How does a trained accountant get into debt?
A short guide on how to waste a fortune:
In a previous life I used to work for one of the Big four accounting firms. The work was tough and involved long hours. Fortunately the days often went quickly as I was surrounded my many young, intelligent, like minded and enthusiastic individuals. However, it was one of these individuals that shocked me!
Her name was "B". At the time B was the year ahead of me in earning her accountancy qualification. As a result she was qualified and hence was earning roughly £40,000 per year - a very good salary in London, especially considering that she was only 24 or 25.
B was a nice girl and we got on well. We'd often chat during a brief lunch break about anything. It was during one of these chats that she revealed her shocking revelation. B was worried about the fact that she hadn't paid off her credit card bill and was in debt to the tune of £3,000. This amazed me. Here was someone who is a qualified accountant. She's supposed to be someone in society that's trusted with money - big Company money! She's supposed to understand what generates cashflow and how debt sucks away cash flow. She was earning decent money.
Contrary to what you might ordinarily think I was initially sympathetic. I asked her how this had happened. Was her rent particularly high perhaps? No. It turns out she didn't pay rent. She lived at home. How on earth does a young woman who lives at home, pays no rent, no bills, no food costs accrue debt when she nets roughly £2,750 per month. What on earth was she spending so much money on?
It turns out that she loved shopping and would buy new handbags and items of clothing each month. She bought lunch every day spending almost £10 per day and ate out 4 or 5 nights per week. On top of all of this she went on lavish holidays multiple times per year.
Want to learn how to spend money then just follow her lead! It's ridiculous that she was able to waste so much money. She was oblivious to the cause of her money issues. The poor woman will unlikely cope if she ever leaves home. Then again, she is very unlikely ever going to leave home. This is a real spending disaster story. Let the lessons speak for themselves.
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