Psychology of money: 1

Financial folly, money mindlessness and un-calculated cash. Welcome to 31 days of money musing. Given that my own preference is for a complete avoidance of the topic, this may hurt. Money tops the list of things I’d rather not think about. I’m deeply grateful that this is a luxurious indulgence in and of itself  — though there are the routine dangers of all Ostrich-like behaviour … trouble may be lurking of which I’m currently happily oblivious.

The question running through out this series:  what is the nature of my psycho-financial tendencies and what are they costing me?

Day 1  – Tomorrow I’ll find out whether I am in a little, a lot or no trouble at all in connection with filing UK taxes.

Normally I don’t need to do any paperwork. My finances have been simple – just one form of income against which taxes are deducted monthly. But I am no longer so administratively blessed for I now have a 2nd form of income thanks to renting out my flat. It’s hard for me to think of this as “income” since I don’t live in my flat, I am busy forking out rent to live somewhere else. The rental income doesn’t, according to my own personal balance sheet, produce any profit – I pay more to live elsewhere. But income is income to the tax man so I need to report the details of it and pay up.

Naturally I leave this exercise to almost the last possible moment – it’s a victory that I’m even mindful of the deadline in the 1st place. I procrastinate since I’m certain I’ll be asked to provide a host of information that I don’t have to hand and given my lack of financial admin won’t know where to find.  When I finally reach the week in January where I can no longer avoid facing my taxes without graduating to the next level of denial, I go online and start to follow the instructions. I don’t get very far. I’m asked for a personalized user number required for completing online assessments. I call the help line and am informed that it takes several weeks to get this number by which time I’ll have missed the tax deadline.

Welcome to screw up number 1. There’s a reason I don’t face up to things financial. It’s stressful.

The potential cost of procrastination is that I’ll be charged late penalties. Fortunately the woman on the other end of the line comes up with a neat solution. (I often find the authorities treat me kindly when I start the conversation something like, “Oh hi, I’m hoping you can help me – I have totally screwed up.” This hands over to them the power to be my saviour or my executioner – something all petty authority relishes.) Anyway – this nice woman tells me I should guess how much tax I owe and send in that amount immediately so that I won’t be charged interest on what would’ve been late payment. This I do. I attribute this impressive level of follow through to the fact that I’d already geared myself up to devote the next several hours to finally facing my taxes and it turns out that I’ll have to wait now – so I have left over energy to spend the next five minutes writing a check, putting it in an envelope, finding a stamp and throwing it into the nearby outgoing post tray from which other people take over delivering it.

But what happens next? About a week later (not the predicted several weeks) I receive an envelope in the post clearly marked from the tax authorities. We can assume it contains the personalized code I need to file my taxes. Being me, I don’t open the envelope. The energy I had saved up has dissipated and who knows how long it will take before I summon up the will power to reconvene it. And now it is May. For months I’ve carried around the officious envelope every day without opening it. An act of defiance and stupidity no doubt.

Tomorrow (of course tomorrow and not today) I’ve SWORN to myself that I’ll face up. I have no idea whether I shall be successful in that I have no idea if I will forget to do this, again. I have no idea that even if I remember and do it, if I will be asked for financial information of which I’ve haven’t a clue. Therefore tomorrow is fraught with realities I’m not well-equipped to handle. I’m already rehearsing what I will have to confess to the helpline.

In my defense the reason why I refuse to do this today and am giving myself until tomorrow (aside from the obvious tendency to do this quite a lot) is that I am on holiday today and not at home and therefore have no access to whatever paperwork I have shoved into various piles (hopefully). Also I have this catch 22 policy. I never force myself to attend to admin that might cause me alarm during evenings or weekends when should I decide to take immediate action and call a helpline, no one would answer and then I would have to live in sheer panic until daylight or the work week. The catch is that weekends and evenings tend to be the only time I actually remember that I’ve outstanding administrative responsibilities that may be conspiring to cause me serious problems should I avoid them any longer. They never cross my mind during the working day when I’m too busy working to think about my own personal admin.

Which is exactly how I manage to remember every day that I haven’t done the thing I swear I’ll do tomorrow. I only remember too late in the day or too late in the week. I only remember when I’m “relaxing.” I’m hoping that since I’ve made a public commitment, tomorrow will be different.

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