Posted by: madkentdragon | December 7, 2011

Mr Micawber Is Still Right Today

With all this talk of “pay-day loans” a certain Mr Micawber comes to mind, and this rings true just as much now as it did 150 years ago.

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and sixpence, result misery.”

So if you have expenditure that exceeds income what should you do? Get a short term loan – OK for the week you receive that loan you will be able to pay all your bills and you have some left over to buy a little extra – but what happens the following month when you have to pay it back plus interest?

What won’t you pay to fulfil your debt? That means you will owe your landlord/catalogue/credit card even more and it can spiral out of control, because unless you win the lottery or football pools (do people still do the pools?) you will still be in debt.

What happens then, do you take out more and more loans or do you ask for help?

The companies set up to help you get out of debt actually charge you a percentage to help you, but there is another way, the Citizens Advice Bureau have a scheme as do the government to assist you for no payment. Just remember when you enter with one of these agencies you will not be able to get any more credit.

Why am I writing about this?

Early in my marriage, my now ex-husband wanted a new-to-us car, the cost was £90 – it was over 40 years ago! To get this money, he contacted a “short term loan” company and borrowed £100. The repayments for this were £10 for 13 weeks; I didn’t work out the interest on it – he had his car and everyone was happy.

But this car cost money to run and to tax and insure and so there came a week where we had no money to pay that £10; the answer was to take out another £50 loan – so now it was £15 a week we were paying – and so it continued until I took in the local small shops accounts and the money I earned from that paid the loans off.

Now, with all the bad publicity surrounding the pay-day loans, the “short term” loans will come back to the fore, after all you don’t have to pay it all back in one go – but beware and remember Mr Micawber!

Come to that, doesn’t this remind you of the national finances?



  1. ;o) XXX

  2. Thanks x

  3. So true and more to the point the government should set a good example not jump on the band wagon after all if people see their actions as acceptable they can not see why they cannot do the same.

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