End Debts Once and For All

Well, okay, I know that not all debts are bad, a mortgage loan for the purchase of a house or a loan to study a master’s degree and train you, in general, you could say that they are “good debts.”

However, those destined to buy unnecessary things and that also have high interest rates are simply horrifying, if you want to have healthy bonds and freedom in your life .

 

The higher the interest rate and the longer the debt has

The higher the interest rate and the longer the debt has

The more money you lose without getting anything in return, and gradually your financial freedom, your peace of mind and, therefore, your quality of life is reduced.

The money that you are dedicating to the payment of the debt, is money that you could be using for much more productive aspects for you, for example:

  • Save to start a business
  • Save for your retirement
  • Save for the trip of your dreams

Being in debt brings another huge risk together. You can spend months paying religiously, and any disaster will return you to the start box, be it the loss of work or a car breakdown, during the duration of the debt any small thing that goes wrong will start you again.

The key point, to understand what it means to borrow, is that debts do not really cost money , or at least, that is not their main disadvantage, but the loss of freedom and the high risk of entering a vicious circle of debts to get out. of other debts.

I have already put fear in your body. Now we go with the solutions.

 

Avoid entering the Vicious Circle of Debts

Avoid Debts

To avoid entering the circle of debts, the best thing you can do is:

Build a Small Emergency Fund

A fund that allows you to meet the unforeseen expenses that arise. It does not need to be very large, it will depend on your situation, but with about 1,000 euros it should be more than enough.

If you are in debt, make the minimum payments and use all the savings to create this emergency fund.

Once created you will be able to direct all the savings to the payment of the debt and you will end it quickly and with the added peace of mind of having an emergency fund that protects you from unforeseen expenses.

Please, DO NOT touch the emergency fund , it is only for unforeseen expenses, not to buy you such a beautiful dress or go to dinner with friends.

Also do not use it to pay debt, this emergency fund is your life jacket against the economic problems that may arise.

In this way you will avoid falling into the vicious circle of debts.

If a misfortune occurs and you must spend part, or the total, of your emergency fund, stop the extra payments towards your debt, and rebuild the emergency fund again.

Don’t forget, the emergency fund has priority over paying debts .

 

How Can You End Debts?

How Can You End Debts?

Now let’s see how we can get out of debt, in the fastest and easiest way, for this it is very important that you do:

A Plan to Pay Debts

Write down all your debts, sort them by interest rate (from highest to lowest).

Once the minimum fee has been paid on all debts, the savings should be directed to the debt with the highest interest rate , once this debt is finalized, go for the next one and so on until it is debt free.

This is the most economically efficient way, since we first eliminate the most damaging debt, the one with the highest interest rate, ultimately paying less interest.

However, psychologically it can be more profitable to order the debts according to the amount that remains to be paid from each of them, of which less amount is left to the one that more, in this way, we will see in a much faster way as we are taking off debt, which helps motivate and stay stronger .

Do not forget that personal finances, in many cases have more personal and psychology than finance, and everything that helps motivate you is welcome.

Where does the money come from and where does it go? | Bank Loans

Money exists only because everyone believes it exists. So if we all started to believe that bananas or bitcoins could pay for our purchases, we would start collecting them and claiming them in return for work.

From the individual’s point of view, money comes from work and you should not leave it to the bottom of your wallet. Saving secures your future.

Why do we even spend money?

Why do we even spend money?

Ever since people have exchanged, for example, cereals for butter, there has been a need for some kind of mutual trust, which allows for the exchange of goods without knowing the other party personally. Since everyone believes that money brings goods and services, it is possible to exchange even unknown people. At the same time, one can specialize in individual professions. If we didn’t trade anything with anyone, everyone would have to be equally adept at growing tomatoes for building a house.

On the other hand, if we did not have a single currency in use, every day we would have to remember an immeasurable amount of different exchange rates. If you specialize, for example, in philosophy lectures, you would pay the store at the box office telling what Plato and Socrates were thinking. The shoe merchant pays for the shoes, the owner of the dairy farm for milk. So the average person should remember how valuable milk is compared to shoes, philosophy lectures, or anything else. The soup would still be confused if the milk was spoiled, the shoes would wear faster than those made by another shoemaker, and the lecture on philosophy would be long-winded. In addition, a shoe retailer may not want milk right now, and those interested in a philosophy lecture may not be found nearby.

A solution to this problem was found by tying the value of money to something else, for example squirrel skins, gold or silver. Although precious metal was a means of payment, it was accompanied by banknotes, which were receipts of deposited gold. During World Wars, states issued extra banknote money to finance their warfare. This increase in the amount of money broke the link between the value of precious metals and banknotes. However, the attempt was made to restore the value of money to gold and silver without success – nominally the connection was cut off in the 1970s.

Indeed, money today is mainly about trusting a debtor, such as an entrepreneur or a private individual, to pay off their debt through profits or wage income from goods or services within the agreed time. Finally, money comes from believing in the future.

How do banks and the central bank report to this?

How do banks and the central bank report to this?

Money comes from banks granting loans. It is a common perception that banks only lend exactly what they have in store somewhere. However, this is not the case; banks hold only a small percentage of the money they borrow. How on earth can bank loans get out of nowhere? If I have a drill to a friend, I need to have a drill before I can lend it.

The bank must keep 10% of its reserves, which in practice means cash or deposits with the central bank.

  • Someone goes to the bank to deposit 1000 €, the bank keeps 100 € or 10%.
  • The bank lends € 900 to someone else.
  • When the loan is repaid, 10% of this, or € 90, is left in the bank and the remaining € 810 is borrowed. -When the € 810 loan is repaid, 10% or € 81 is left in the bank and € 729 is still lent.

Thus, if the reserve requirement is 10%, banks can increase the amount of money tenfold. The reserve requirement may also be another percentage. So the money comes from the bookings on the bank’s balance sheet.

The system works because not all bank customers will demand their money from the bank at the same time. Have you ever heard such a saying: You can’t keep the cake by yourself and eat it at the same time? The saying is not true in this case, because the retail reserve system allows you to invest money efficiently and productively, but also to use it when needed. The downside is that the bank would go bankrupt if everyone wanted to withdraw all their money and clear all their debts in one second. However, governments guarantee bank deposits of up to € 100,000 for individuals.

Individuals handle loan and deposit issues with a commercial bank, while commercial banks handle the same with a central bank. The central bank regulates the amount of money in a country or group of countries and maintains price stability. The central bank can influence the amount of money lent by banks by raising or lowering the key interest rate. They can also control bank lending and lending for short-term bank needs against collateral.

Banks therefore need to assess the likelihood that individuals and companies will be able to repay their debts. If the bank makes a mistake, it is responsible for paying the debt. However, governments and central banks can sometimes help banks.

How is it possible that the whole system has not collapsed?

How is it possible that the whole system has not collapsed?

However, the average person does not have to worry about losing their money at the bank as it is still the safest option to keep money for deposit protection. Banks have been doing the same for hundreds of years. Money comes and goes as before.

Economic growth is ultimately based on the belief that everything will be better in the future. This is possible when new and different inventions are made and efficiency is increased.So far, there have always been new inventions. Governments, communities, companies and individuals are investing in scientific research and other innovations.

Sometimes a new invention has been a bakery on the street corner in a better location, a steam machine or new packaging material.

 

Save time and money: tricks that will change your life

At Good finance we are determined to help you save time and money, even if you are sure that you cannot do anything more than what you are already doing to have your expenses and your day to day controlled. There is always a little ‘trick’ that escapes us; a gesture that can avoid us a few euros; a change of attitude that seems insignificant and is not …

But first of all, do you know how much you should save per month? So that you do not calculate ‘by eye’ a figure, we remind you that in an old article we already calculate that percentage, which is specifically 10% of what you earn in your work per month, according to this document from the Aviva Institute . Do you already have that figure in mind, in your personal case? Well, now we are going to help you make it an attainable goal and without hurting. We promise.

To check your progress, remember that with Good finance you can instantly see all your accounts in one place. So you can control the impact of your daily decisions on your bank account … Surely you will be surprised to apply any of these tips.

The battle starts at home

The battle starts at home

Back in the 60s Dionne Warwick sang that of A house is not a home: a house – its walls, its furniture – is not a home. What the song meant was that your flat (or your mansion) is much more than the place where you sleep before getting up to go to work day after day. An important part of your income goes to your home: from rent or mortgage to electricity, water or gas bills; sure, have the fridge full …

Nor do you have to go out of your way to have a mistake one day, but don’t make small wastage a habit. What things can we do to do what we spend on ‘living day to day’ more bearable? Here is a short list of suggestions:

1) Control your energy consumption. Forget about the ‘stand by’ mode and turn off everything you have the possibility to turn off every time you leave home. Every appliance that we leave plugged in, but not completely turned off, is a waste of energy that you will pay on your bill even if you do not consume it.

2) ‘Robotize’ your house. Surrender to home automation, which technology makes your home smart. Find out about the possibilities you have, always asking within your community of neighbors, and considering installing systems to – for example – control the lighting in your home, the thermostat, security alarms … Companies that are dedicated to this sector are grouped within LonMark Spain; Check the website to see what services they offer.

3) Have your house tidy. We already know that everyone has their order, and that chaos can sometimes be wonderful, but we are talking about procrastinating. The truth is that if everything is tidy, it is easier to organize: if we talk about the fridge, if everything is where it has to be we will see what things are missing. If we talk about your work table, get some good filing cabinets, or failing that, a paper shredder and leave it diaphanous. You will be faster and more effective in your tasks if you do not have distractions around you.

4) Be reasonable with your closet. Maybe you miss those children’s times when every morning when you woke up, the clothes you had to wear to go to school appeared magically. Now that you choose (and buy and wash and iron) you, do yourself in favor and do it the night before. Even better: spend half an hour every Sunday to choose what you will wear the following week. You’ll save time and freshly raised neurons, believe us. In addition, from time to time, go removing that jersey that you do not wear or those pants that no longer fit you and donate it, give it away or sell it online.

5) Put your washing machine well. Not that you’re accusing you of anything, but have you carefully read the instructions for your washing machine, label your clothes, your detergent? … Any stain out at 60 will make it to 40 and also have two laundry baskets Dirty (white and colored) will help you make your laundry more efficient: you will save water, energy and detergent.

6) Buy in bulk. We like great offers, especially when filling the shopping cart, but we must be aware that the 2 × 1, 3 × 2 offers, or the second unit at half price are only useful in non-perishable products; They are suitable for everything except fresh produce. You will prevent the food from ending up in the trash and you will save an average of 60 euros per quarter.

7) Dismantle your breakfast. It is one of the most important meals of the day, but you should not spend more than 15 minutes. You have to do with your fridge and your pantry the same as we have suggested for your closet: try to have your breakfasts planned in advance to be able to ‘make up’ them every morning without spending too much time. The rituals leave them for the day you don’t have to get up early.

8) Coffee, better made in your home. We already told you in another article: to save it is better that you buy a good coffee maker than depend on the bar of your work. A coffee from Monday to Friday is around 10 euros a week; per month you are spending about 40 euros on coffee. A year, about 450–500 euros. Buy yourself a coffee that you like and take home made: that way you will pay about 10 cents for coffee. Much more bearable, right?

9) Wash the dishes after eating. Well, nobody wants to wash the dishes after eating, but if you do it immediately, this task takes less time. And if you have a dishwasher, rinse your dishes and stack immediately.

Team, team, team

bank

We’ve talked about things you can do to save time and money in your home, but what about work and routines? There are certain things you can do to be as effective as possible and make the most of your time. And what about your savings …

If you don’t want to get involved in addition, subtraction and operations to control what you spend and where you spend it, remember that that’s what Good finance is for . Every movement is registered in your accounts and if you are not an example of constancy when collecting purchase tickets, our application will make your life easier.

10) Learn to say ‘no’ when it comes to your time. Flee from unproductiveness and loops that lead nowhere. If you get stuck on a task or an argument, get away from it and take it back only when you see yourself prepared. If you see that you don’t get anything, ask for help, but don’t get caught.

11) Advance your watch a few minutes. It’s a simple trick, but it really works. Not only is it useful for those who have punctuality problems: those extra 5 or 10 minutes you give yourself can make the difference between a good and a bad decision, and that is priceless.

12) Call, no whatsapees … But the messages sometimes do not arrive, or are deliberately ignored. If you need a quick response, call; Do not write. A little message can wait, but a call indicates interest and urgency. This will make you more decisive in your efforts.

13) Order online. If you know that you are going to eat out, why don’t you place the order before arriving at the site, along the way? In more and more establishments there is the possibility of ordering electronically to save queues. Do not miss them; you never know how hesitant that one is going to ask before you do.

14) Your phone, your post it. Since you have that 200,000 megapixel camera on your mobile, why don’t you use it to store small reminders? Notes, street names, restaurants, cards … Keep saving them (and making backup copies) to have your agenda well planned.

15) Ally with the calendar of your smartphone. Every mobile or tablet has its own calendar, which you can synchronize with your email, to have perfectly controlled dates, birthdays, meetings and deadlines.

16) Clean your schedule. Really. You have to call that person and you have been scrolling your calendar for about 30 seconds without finding it, finding names of people who do not remember exactly who they are … Delete them. If you are not going to call them in almost any circumstance, it may not be necessary that they are occupying a place in your directory, right?

17) Verify your usual routes. You have gotten used to that subway route to get to your job, but maybe there is a bus that prevents you from changing. Check your tours for the best option from time to time: saving gas, or transport cards, is always a good idea.

Work to live and not vice versa

Work to live and not vice versa

Let us finish with two last tips (adding up the 19 that we have promised you) to organize yourself much better to be a great time and money saver.

If you learn to live according to small, realistic savings goals, you will see that your finances will experience a qualitative leap that you will notice next month. And for a long time. But for that you need to be focused and this is how you can get it:

18) Turn off your mobile when you need it. Disconnect Do not look at the work email. Silence notifications. Do it especially at the end of the day and ‘get back’ as soon as you get up. Everyone needs rest, even those who work with localized guards. Fight against hyperconnection.

19) Delegate. If you need it, ask for help. Not only at work; also in your house, to your friends, to the teacher of that swimming workshop in which you do not finish taking off. And don’t get obsessed with your numbers: don’t let a healthy economy make your personal or family life non-existent.

We hope that one of these 19 small lessons will be useful in your day to day. Whatever you do, what we do advise you to always be aware of what happens to your money is that you do not forget Good finance . Any movement in your numbers will be communicated to you so that nothing catches you off guard.

Want to Save on Taxes? How to Save Money from Credits

Do you like pay taxes? The answer will most likely be negative. And if we do not like to pay taxes, we have to know how to reduce the tax burden, always within the rules. Today we will tell you how to save taxes in your home by introducing you to an innovative service.

Some Real Estate Taxes

Some Real Estate Taxes

One real estate feature is that … they are real estate. Therefore, they are very permeable to suffering taxes because we have no alternative. So, no wonder we have to pay:

  • Tax on Onerous Transactions (IMT), whenever we buy / sell a property;
  • Municipal Property Tax (IMI)
  • Stamp Tax (both in deed and in credit housing).

How These Taxes Are Determined

How These Taxes Are Determined

The generality of property taxes is calculated based on the Tax Asset Value. This is a calculated value with a set of more or less objective criteria which may vary from location to most controversial recent sun exposure.

Since the Property Tax Value is the basis of calculation of these taxes, it is essential to know for sure what this value will be and to frame it with the theoretical value. For example, if your home has the VPT in the finances of € 100,000 and if today the value of the house has reduced, say to € 90,000, there is soon room here to save money.

How to Save Money on Real Estate Taxes?

How to Save Money on Real Estate Taxes?

That said, we give you an innovative service. It is possible to have a professional assessment of the Tax Value of your home and have a recommendation on what to do next:

  1. If the theoretical value is lower than the current one, you can ask for an assessment in the finances and thus save money every year;
  2. If the theoretical value is higher than the current one, you will know that you should not ask for an evaluation (we know several cases of people who think they can save, ask for evaluation and are harmed).

What does this service consist of?

What does this service consist of?

To save money on taxes we have a service that does an analysis of:

  • Property Analysis
  • Analysis Permanent Certificate of the Conservatory
  • Plant Verification
  • Analysis of coefficients used
  • Revaluation
  • Management of the process with competent entities

What Results Can You Expect?

What Results Can You Expect?

Our consultants and partners have analyzed more than 15,000 properties and obtained a 20% reduction in the equity base. If we consider that annual savings could last for several decades … we are talking about significant savings. Ultimately, we are reducing a waste.

Tips to save better | Loans

This sounds obvious, but it is no less true. Small daily expenses nibble on your budget without you noticing. Set yourself a maximum and delete all unnecessary expenses.

Keep a careful record of your expenses and estimate the minimum amount that you can transfer to your savings account each month. Take on a competition with yourself: try to put more aside than the minimum as often as possible.

Do not accumulate debts

Do not accumulate debts

A credit is sometimes inevitable and it makes life so much more enjoyable, but too many loans are dangerous. As far as possible, make sure that all of your installments do not amount to more than one third of your budget.

Do not use credit to buy useless things. Set clear goals for yourself: what do you need or would you really like? Try to achieve those goals on your own. This will increase your motivation to save.

Make a schedule

cash

It is an excellent idea to set goals for yourself, but how do you achieve them? First of all, set an end date that you are systematically working towards. If you save in the long term, you divide the period into a number of stages to reach your end goal step by step.

Start with a monthly budget to keep a close eye on all your expenses. Reserve a portion of your income for your fixed, mandatory costs (rent, credits, food, health, transport, education, etc.). Then draw up a budget for all your non-compulsory expenses (leisure, electronics, household appliances, clothing, etc.). Try to keep something. Record your expenses to avoid surprises.

Subscribe to a pension savings plan

Subscribe to a pension savings plan

The younger you start, the less you have to set aside each month to receive a good sum when you withdraw. And in this way you also benefit to the maximum from the tax benefits of such an investment.

Are you a tenant? Then one of your goals could be the purchase of an owner-occupied home. Use part of your savings for it and borrow the rest (within reasonable proportions). Your home expenses are probably higher than when you rent, but in the end you become the owner of a property that in time may be worth even more. While you have lost the rent forever.

Reduce your energy consumption

Reduce your energy consumption

Do you find that you pay too much for your heating and electricity? There are many options for reducing your bill. Turn the thermostat one or two degrees lower, turn off the lights when you leave a room and improve the insulation of your home. You will soon notice the difference.
If you have a small capital, the temptation is to get a higher return than what you currently get in a savings account. Attention: stock market investments sometimes yield more, but entail risks. Do not invest at random, but diversify your investments with products that fit well with your investor profile. The investment advisers of Bertram family provide personalized advice, tailored to the profile of each client.

Mortgages from 1.7.2018 are waiting for several changes

Changes in mortgages since 1 July 2018 have been scaringly intensive for several months. In the media, it sometimes looks as if mortgages were to end. But it is not only tragic. Mortgages go on. What’s Changing on July 1 Mortgages? How does it affect people?

DTI – share of total debt to net annual income

DTI - share of total debt to net annual income

NBS regulation has introduced a new indicator for the market. It’s DTI, which means debt to income. The DTI talks about the proportion of the total debt of a loan to its net annual income.

There is currently no ceiling that limits the client’s maximum credit burden. The limitation is basically, if I simplify it, only the creditworthiness of the applicant for the loan and the value of the property.

From 1.7. 2018 it will be different for mortgages. Regulation has set limits to 8 times the net annual income.

If eg somebody earns € 1,000 a month, so the maximum loan load is 1,000 x 12 x 8 = 96,000 €. If the applicants are two with income eg. € 1,000, so the credit ceiling will be € 192,000.

Exceptions to the credit ceiling mitigate the measure

The credit ceiling of 8 times the net annual income is not absolute. Exemptions will be applied to the DTI indicator in this NBS measure. This is similar to what you might know with LTV, where the NBS has already set exceptions for LTVs over 90% in the past.

What can be more than 8 loans with a DTI can be seen in the table below.

Additional condition for people under 35

This condition slightly mitigates the impact of change in mortgages after 1 July 2019, when the share of mortgages over DTI 8 will no longer be more than 5%. As a result, 5% of the extra applicants will receive a DTI 8 mortgage. However, they must:

  • age under 35
  • DTI to 9,
  • income up to 1.3 times the average income in the national economy.

These conditions partly coincide with the conditions for obtaining a mortgage for young people, where it is possible to obtain a state contribution in the form of a tax bonus.

How will LTV mortgage lending limits change from 1 July 2018?

money

For some time now, the NBS has been regulating lending with LTV over 90%. The market has somehow absorbed these changes and everything goes on. Nothing dramatic happened. 100% of the mortgages banks continued to provide, albeit in limited numbers. In the course of June, we have successfully resolved several such cases.

What exactly will change with LTV from July 1 this year

100% mortgages disappear completely from the market. No bank will be able to provide a 100% mortgage. If you do not have your own resources at least 10% of the value of the property, you will not buy the property.

If you want to bypass it, the only option is to deal with it through another type of loan, eg a consumer loan or an inter-bank loan from a building society. Of course, such a solution will burden your wallet with higher repayments and it is possible that you will pay more for interest.

Banks will be able to provide 90% of mortgages in limited quantities. The NBS has set exact limits, as it used to be for hundred percent funding. You can see the exact numbers in the table below. This is true for mortgages with LTVs from 80% to 90%. Source: processed by the author according to NBS material

There will be no restrictions on mortgages up to 80% LTV, although LTVs in the past have fallen to 70%. In the new regulation, such a number did not appear.

Restrictions on LTV will not apply to refinancing loans, which is good news for people who want to save on refinancing their mortgage.

Why NBS is changing the rules for providing mortgages

Why NBS is changing the rules for providing mortgages

In the past, people in Europe belonged to the least indebted Europeans. However, when you look at the “Analysis of the Slovak Financial Sector” for 2017, which is an official document from the NBS, the figures say that it has changed.

Slovak households are in the fastest pace in Central and Eastern Europe. Household indebtedness grows faster than disposable income increases.

The reaction of the NBS has not long waited in the form of lending regulation. However, it is questionable whether it will help Slovak households to indebt less.

Indebtedness is helped by low interest rates on mortgages, the fear that property prices will be even higher, low unemployment and wage increases. All these factors add to people’s appetite and courage.