Relatively often, the topic is: Hungarians are indebted. Many believed that as a result of the global economic crisis, the borrowing habits of the Hungarian population would change, wastage as a credit would be removed from the repertoire and more and more new loans would be raised consciously. Today, we can see from the figures that the population has been the maximum. It’s been a while and people are making the same mistakes. Practically, the Hungarian population has begun to indebted again!
In the article, we are going through the process of indebtedness and the dangers that can drive us into the debt trap.
I live better and spend more. Then I live the same way I spend more
Every debt trap begins with the hope of a better life. So when the individual decides to “deserve” something and tries to achieve it beyond his own resources (credit). This demand is typically born when we enter a “higher income” band and suddenly we cannot start with our income.
So it has spread in the public consciousness that only the needy, the poorer people can get into a debt trap. Debt traps are just as dangerous on paper for those with higher incomes. In this article, they will be explicitly about them, who are in debt spirits that they had everything on paper for a normal life.
The whole process
its essence is based on the needs expressed. When we start looking for more, we want to allow ourselves to do more and more. However, this is never a rational decision but a satisfying need. I know a lot of people who, coming from an average or poorer environment, have begun to look far above average and have a particular urge to always buy something (what they need or do).
Do you own a TV, and do you buy an ultraLED TV?
There is no stopping point at one point and after we have fully devoted our savings to our increased income, we have no choice but to turn to the bank and take on various loans. Credit institutions and shops are playing our “hands”, as they are constantly beating the “better opportunities”.
Since the demand has already been formulated in us and there are these offerings, it is only a matter of time to sign the debt spirits in a weak moment.
Many don’t think about it
The obvious fact is that when, for example, they choose a TV for themselves, they actually buy two models. A TV for themselves and a lot better for the bank. But how is this possible? Literature calls this “paid interest”, ie the cost of using the money borrowed from the bank. Optimally, with the help of the bank, we can spend the money we are looking for in the future.
This is a reasonable and logical step, for example, when we change our apartment on favorable terms for our own apartment. Or when we buy a more useful, more suitable car for ourselves. Or, when a vital device (eg washing machine) goes wrong and needs to be replaced immediately.
It is less obvious that we are buying things that are totally unnecessary, that do not contribute to our lives, because we are unable to raise the necessary capital in x months. However, the monthly capital (savings vs. monthly repayment) is at our disposal. Everyone has to decide whether to put this available capital into their own savings or to spend on monthly repayment.
What makes a harmless loan a point of debt spiral? Are the Hungarians indebted?
The answer is already in the question. People rarely stand for a loan after they have grabbed a “better life” taste . In addition, the need for a better life is “justified” by the higher or higher than average income and the “because I deserve” factor. Debt spiral is prepared by accumulating credit for credit, what we do with the process,
by then, the monthly repayment of the loans will completely consume our income.
It is very difficult to get out of the debt spiral because, on the one hand, it should be abandoned from the lifetime established until then, and on the other hand it can be very little beyond one point. Because what are the basics of a real debt spiral? We use the bank’s money to do things that do not create value, make money, and lose value at the moment of purchase.
Such things are typically electronic devices, clothes, regular food, or traveling from credit. Neither of these can, if necessary, “get rid of” at the right price and get something back from the waste of money. Mortgages are mistakenly named as the most dangerous item of indebtedness!
In reality, many of the “little items” that cause a financial crisis, because we could “get rid of an apartment in time” and represent a kind of wealth. Now look at a note from 2009 about a client where a husband-wife + mother-mother took part in the structure of the debt spiral, and four of them were able to show the total family income of nearly 600,000 forints at that time. What do you think caused their loss of hope?
The truth is that the picture is further shaded by the fact that they lived in the family house for 4 (two generations), so we would have to deduct the theoretical amount they would have to pay if they were not living in their own house, out of the 139,000 HUF repayment. but both in a separate sublet. So it is an amount to be paid in any way.
How can you avoid debt?
Now I write to you a list of ideas that you can take to avoid debt spirits that you can never clear out and accumulate bank interest instead of saving.
- If it rises a. your financial system (How do we train a financial reserve?)
- From this point on, you buy only value-creating things from credit. Attention: the bigger tv is not value-creating!
- If you want to buy something “no value-creating”, you will put aside the minimum amount you would have to pay each month instead of credit. Once the money has accumulated, you will buy what you want from yourself.
- You are not a speculator, so you strive for “guaranteed installments”
- You forget the “because I deserve mentality” and instead of “how much should I work” mentality. Immediately!