When the desire to acquire something becomes irresistible and surpasses the awareness of not having enough finances to pay for it, the temptation to go to one of the many forms of credit available It can be very strong In this way, and despite all the warnings from experts, 27% of Spaniards say that they often buy objects or services that they can not afford, according to a survey by Kruk, a debt collection company. The problem is that, in turn, the financing has a cost, which will end up making the cost more expensive. For more inri, if to subsidize the credit other financing is requested, the risk of falling into a debt spiral that multiplies each month exponentially it is real.
Thus, to avoid any exposure to a useless risk, José María López, expert in finance, proposes to analyze if the expense is justified. "In a society as accelerated as this one, it is difficult to have a minute to reflect on it, but responsible consumption must precede responsible credit," explains the author of the blog Todo es finanzas. However, in other cases, how to know if you are over-indebted or detect an overflow of debt before falling into it? Asking good questions (and answering honestly) may be the beginning of a good solution to this problem, experts say.
Do you control your purchases, income and expenses? To avoid going over indebtedness, "planning is crucial"Says Ricardo Camarena, director of operations of Resuelve tu deuda, a company specialized in this field. According to Camarena, the best thing is to record the expenses and divide them by categories: daily purchases, leisure, whims, and others. In this way, you will be more aware of where your salary is going and where you should cut to improve your personal economy. Does the will fail you? A trick could be to ask your bank "to establish a monthly limit on spending on the card," suggests this expert.
Do you have an emergency fund? "A good measure to prove that we have an adequate level of savings is to calculate the amount we would need to live up to six months without working," says Camarena. That money will be reserved exclusively for emergencies. "If we do not have this fund, and the cause is that our debts prevent us from having it, we could be over indebted," warns Gorka Barrenetxea, financial director of iMorosity, an advisory that focuses its activity on cases of defaults. "If as a result of indebtedness, the loss of the main source of income limits to weeks or days the ability to maintain the expense without liquidating assets or borrowing, alarms should jump," says Lopez. 52% of Spaniards reside in households that could hold more than six months in these conditions, but 30% of those living in families with less than 14,500 euros per month could not do so even for a month, according to a survey by the Bank of Spain and the CNMV.
Do you spend less than 30% of your income on debt? If you do not manage to save anything or you do not have enough to make ends meet, "the situation is not ideal", underlines the general director of iMorosity, Mario Mazaira, who advocates applying the rule called "70-30". That is to say, no more than 30% of the income should be destined to savings, entertainment, leisure, or the payment of financing for consumption, and 70% would be spent on basic needs such as housing, food or transportation. "When you allocate more than 30% to the payment of your debts, excluding mortgages, you are technically over-indebted," Camarena summarizes. An opinion that Lopez does not share. "This rule only intends that there is room for maneuver on the part of the debtor if setbacks appear, such as family crisis, dismissal, low salary, illness, rise of the indices in variable rate loans, among others; but it does not necessarily indicate over indebtedness, "he says.
Do you have debt only with one entity? "It is not advisable, even dangerous, to get into debt with more than two financial entities," Mazaira says. The reason is simple: we would have bills to pay with different interest rates, different durations, and various types of commissions. Managing all this would be very inefficient. "The solution could be to unify the financing in a quota in the same entity," advises Mazaira.
Do you pay your expenses without financing? Solving short-term financial problems by compromising equity in the medium and long term "is usually the biggest mistake," says Mazaira, who also strongly discourages the so-called financing at zero cost, or the payment financed without interest. "In most cases, they have expenses of opening, management and formalization, and are used for impulse purchases, unnecessary," he says. For López, we have to think very carefully about which option is more convenient at each moment, whether to pull savings, cover the entire cost of the good or service through a loan, or combine both.
Is the fee for your card higher than the minimum? If you buy with a credit card, "it is important to cover all the consumption made when the term expires, so as not to generate interest," says Camarena. If you decide to pay only a minimal fee, "it will take longer to settle the total account and the debt will grow according to the interest rate agreed with the bank ", adds this expert, for whom you should not use more than 10% of the salary to pay the credit card. "If you are paying more, you should review your consumption habits, establish a financial plan that suits your lifestyle, needs and, mainly, your income," he adds.
Do you know how the interest on the card is calculated? In Camarena's opinion, it is important to keep in mind that interest does not apply only to consumption that was left without coverage, and to know two concepts: the monthly interest rate and the average daily balance. "Both appear in the account statement," he explains. "To calculate the first, the annual rate must be divided by 12, while the average daily balance is the sum of the amount that is due to the bank daily in the period marked, divided by the number of days of the same, in such a way that the result of the monthly interest rate for the average daily balance is ordinary interest ". To all this, to know what the bank charges when you have a debt, you will have to add the VAT on the ordinary interest plus the commissions on the card. Hence, it is important to know what amounts your entity requires for cash withdrawal, or lack of payment or replacement, among other concepts.
Do not ask for money to your environment? As in the case of financing, "you have to ask for money from a relative or friend clearly indicates that we did not cover expenses," says Barrenetxea. If this happens and you also get letters from banks claiming payments, you should realize that you are over-indebted.
Do they grant you loans without problems? Access to financing may be limited for different reasons: "You are in a file of defaulters, the operation does not seem viable due to the characteristics of the client depending on the amount requested, or you already have too many financing for your income level", highlights Barrenetxea. In this last case, you are over-indebted.