Past Future and Present Poverty

So, you asked me a lovely question, which I will try to answer about finances and in the current climate, what we are doing in the long and short term to combat that.



Well, our mortgage is currently half way through a five year fixed rate term, on a very good rate, so even though my bank, and building society have been trying to convince me to change to them I am going to stick where I am until the term expires. The reason for this is - The rate is so low, currently none of the banks or building societies can offer a rate anywhere near it, so I would basically be a complete dunce if I changed, and the reason why we took out a five year fixed rate is because our budget is so tight anyway, that we needed to know how much we were going to be paying for a length of time, and that it wouldn't be going up any time soon. If we could have squeezed enough out of our budget to take on a ten year fixed rate, we would have done so, but it was a little above our means.



Insurance. We already have every kind of insurance known to man, and even some that aren't. We have had most of these insurance policies since we bought our first house eight years ago, and there were just the two of us. As our family has grown, we have acquired more and bigger policies, to cover our burgeoning family. We do pay out A LOT of money each month in insurance, and I'm not just talking about your common or garden car, house, buildings insurance either. We have insurance in case Alex looses his job, insurance in case Alex gets ill and can't work, insurance in case Alex dies and can't work (?), insurance in case I die etc, etc. Most of it is to cover the mortgage payments, and some of it is to give us an income if there is no-one working. We have all these elaborate forms of insurance for one reason only. We do not have any other back up if there isn't a wage coming in every month. We have no savings to fall back on, in fact there is probably more money in the children's savings accounts than in ours. And there's only a couple of hundred in theirs. Alex's pension account gets a whopping great big £20 a month, so we are going to be living in a one room tenement building huddled round a one bar fire when he retires.



The reason we have the mortgage we have, and all the policies we have is down to our independent financial advisor, who's name is Adrian. We met him while we were buying our first house, as at the time his office was in the estate agents we bought the house from. We have never paid him a penny, he gets paid from the companies we use, so he always looks for the best deals for us. I trust him implicitly. He is a lovely (family) guy, I've met his wife and kids, and he isn't pushy and never gives us the hard sell. Whenever we go to see him, he always finds us various options, and then leaves us to make the final decision.



Shortly before we our current house, the man who owned the estate agents we bought our first house from died in a car crash. He was a prominent business man in the community as he lived and worked in Woodley and was very well liked. His death shocked everyone, not more so than his wife and baby daughter who he left behind. Adrian (who had been a close friend of his) told us that when he died he left no financial security for his family. He had always laughed at the idea of insurance policies, saying it was for 'anoraks'. Although he had a very well paid job, his wife had to sell the large family home they had just bought, and his cars, as she couldn't afford to live there any more and had to move in with her parents.



If this isn't a shining example of what not to do I don't know what is. I often look at our bank statements and think how better off we would be if all that insurance money we pay out every month was freed up. But then I think of Sean, and more appropriately, his wife and daughter, and it all makes sense.



Currently, we have been spending more time on tweeking the pennies, as really that's all we are able to do. We don't have enough money in the bank to do anything else with. We pay some money each month into savings, but that usually gets used for things like car tax, mot, services etc. The big picture is already looked after mostly, apart from the savings, but that will sort itself out later. The children have savings policies which we can't touch, for when they are older and they go to university or whatever. The current situation with the country's finances will not stay like this forever, although I am quite enjoying the current cut in interest rates. It makes for an interesting time at the till! And our finances will get better. My penny tweeking has reached an all time high I think at the minute, and maybe if I had more hours in the day, it would be even better!