Thursday, 15 August 2013

Is the Credit Crunch Just a Great Big Myth?

The Frugal Revolution

Is anyone really feeling the pinch of the credit crunch or is 'the credit crunch' simply something dreamt up by politicians and fed to the nation via the mass media so we spend, spend, spend on luxuries and leave very little for the bare essentials?

Who are the poor and where are they? Can they afford computers or access to the Internet?

Unpacking boxes, I came across some paperwork from the 90's and started flicking through it to take a look at some of the prices from back then.

2013 - I live in a fairly rural location but still have a 2Mb broadband connection round the clock for a monthly fee of around £25 including my BT line rental. That allows me (or any guests) to connect wirelessly, if we have devices with such capability, and I can buy anything from anywhere at the touch of a button. I'm blogging from my pink 'notebook', which has 6GB of RAM and a 2.5GHz processor - this part means absolutely nothing to me. The laptop comes complete with full colour screen, graphics, video, CD/DVD, inbuilt wireless modem, camera and microphone plus a whole host of other stuff. All I do is switch it on and I'm online and virtually working, shopping, checking my bank balance or reading the news in minutes. It cost less than £400.00

1994 - The year we got our first computer, but I think it took us three years to pay for it! Need I say any more on this subject? (Please note this is not a photo of the computer we bought, it is just to draw a comparison between then and now - a duration of almost 20 years.)

Yes, readers, that really does say £2,375.00 + VAT for colour and on top of that was another £99.00 + VAT for a 9,600bps fax modem, monthly BT line rental, monthly Internet membership fees plus, if I remember correctly, we were charged around 4p per minute for going online to surf the World Wide Web. It was very limiting, as not many people I knew were online at that time.

It took until after the release of Windows 95 for me to actually get around to posting stuff online, opening my first proper 'store' in 1998 in a bid to try and offset the costs of being online in the first place.

As someone said to me earlier today, "We adapt and evolve... after a couple of years it becomes normal."

What lesson did I learn from looking back at my own past? For a start I learned that had I held off and saved to pay cash, rather than buying the computer on interest free credit, then I'd have had a much better computer for far less money!

By 1998, it cost me £399.99 for a new desktop computer. By then, Internet access had reduced to 1p per minute plus a monthly fee of £19.99 (plus your BT line rental).

The moral of this story is... Technology moves much faster than credit agreements.

There's more to come!


  1. But there are any number of articles published saying that "technology" has come down a lot in price in real terms - and indeed it has. BUT...stuff really is going wrong with the economy and it would appear that the ones worst affected are the OAP agegroup (because their income is more likely to be going on basics like food and they are much less inclined to spend on "technology" or other possessions). Also this is the agegroup most likely to have savings and, again, they are paying (literally) for the state the economy is in (due to virtually non-existent savings rates).

    1. Ceridwen, what can't pensioners afford at the moment and what is someone like me likely not to be able to afford when I get to State pension age, assuming there even is a State pension still available in another 20 years or so?

  2. Absolutely it's not all bad news, although there are those who would tell us otherwise.

    Sft x

    1. SFT, I fear for those mortgaged to the hilt on low fixed rates when those rates start rising - and let's face it, interest rates have to rise at some point in the future. My guess is, we'll see many feeling pressurised into re-mortgaging over even longer terms, just as many of us had to do when the endowments scandal erupted, leaving people facing mortgage payments well into their retirement, which is just crazy! It's the whole debt thing - ordinary, law-abiding people are encouraged to borrow and spend but then take the full backlash if things go wrong (job losses, illness, starting a family etc.) while huge multi-million pound corporate (or Government) losses can be swept under the carpet and then those debts mysteriously wiped, but at whose long-term expense?


Many thanks for taking the time to comment. All comments are moderated to help prevent system abuse by spammers, time-wasters and chancers, so your comment will not appear until it has been manually accepted for publishing. This will be done as soon as possible - I check for updates regularly. We are on GMT - London times.