The indebtedness of Czech households is constantly increasing. The largest percentage are housing loans and consumer loans. What do we borrow most often? It leads consumer electronics, then buying a car or motorbike, third place is the furniture for home and last but not least, the money is used for reconstruction. Other surveys show that every third Czech who borrows does so at risk. Where is the buried dog and how to prevent these problems?
Short-term loans, a good servant, but a bad master
Many people reach for a loan without a register almost wisely, even when a small problem occurs. On the other hand, there is no wonder, because it is the easiest solution, but it may not always be right. The stumbling block is often a tight budget.
Soon we will be surprised by a broken washing machine or dishwasher and there is a fire on the roof. No one in the neighborhood can help because family and friends have problems over their heads. What with this? Well, what you can do, so you borrow a few thousand before pay. The disadvantage of such loans is that they are only short-term, so they do not solve the problem in the long run, but only deepen it. What if the next month we are surprised by another unexpected expense and the maturity of the loan. Yes, we can extend it, but it will cost us more money.
Hammering the wedge with a wedge
There is nothing worse than borrowing to repay the previous debt. Think about it and don’t make it worse. Wouldn’t it be better to apply for bank consolidation? Simply put, you combine all disadvantageous financial liabilities into one. Not only will you pay a lower installment each month, but you will also save.
Nowhere are loans borrowed? Contact organizations that help people get out of difficult financial situations. As a last resort, consider personal bankruptcy.
Loan for uselessness
Avoid repurchase goods such as mobile phones and other electronics. Our grandmothers were already saying “Buy only what you can afford”. A simple rule that works great in practice. Be aware that any loan in your life should take you forward and not lower you even lower.
Poor financial habits
How to prevent financial difficulties? First of all, one needs to be financially literate and able to use common sense. It sounds absurd, but a large percentage of us have significant problems with it, and it may be people whose income exceeds 50,000 USD per month. Knowing how to manage money is the very foundation that life cannot do without. Unfortunately, the school system will not teach us to save and treat them so that we do not get lost in today’s world.
Build a financial reserve every month to use for unexpected expenses and do without any loan. Reduce bad habits like smoking, drinking alcohol or expensive dinners in restaurants.
Loan? Only advantageously!
Even a short-term loan does not have to cost you a dollar. When looking for the right provider, take the time to choose a bid that suits you 100%. Sign the loan agreement only if you understand and agree to it.