes
Image from Pixabay

Money Matters

10 thoughts on “About debt, and what I learned along the way

  1. You are so right about when paying off debt u end up paying twice as much – you could have bought two! I had an experience i will be writing about when i was 21 and have been mindful about debt ever since. Wonderful how you mum turned her finances around with your advice.
    May xx

    1. I enjoyed reading about your experience, May. I really think this ad hoc meme you’re running is very valuable, as there is so much to learn here about money, and I hope it helps people out there to make better choices 🙂 xox

  2. Your first and second marriage remind me of my parents. My father was a habitual overspender going out for drinks, gambling and such even though as a freelancer his income was highly unpredictable. My mothers partner after that was very reluctant to share any financial details (“i am the man in the house” stuff like that) but also pretty bad at managing his finances. When the letters from the banks came she finally took some control over the budget.

    I learned my lesson. Except for student loans and half a year out of work I never had any debt, neither my wife and even though we like to spend there is always money going into stocks and funds every month. Thanks for telling your story. I hope people learn from your experiences 🙂

    1. Thank you, Paul. I do hope sharing my experiences about money (and obviously other subjects too) will help someone else out there not to make the same mistakes I have. I have some stories still to tell about gambling too, and you made me remember something else about my parents, which I hope to share in an upcoming money-post.

  3. Great post! I think it’s really important to discuss these types of things. So many people live, with their heads stuck in the sand, not knowing how to change their financial situation. You make an excellent point of saving first, and buying later…and how much less you end up paying for something when you don’t have to pay interest.

    1. Thank you, Nora. I have learned hard lessons through my life, and am glad I did, as I am so much more grateful for what I have today.

  4. Money issues are a huge problem in marriages. When you come into the marriage not on the same page financially, you are looking at the makings of a tough road…

  5. It is fascinating to read your personal experience Marie. For me that line towards the end “when you run up a debt, you end up paying double what you would’ve paid had you first saved up the money” absolutely sums up debt.
    The funny thing is that some of the things I thought were important when I bought them on credit had completely lost their value by the time I finished paying them off. If I had saved up for them, I might not have bought them at all.

    1. That’s just it, Jenna. Sometimes we think we ‘need’ something, but when you have to save for it, it also gives you the time to really think about it, whether you really need it as much as you think. I think saving for something expensive helps us to make better choices.

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