The amount of Poles’ indebtedness is not a glorious thing, despite the fact that this problem concerns a large number of developed countries and in a rather twisted way it can testify to a general, high standard of living. Unfortunately, for some, taking out a loan or credit is the first step to a spiral of debt and falling into financial ruin, even if the loan amount was small. The cause of many of these problems is the inability to manage home finances. So how do you calculate the capacity of your monthly budget safely and how do you ensure that your monthly installment is not an insurmountable problem?
Writing everything down is the basis of management
Human memory can be unreliable, and in the multitude of daily activities, shopping and paying bills, it is very easy to get lost in expenses and not distinguish between those necessary and extra and unnecessary. Not writing down receipts (if they come from many sources) and expenses, even the smallest ones, is a fundamental mistake of most Polish households. However, this is not due to a lack of economic capacity, because to determine how much it seems per month, you do not need to perform any complex mathematical operations. A simple table in a spreadsheet is sufficient, and it can even be a sheet of paper and a pen. Persistent people can set up a special notebook so that they can create a budget statement from many months and get a broader perspective.
The list of expenses highlights unreasonable decisions
Summary of monthly receipts is simple, especially if we receive a fixed remuneration for work. Even if there are additional sources of income, e.g. from renting a flat, occasional work or selling small household items. Anyway – they are more or less fixed amounts.
The situation looks worse with expenditure and in order to realistically assess the outflow of cash, it is necessary to categorize them properly. It’s good to divide them into several subgroups:
- fixed expenses that cannot be saved or little can be saved – rent, bills, school fees, other credit obligations;
- fixed expenses, on which sometimes large sums can be saved – food, clothing, fuel, home maintenance;
- pleasure expenses;
- unforeseen expenses – of course, they cannot be well included in the household budget, but you can search all household appliances and determine which of them in the near future may need to be replaced;
- future, planned expenses – weddings, communions, children trips, holidays.
This way you can see how much money is left in your wallet monthly after paying for everything. If it is enough to install the loan that we plan to take, and even a small security buffer remains, that’s great. If not – you can opt out of the loan or try to raise funds in a different way.
Cost cuts are not always felt
Writing down amounts of expenses will allow you to see one very important thing: too high amounts for at least one item that you have not noticed before. If we spend too much on food, it is worth considering whether we do not buy it in too much (and then throw it away), too often we shop in small, local shops, where prices for products of the same brands can be much higher, we buy too large packaging that we do not use to the end. The problem, not only in this case, is unnecessary consumption: buying a large amount of clothes that then lie unused in the closet, too much unnecessary cosmetics, basing your nutrition on very expensive, ready-made products (instead of cooking yourself).
There are a lot of such small sins and they can make up a considerable sum per month. You can also consider excessive use of the car in any situation, even if you go to a store located 500 meters from the house, try to convert it to public transport or cycling, etc. The room for maneuver is unlimited, especially where the amounts of expenses are extremely large .
A wise choice of loan – half the battle
The offer of loan companies is very diverse and you can easily choose the one best suited to your needs. For some it will be a payday loan, for others an installment loan – both have their pros and cons. So let’s spend some time thinking about and recalculating this issue. It is certainly not worth, however, when choosing a loan be guided by emotions or impulsiveness, especially since everyone can take out a loan, even a person in debt. So you have to be patient and think carefully about the type of loan, its costs and your creditworthiness – the article ” ABC of the borrower: how to choose the loan amount and repayment period?” Can tell a bit about matching the financing to the needs and possibilities .
Life is not about being afraid of any form of financial commitment and avoiding credit or loans like fire. These are very useful financial products, if you are responsible. Therefore, it is worth being strategic and supervising your budget before sending the application and final signing of the contract. Unfortunately, looking for savings and rationalization of expenses when it becomes short of repayment will not save the situation. In addition, saving, which is forced by a difficult financial situation, will never be beneficial for the borrower, as it will always have connotations with an uncomfortable, stressful and very onerous financial position. To be effective, it must become a habit – so you should start thinking about a financial pillow and systematically save small amounts. In this situation, even more tight in one month the budget will not be terrible and you can avoid the unpleasant consequences of non-repayment.