The economy of our country is a special case at least 5 different exchange rates to represent the same coin, inflation ascent, stories close to “yard” “planchette” ministers of economy and changing other oddities that can only be understood by those who live in the flesh this rapidly changing reality. With such a scenario, money issues are on the agenda, along with stress and daily challenges this brings. Beyond the context, there are mistakes on personal finance that can be avoided.
We will now see what the most common mistakes are:
1) Use consumer credit extension as an income
It is very likely that the reader’s received in recent months a call like this congratulations, the bank informs you that you have at your disposal a personal loan of 15,000 pesos to remove your branch at any time. Offering credit is music to the ears of the person having trouble making ends meet, and is often mistakenly seen as an extension of current income and temporary cash problems solution. Unfortunately, far from being the solution this is usually the start of a bigger problem.
The stock of personal loans almost doubled in the past two years, from $ 58,100 million at end-2011 to $ 75,000 million at the end of 2012 and $ 98,000 million at 20 December, according to data provided by the Central Bank. Payment plans in installments together with advances in consumption by families to keep up with price increases made, on average, each family must just over two months of their income, raising defaults in the sector finance as the real wage depreciates.
Now, is it appropriate to borrow in inflationary times like these? Answering affirmatively is to fall into generalizations that can prove a costly worker in his pocket. Banks seek charging cover inflation rates reflected in the borrowing costs that often can rub the 3 digits, making the debt repayment becomes difficult in most cases. Variable rates on loans also are also on the agenda and the same usually fit the beat of the rising prices.
Credit to the rare time consumption can be achieved at subsidized rates, which itself would be a chance that charges will “liquefy” with the subsequent increase in prices in the economy. For a better “financial health”, making personal loans should be analyzed only in very specific situations, and neglected in most cases.
2) No savings
Today, most people spend almost all of their income to personal care, food, footwear, clothing, technology and recreation. That is, there are very few who decide to save. Those who see the months pass without generating surpluses on expenditure or, worse, are increasingly indebted somehow seduced by consumerist model that holds up the engines of today’s economy, they know that, even to try to convince excuses, there is something you are not doing correctly and that at some point they must pay the party.
Distressed by this solves nothing, while separating between 10% and 15% of revenue every month and destine savings, methodical and disciplined manner, may instead help greatly in the transformation to a panorama more personal financial responsibility.
In the United States, a program called “Save USA” with the idea that low-income people to experience firsthand the benefits of saving was created. To achieve this, people are encouraged to put part of their income in a savings account, and for every dollar saved will receive an additional 50 cents on the condition that they keep the money for one year at least.
This means that if the refund is $ 1,000, receive an additional $ 500 which is equivalent to a yield of 50% and this should be added the interest earned. Such policies appear as something very distant in our country where rising prices and limitations to buy dollars only serve to convince people (wrongly) that saving does not make sense in an economic context as the current.
3) Believe that the government or the employer must deal with our finance
According to data from the Pan American Health Organization, life expectancy in Argentina increased by 27 years in the last 100 years is now 75.7 years old when in 1914 it was 48.5. The result in terms of our personal finances is that we plan our domestic economy for a longer period of time.
Believing that pension contributions discounting us month salary is enough to fall into a delusion meaningless. If the vast majority is already complicated “survive” the current income level, imagine what it will do with the half of it. The standard retirement as carrot fails any of the possible scenarios is likely to retire when our retirement payment depends on how global finance is.
Against this background, build and self-manage our savings remains a possibility to become an obligation that every responsible person should start practicing, sooner rather than later, to improve-or worst-maintain their standard of living current throughout its existence, even after retirement.