I’ve recently been asked to join The Institute of Inertia which will see me working alongside academics and experts to try and get a better understanding of why people bury their heads in the sand when it comes to personal finance issues and what can be done to prevent it.
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Back in 2013 we were in a right pickle financially. Bills were mounting up, debt collectors were knocking at the door and life was pretty grim. For quite a few years our financial situation had not been in a very fit state but, because we were in denial, it gradually become worse and worse until it was make or break time.
So why the denial?
In 2009 both my wife and I were made redundant from our respective jobs in quite quick succession. It was a shock to say the least but we had a bit of money in the bank so decided to take this opportunity to make a change and move 100 miles from Tunbridge Wells to Southampton. My wife had family there and we thought that being a city, employment would be easy to come by.
This definitely wasn’t the case.
By the time one of us had found a job (two months after we’d moved) most of the money we had saved up was spent. For quite a while in Tunbridge Wells, we’d both been employed and earned a reasonable living. Now we were in a situation where only one of us was working and the wages were significantly lower than we’d been accustomed to.
This is where the denial really started. A bill would come in but knowing we couldn’t afford to pay it, we wouldn’t even open it. New friends we had made would invite us out and instead of saying we couldn’t afford it, we’d put it on the plastic because we thought things would get back to as they used to be.
Laziness was perhaps our downfall as well. We wouldn’t shop for the best value items because we didn’t think we needed to. We didn’t change our energy supplier or tariff because it seemed like too much hassle for the savings we would make. We also had this awful misconception that keeping up with the Joneses was the done thing.
To cut a very long story short, we thought we could carry on the life we had before when we had two decent incomes and it quickly transpired that we couldn’t. We ended up burying our heads in the sand and were in denial to ourselves that we had some serious financial issues that needed dealing with!
That was a few years ago now and I can thankfully say that things have changed.
The turning point came when we arrived at a make or break situation. We needed to take stock of our situation, get over the denial and get a reality check or we could have lost everything.
It was at that point that we finally saw sense. We awoke from this financial daydream and started being proactive in that we dealt with the day to day money issues then and there. Instead of putting things off we spoke to creditors to set up affordable repayments, we switched providers for a better energy deal and we sought out advice when there were things we didn’t fully understand.
So where’s your head at?
As I mentioned at the beginning of this post, I’ve been invited to join The Institute of Inertia and put my real-life experiences to good use by looking at the problem of inertia, identifying the causes and looking at what solutions can be done to help prevent it.
Along the way, I will definitely be sharing what I’m getting up to on the panel but in the meantime let’s find out where your heads at by taking part in a quick quiz.
Head over to the Institute of Inertia hub to find out if your head in the clouds, in the game, buried in the sand or does your heart rule your head?
Once you’ve done the quiz, head back over to here and let me know your results in the comments below.
I’m really interested in seeing your results!
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Faith A. says
Head in the Game! Although I’m not sure that’s entirely accurate. I do check the money going out, choose cheaper deals, make cut backs etc, but I’m concerned it’s not sustainable long term given the money coming in. Maybe I’m actually head in the sand when it comes to the future.
David Jacobs says
Head in the Business. Pay yourself first, establish an emergency fund, don’t spend more than you earn are the basic points that everyone must follow.