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Finance ...continued


Some years ago a lady by the name of Viv Nicholson hit the headlines when she scooped the football pool winning thousands of pounds. When the interviewer asked what she would be doing with the windfall, she enthusiastically replied, "I'm going to spend,spend, spend", and she did!

It would be a great temptation for all of us, if we were in the same situation. At that point people need serious advice on how to handle such sums.

It is surprising to learn however, even in the routine handling of domestic income how many young married couples have little idea how to manage it. It is noted that the media has picked up on this and TV programmes are giving practical advice. This could be extended to include something on the schools' curricular, so that the youngsters get at least an elementary grasp of finance, relative not only to their own future domestic circumstances, but also for their immediate help. In these affluent times parents are very liberal with spending money, and together with some casual employment the children are not exactly poor. They should early learn responsibility in this area.

I have actually conducted seminars on Finance with a Church congregation as it is important enough to be a matter of pastoral concern.

In Charles Dicken's novel David Copperfield, Mr. Micawber makes a very simple yet profound economic statement. He propounded as follows: Annual Income £20. Annual expenditure £19.19.6d (pre-decimal currency) Result: Happiness. Annual Income £20, Annual expenditure £20 and 6d. Result: Misery!

One way to avoid Mr. Micawber's 'misery' is to work out a budget which will anticipate roughly what one's expenses are likely to be in relation to what the income will be for a given period. This can be done by checking the expenditure of the previous year, or arriving at an estimate if all the receipts and bank statements are not available. This will include such regular payments as mortgage or rent, food, transport, insurances, heat and lighting etc. not forgetting clothes and holidays and other regular incidentals. If that total figure is divided by twelve, the monthly commitment will emerge. That figure is the minimum to be reserved for necessities. The balance (if any!) will be available surplus for optional use.

What about our 'Flexible friend'?

This refers to the ubiquitous credit card. It is now mega business. Profitable for the operators, convenient for the customers and readily acceptable by the retailers, so who's complaining?

In the last fifty years there has been a change of attitude to the subject of credit. It used to be called debt, and hire-purchase was derisively dubbed the never-never. Most people paid cash for their purchases and were proud to do so. There was something not quite nice about owing money, and buying before paying was regarded as a wrong priority. But now that's all changed, American Express? That'll do nicely sir!

Of course the commercial world has always extended credit to customers if only on a short-term 28 day period to settle accounts, and most of us enjoy an even longer time to settle gas, electricity and telephone bills as they are for services already provided

When is a debt not a debt?

The Bible does say Owe no man anything(15), but it could be argued that if a loan is agreed on the conditions of re-payment at certain periods and the contract is honoured then debt as such is not incurred. The Bible also recognises that there will always be poor people who will need to borrow, and in Israel's legislation it was forbidden to charge interest when loaning to a fellow Israelite. In such cases of poverty the caution was not so much on the side of the borrower but on the lender to not exploit the situation. The general method of charging interest in the commercial world does not appear to have been condemned by Jesus according to the parable of the talents where the lazy servant was berated for not at least putting his money to the Exchangers to gain usury(16).

It would appear that Christmas-time there is a lot of irresponsibility with spending on the credit cards. Folk go on a spending spree literally involving billions of pounds. The crunch comes about a month or so later when payment becomes due. The plastic has to be laid aside and real money found. In some places Advice centres have been opened to help people cope with the crisis, and even suicides have been known. One man was cited as obtaining eight credit cards, borrowing off each card to pay the others; he ended up bankrupt

The card can give an illusion of grandeur. You can pretend to be affluent, because it is painless to just sign on the dotted line, but it is not so painless when you must shell out real banknotes from your wallet! And if you miss the deadline for re-payment then the interest kicks in, and sometimes at an exorbitant rate.

Temperance or self-control is a Christian virtue and here lies the key to the problem - care and responsibility. Thousands of folk have wandered irresponsibly or perhaps even innocently into the credit minefield and have become casualties. There's little doubt of course that the credit card will become more and more the general method of purchase, eliminating the need to carry large sums of money on the person, and thereby also reduce the possibility of theft. We might even be encouraged to have our own personal identity tatooed on the forehead or wrist, and if grandma thought that the old Co-op check number savoured of the mark of the beast, what would she have been thinking today?!

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