Anti-FIRE – the YOLO train-wreck edition

It’ll soon be the season of goodwill, which also seems to bring about exceptional financial muppetry for some reason. A few years ago it was Shona Sibary and her excessive brood that was financial folly du jour, along with TV producer Charlotte and a few also-rans. Along with running articles on how you can get to retire early, we’ve had a few on people who don’t seem to be planning on retiring ever.

I was tickled by this young 30-year old singleton living with her parents. Now I have some sympathy for her original plight of living in London on 40k a year. If you don’t want to share your living costs with other people, be they a partner or some sort of shared housing/flatshare arrangement, I can believe 40k isn’t enough to live in London. What’s a girl to do in such a quandary? Clearing off back home to live with Mum and Dad seems like an eminently sensible thing to do. Hats off to her for effective action in the face of adversity.

£40k p.a and living in her childhood bedroom, but still with a negative savings rate. WTAF?

I also have to admire that she doesn’t have a credit card because she’s too worried about ending up in debt. Wise move, that. But where I am totally nonplussed is that of her £2200 pcm take home,

By the time I’ve paid rent, done some food shopping (I want to pay my way as much as I can), settled my phone bill and insured, taxed and put petrol in my car, there’s not a great deal left.

I mean FFS? Let’s leave aside the breathless insouciance of not getting that: hitting Bank of M&D for a few hundred sods a month for foreseeable expenses like eating and car maintenance is not paying your own way by any of the usual definitions of the term.

An ermine spent some £400 on road tax and insurance and £1k on servicing and fuel last year. My phone bill is some £50 a month, so that’s about £2k p.a. Let’s say that’s £200 a month. Leaves our heroine with £2k a month. Say she spends £1000 a month on drinking with her workmates and clothes, and surely the reduced rent to Mum and Dad plus food can’t eat up the remaining £1k. I’d say our young lady has a serious drugs habit she’s not letting on about if it’s really true that none of the £2200 a month actually sticks to the sides. There’s precious little detail about what she actually does spend it on, this is Grazia, after all, which seems to have little detail about anything. It did, however, introduce me to the latest wheeze to part the financially naive from their hard-earned:

Klarna – a buy-now pay later app

As I was considering a corduroy pink boiler suit in the Topshop Black Friday pre-sales, under the Add to Basket button, a rectangular box winked at me: “Pretend it’s pay day! Pay ⅓ now and the rest later”. That’s Klarna.

I confess I’ve read the entire article, and looked at the Klarna website, and it looks like a credit account that’s restricted in stores you can use it to pay. It absolutely beats the hell out of me why on earth you would want to do that, but if a subset of Millennials really are so gormless that they find ease of use of payment so important to them that they will take these restrictions lying down, then they deserved everything that’s coming to them, quite frankly. A jolly good shafting, by the looks of it.

Financial Friction is your Friend

There’s a strong hint that Klarna’s bad for your wealth right in the rubric here

Klarna is the millennial store card, designed for a generation who want things as easily as possible, or in Klarna’s words “a frictionless buying experience”

You want friction in the buying experience. It throws sand in the wheels of your advertising-addled monkey-brain. One of the wins I had in racking back my spending was the simple addition of controlled friction. If it cost more that £100, I wrote it down on a piece of paper with a date. Allow a week to pass. If it still looks like a good idea a week later, go get it. It’s really quite amazing how many things don’t look like such a good idea a week later. Hours of your life died to earn that money. Honour the sacrifice by taking the time out to think. Obviously if it’s a piece of safety equipment or it’s going to save life right now then go right ahead, but most purchases really aren’t that urgent. A little bit of sand in the wheels of the Iwantitnow reflex doesn’t hurt. Nowadays I can get away with 24 hours, but the week cooling-off period is a good one to break the I-want-it-now habit at the start.

Klarna is good for them. It’s not good for you. Much of Grazie’s article is spent talking about how great it is to be able to ‘buy’ a gazillion sizes, try out the ones that fit and return the others, without having to front the money. In the old days you could do that in the store, it was called a changing room. But fair enough, I geddit, things change, Millennials live busy lives and don’t do face to face, life is lived best through the screen of a smartphone. What I can’t get is what does Klarna do here that my trusty credit card can’t.

If I buy five pairs of high heels just after I pay the card off, I get well over a month before I even need to think about paying back my flexible friend. That’s probably long enough to find out which four pairs will give me bunions and return the buggers for a refund 1

a hard credit search each time you want to slice it

But the worst thing about Klarna is that say I am Grazie’s Sian, and while Klarna lets me return 9 out of my 10 items without raising the capital up front, I still decide that I need to slice it because my 40k salary is insufficient to buy myself all the things and experiences I wish to have in my young life. Each and every time Sian hits the old ‘slice it’ button, that’s a new hard credit search. Since she’s in the habit of spending more than she earns, that’s a new hard credit search every month, if not every purchase.

In comparison, if a grizzled Ermine decides to slice it, that’s called ‘not paying off the credit card in full every month’. No new credit search, just business as usual. It’s a stupid way of living for all the usual reasons, but were I saving for my house deposit then when I get to ask for a mortgage the bank isn’t going to go ‘Holy cow, 12 hard credit searches in the last year, no way am I lending this punter a single lousy penny, never mind a couple hundred grand’.

Nobody will lend me any money, because I have virtually zero income. The last time a hard credit search for ‘would you lend this mustelid any money’ was run on me was when I took out my credit cards, which was when I was still employed – it’s getting on for over ten years now. I took a look for credit searches on me. They are all for insurance and ID qualification, plus one for Starling bank. Who then go on to lie about my balance, saying it’s £0. It’s £2500 FFS, because they pay me a gnat’s cock of interest on the current account as well as being the solution to not getting receipts for contactless payments. They also don’t charge me stupid amount for using the card abroad 2.

Over There and Overindebted

Everything’s bigger in the States – houses, hot dogs, cars, and debt. And Financial Folly in the pseudonymous Kate and Tom. The problem is simple. Too many snowflake kids, too many airs about the kids, too much house.

Our first house was perfectly fine, but I was pregnant with our third child, and we had three bedrooms in that house and wanted a fourth.

They could probably afford the kids – just save the $15k pa each that goes on private schooling and give it to them as a bounty on reaching 21. See Rule 5 later on

But we have a good deal — we’ll pay $15,000 for the three of them. But, of course, it’s all going back on credit. There’s a company that offers educational loans for private school.

I love the way he claims to be good for $90k a year, and get works as a bartender at night. I mean, how does that bartending job even get to shift the needle on the dial? Then there’s this sort of addled thinking:

Tom: To be fair, we do try to save money where we can. We had a lease on a minivan that was costing us $405 a month that we just downsized to a $208 car.
Kate: We always lease cars. Honestly, we can’t afford repairs. If our car broke down, we wouldn’t have the $3,000 to fix it. We need to have that high car payment because, frankly, we are not good enough with money to have savings.

Dudes, it’s simple. If you need to lease a car, you can’t afford to drive one. End of. Sure, if you could afford to buy one, but choose to lease, well, perhaps you get the new car smell more often. I pay too much for some things, because I can’t be arsed to squeeze the lemon on everything. I can afford to do that because I don’t borrow money for these things.

These guys aren’t stupid and they’re earning a decent screw. They’re playing a strong hand incredibly badly.

More and more I start to wonder if the road to financial success is far less about what you do do. It’s a tough one – in nearly all other endeavours you progress by getting better at what you do do. With money, an individual surrounded by clever people manipulating the atavistic monkey-brain with advertising, social media FOMO and people who want your money finds themselves in an unfair fight. It’s what you don’t do that matters:

Rule 1: Don’t spend more than you earn

Rule 2: if you really must break Rule 1, then not on wasting assets. Sadly wasting assets often includes education nowadays

Rule 3: Don’t lock in commitments you can’t afford

Rule 4: Never own anything that eats while you sleep

Rule 5: invest in your children. Teach them the skills to be self-sufficient adults

The writers of The Millionaire Next Door bring out rule 5 of unassuming millionaires: Their adult children are economically self-sufficient.

None of that is about investing. You gotta plug enough of the holes in the bucket to stop running out of month before you run out of money.


  1. I guess as a quadruped an ermine will need two pairs of heels to strut its stuff, but Visa and Mastercard can handle that 
  2. Not that that’s going to be a thing until we find out which way is up with all the Brexit bollocks coming along. 
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33 thoughts on “Anti-FIRE – the YOLO train-wreck edition”

  1. “With money, an individual surrounded by clever people manipulating the atavistic monkey-brain…finds themselves in an unfair fight.”

    Unless, of course, you prescribe to a FIRE philosophy, which of course almost certainly makes it more likely that you are someone “With money”.

    It’s such a no-brainer, sometimes I despair!

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    1. but all of us are young and foolish at the start 😉 It seems the hole you can get into happens both faster and deeper now, abetted by the dreadful normalisation of student finance being called loans rather than a graduate tax. If you owe £50k student debt at 21 I can see that it’s tough to make the call that a £1k loan on a credit card is that bad. It’s downhill from there, and even if the light bulb does go on at the bottom of the hole, that’s a lot of tough digging and atypical spending to get on the level.

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      1. I think this is a real hidden miss-selling disaster incubating, I was horrified when trying to dissuade a younger sibling from borrowing up to their eyeballs at the time, but got the impression their understanding at that age is limited, whatever I said seemed to still translate to free money. ”Oh but you only have to pay back if you make serious bucks within a certain time period” I said whatever they claim now can change and your situation also may change, so it comes back to bite you in ways you never could have imagined, don’t take the risk just because it’s invisible. Fast forward to 6% interest rates, (from 0.9%) loan books sold on to glorified bailiffs and other shifts of the goalposts and now you’re effectively reduced to indentured labour because you’re being chased for that money like any other loan shark. People feel safe with govt. debt thinking they’re guaranteed humane treatment because they’re protected by their vote to an extent.

        In the same way as people are judged too young to be able to legally drive a killing machine because they’re incapable of understanding the risks involved, they should be protected from taking out debt that can change the course of their lives, even ruining them. Worse still, though my sibling managed (only through luck they don’t appreciate) after years to pay off that debt, the fact that it didn’t hurt has left a damaging impression that it’s ok to just load up on massive debt any time life gets less comfortable.

        Liked by 1 person

  2. My millennial friend has FINALLY started cooking for herself rather than surviving on ready meals and takeaways!

    So, Starling Bank? Are you a fan? I just opened an account and think it’s a great way to partition your money and see where it goes.

    Liked by 1 person

    1. I like Starling, particularly for contactless. You don’t get a receipt for contactless and the irrational monkey-brain thinks of that as inherently less secure, though hopefully the transaction has one time keys and isn’t susceptible to a replay attack with GnuRadio or some such. Starling sort the receipts problem pretty much instantly, so I can enter these into Quicken without having to wait for the statement and tick ’em off.

      Starling also fix the security worries because it’s like PAYG, the worst that can happen is I lose the amount of cash on the card. I have no overdraft facility, though you can get one if that suits your usage pattern. And you can switch the card on and off with the app.

      Did look at Revolut, because you can hold actual foreign currency with their card, which lets you fix the exchange rate. But they failed to ever send me the link to the app given the phone number, call me old fashioned, but I like to see competence in the processes in a bank. Starling managed no trouble, first time. Their foreign currency spending offering is Mastercard variable rate and you don’t get rushed with transaction fees and 2% more fees ‘just because’.

      I’m a fan 😉

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  3. Character is such an important variable here, curiousity to know the different possible ways of doing things, then the mental strength to resist the considerable pressure of your peers and incoming from all sides by the professional persuaders with their various agendas. The list of things you have to get right to be independent is increasing as daily life becomes more complex today: get well-paid skills, market yourself well, get on with people well, resist pressure to ‘fit in by squandering your money’, resist pressure by loved ones to incur expenses to uphold tradition, invest as well as save, live within your means, avoid divorce, etc., etc. So it’s becoming a really tall order, especially for the young adults not seeing a good example in their own upbringing in the first place; luckily though, there’s the net now, where they can find out alternatives exist, like-minded fellow travelers and a plan to go on if they’re so inclined.

    Liked by 1 person

  4. I was guilty of financial muppetry when I was young. I think it was the transition from being a perpetually broke student to someone with an income that short-circuited my brain. I could travel, buy shit ‘just because’, go to gigs and not worry about the cost… Quite a few people seem to have gone through a similar stage before seeing the light. The LAFI (Living A FI) dude is a good example of that, judging from his work experience series of posts 😉

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    1. You lucky sods getting to spend on toys! My muppetry was buying a house. At the top of the market. D’oh. Maybe that saved me from the lifestyle inflation part, and everybody was boracic lint in the early 1990s recession.

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  5. If my kids demand a pet then I reckon a hamster that eats while I sleep is a lot better value than a dog that demands huge amounts of money, time and attention while I’m awake! Chickens are the best though because they’re cashflow positive if you do it right, and there’s always something for breakfast!

    Liked by 1 person

    1. Chickens tend to power down with the daylight so you may still have the edge on having them not eating while you sleep. Unless you extend the laying period with the comically named Rooster Booster which does work to boost egg production, but not on roosters for obvious reasons 😉

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  6. I think the elephant in the room here maybe the fact that Ermine is reading Grazie magazine?

    Is rule 4. for real? Do many people own nocturnal animals and are they causing financial mayhem? Seems like a niche activity to me..

    On the subject of RF security, I’ve just splashed out on a HackRFOne. Will be interested to put it through its paces.

    Liked by 1 person

  7. I was genuinely puzzled by Sian’s ‘plight’. As hosimpson says, most of us go a little nuts when first in receipt of a proper pay packet, but this young woman is 30, sound of wind and limb and with a good education. She knows better than to get a credit card. So how is she managing to kid herself that she is paying rent and ‘trying to help’ with the groceries, when by her own admission her parents are bunging her between £100 and £500 every single month? The reality is surely that, after netting up what she gives them against what they give her, she is living rent and board free (and possibly getting pocket money on top).

    Her father has apparently told her he will ‘help out whenever she needs it’, but how on earth does he think this is actually helping her? She’s not a child ffs! How will she ever be in a position to budget and manage her money like an adult when this sort of enabling is going on? I know it’s very difficult when your natural inclination is to be generous to your adult children, but they need to know the importance of coping properly with financial life. I’m sure Sian would feel a hundred times better and more motivated if she got a grip on her money (doing your own nails and hair colour is not really enough to qualify you as thrifty, imho…)

    Jane

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  8. > elephant in the room here maybe the fact that Ermine is reading Grazie magazine?

    Via the old Grauniad, though I am so unreconstructed that I fear Eva Wiseman’s feminist critique went over my head. Hadn’t realised money diaries are a thing.

    Rule 4 was toned down from the Canadian lady PF guru who said “never take financial responsibility for something that eats” but a) I can’t find the Google reference for that and b) I CBA for the obvious fight, along the lines of MMM’s pet post but with knobs on.

    The HackRFOne looks like a fun toy 😉 I haven’t convinced myself that I understand GRC well enough to get the delay down to reasonable levels in a scientific manner- empirically relating the sample rate at RF to that at audio reduces it to ~.2s from > 1 sec, so I could imagine having a QSO with it. But Lord Kelvin wouldn’t approve of the random experimentation methodology. Maybe I am taking the piss running it on a Raspberry Pi 3 though and using one of those rubbish TV stick RTL-SDR gizmos.

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    1. You can’t really afford not to have a play with an RTLSDR.

      I remember mucking about with one a few years back and getting it to receive AIS (marine nav) data.

      Maybe rule 4. could be fleshed out to the Flies, Floats or F***s one? I always thought that was quite pithy..

      Liked by 2 people

  9. What I noticed with young people still living with their parents is that an entry level £20,000 job with £1,400 pcm take home pay tends to get spent roughly as follows:
    300 – car lease
    100 – car insurance
    100 – car fuel
    300 – socialising, eating out
    200 – holidays saving
    200 – clothes/shoes
    200 – phones, subscriptions & other random stuff
    It’s often not long before monthly credit card payments take another slice. Student loan payments aren’t much at that salary.
    Anyway, for these people to move out of their childhood bedroom they have to move into grotty shared accommodation and find a budget for new costs like rent, council tax, water, electricity, gas, broadband & groceries shopping. They need to put a deposit down and maybe buy some furniture, bedding and household equipment.
    Once you get used to spending so much of your take home pay on “wants” it’s hard to cut half of it out just for the “needs” of living without the parental subsidy, and costs like the car lease payment and iPhone subscription are subject to a long-term contract so can’t just be stopped overnight.
    This seems to me to be the main reason that young people “can’t afford” to move out.

    Liked by 1 person

    1. I really don’t get the whole car lease thang. Round these parts you can get a basic runner with six month’s MOT for about £500, and I’d imagine having something junky might help with the insurance at the beginning. Most rented rooms seem to be furnished, although I recall this was always at a skanky level. But hey, that goes with the patch of starting out, at least saves on the IKEA bill.

      But the biggest win was you get to shag not under your parents’ roof. The thought of doing that still strikes me an a bit outré and eeeeurgh but maybe cultural norms have changed.

      There’s also the issue/effect of running against Rule 5 for the parents’ retirement plans

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      1. Insurance is exorbitant for the young, and its all about 3rd party risk, so having a banger only helps that everyone else stays clear (as I discovered to my delight at 45!)

        Some people just like spending money, some don’t, I’m sure its some hunter-gatherer hindbrain which sent some people out into the woods, while others hoarded bits of wood. Both were needed for the tribe. Not sure you can change that in yourself. My spendthrift friends can always justify why they need to buy the stuff they do.

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    2. That looks pretty spot on, but one minor correction – you won’t be making any student loan repayments on a salary of £20k/year. Repayments are made at a rate of 9% of all earnings above £25k. So someone on £27k/yr will repay £15/month.

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  10. There were so many anti-FIRE triggers in the Grazia article, that I now feel like an experimental rat, frazzled almost to death!

    But hang on, Ermine spends £50 per month on a phone?! Is that the lemon you don’t want to squeeze 😉

    Liked by 1 person

    1. the phone is broadband and landline, and I stick with BT to get Wifi on the move. But I am getting rushed for it. I use Giffgaff PAYG for mobile and BT Wifi for mobile data or do without, but GG doesn’t really shift the needle on the dial. I could streetfight this to get it down, so yes, it’s an unsqueezed lemon

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    2. > so many anti-FIRE triggers in the Grazia article

      Grazia’s a terrific read, in a sort of how-did-we-get-from-there-to-here sort of way. By way of illustration I offer you this article, entitled “This New Change To Wedding Laws Could Save Brides-To-Be A Lot Of Money”. Something about the title is clickbaity and makes me suspect it was written by AI, but what the hell. I’m all for saving brides to be a lot of money. So what is the nature of this innovation? Apparently you can now get married in a place without a fixed roof, which has been a restriction since the days of Queen Vic. They go on to claim

      “the change in rules could help curtail the rising cost of weddings, as it may allow more couples to opt for lower-key ceremonies in cheaper locations; it is also expected to give the hospitality industry a boost by allowing more small businesses to apply for a wedding license.”

      Hmm, unless the number of weddings suddenly increases, it’s either going to be the hospitality industry’s end of the boat goes up or it’s going to be the couples end, my money’s on the hospitality industry’s end going up. It’s sort of scary that they say “average British wedding costs around £30,000”, colour me a cynical Ermine but that’ll probably do nicely as a putative deposit on a starter home. Let’s just hope this 30 grand is saved up or sprung by Mom and Pops and not whacked on the old credit card to chase after the newlyweds like a lost dog for the next 10 years.

      Liked by 1 person

  11. Ah young and foolish. I had a car loan soon after starting my first professional job. My modest sedan helped me meet my wife – a child of immigrants who is to this day security obsessed. That was a life changer for me – in a good way.
    On the flip side, I lived in a rented room until we got married so I wasn’t really living it up on the rest of my salary. I justified my extravagance by the fact I had lived a monastic life at university with no debt, no money. That was nearly a half-century ago and we two lived by the Micawber principle ever since.
    Young people today seem to march to a different drummer. My cruise ship director niece is currently kicking back in Bali for a couple of weeks before she heads over to Singapore to start her next contract cruising the Far East. The cruise line offers room, board, medical care, travel, uniforms. I suppose she’s responsible for swimwear and formal attire. I don’t know how she manages her affairs but she usually spends her vacay at home for a time with Mom and Dad.

    Liked by 1 person

    1. > My modest sedan helped me meet my wife – a child of immigrants who is to this day security obsessed. That was a life changer for me – in a good way.

      You can’t argue with the ROI your younger self invested in 😉

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  12. It is a bit of a struggle to feel sorry for millennials of this particular stripe (well paid but still griping). I know we boomers are supposed to be responsible for all kinds of modern ills which impact their generation, but apart from (relatively) expensive housing it seems to me that the quality of life for Generation X, Y or Z, whichever one we’re up to really ain’t that bad.

    I moved out of the parental home the day I started university in 1973. I did spend the long holidays there, but was earning and paying rent. When I finished uni, my first job paid £2,200 pa. Looking at devaluation of cash since then I find £100 then is equivalent to £684 now, so £2,200 = approx £15,000 now. Hmm… Rather a long way short of £40,000. I rented a room in a house for years, but was entirely self-reliant. I didn’t own a car until I was 24, and a house until I was 33. To get to a position of reasonable financial security I worked in a couple of other countries which paid better than the UK, at 35 took a year out to retrain, worked my butt off to make up for lost time and acquire the skills to freelance, where the real money was. My wife used to get pissed off with me reading technical manuals in bed at midnight.

    I don’t think this is an unusual story for someone of my generation. Millennials, at least some of them, do seem prone to feeling sorry for themselves too easily and do seem to be a bit short on historical perspective and staying power.

    Jeez, what an old geezer rant… sorry!

    Liked by 2 people

    1. Plus ca change and all that. The date – sometime in Summer 1986. The place – BBC Broadcasting House bar, somewhere underground ISTR. A young Ermine was sinking pints of ESB – at lunchtime FFS, those were the days, eh, trying to drown out the noise of tosspots yakking on about how much they had made on their houses while all the time thinking I can’t afford to move out of my crappy one room bedsit with the salt around the perimeter to keep the massive black slugs away, cos you don’t want to step on one of those suckers in the night going to the head. Never mind ever afford to buy a house, anywhere, ever.

      Young mustelid thinks to himself Why TF do the greybeards have all the money in the world and why do they have all this stuff I can’t afford?

      I am that greybeard now. Some things are a constant in the history of the world…

      Liked by 1 person

  13. Of course it’s easy to spend more money than you earn – there are loads of things to spend money on.
    It takes a bit of saying “no” – which a lot of people aren’t good at.
    Anyway, it’s not a particular problem of the young – most Gen X/Boomers have only been bailed out by the rise in their assets over time.
    There are people who have money and save and don’t spend more than they earn – but they aren’t flash and tend to go under the radar – under-FIRE

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  14. When I went to university my father told me that they’d be delighted to see me at home in the vacations. But in the long vacation I would pay my mother £2 a week for bed and board. Seemed reasonable to me.

    Liked by 1 person

    1. The question is, were you still doing that at 30 😉 Probably not, in my day living with your parents much past 20 was a badge of shame, you hadn’t made something of yourself. OTOH, there was a wider range of jobs covering a greater part of the ability spectrum then – Rule 5 is harder now

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