There is a possibility that we make mistakes when making our expenses. The call made by financial experts is that we act with caution, with prudence, that we carry out our expenses carefully, in a rational way.
When applying for a loan there are also rules and criteria that must be respected, otherwise a considerable debt will have been acquired, perhaps without any need.
It is necessary that you do not try to modify the budget structure before the first miscellaneous object that you find and you want to buy. Photo: Pixabay.
Errors when buying with your credit
Deny reality. It is not pertinent to use phrases like: « I deserve it. » If you see something that you crave a lot, but is expensive, thoughts immediately come up like: if I stop paying for such things, yes I can buy it; or « I try so hard, I deserve to have it. » Rather than convince ourselves that it is best to purchase the newly discovered expensive product, we must fight to abandon that idea. Expense categories. It is said that it is spent differently, according to where the money comes from. In reality, the rationalization of spending should start from a careful use of resources, waste should be avoided at all times. Rational spending. An expensive purchase is justified by the amortization of its cost; But this long period of time to repay the debt cannot make it possible to ignore that an irrational purchase was made, to avoid falling back into those acts of weakness. Awareness. Satisfaction of basic needs forces constant expenses. For everything else, it needs to be spent only when necessary. Satisfaction of needs. The realization of our expenses should not be subject to commitments, but to the satisfaction of our fundamental needs. If we have already established commitments, we must comply with them. It is not worth that then we renegotiate to get something that we want excessively. If we have already defined savings and investment goals and strategies, we must respect them and we can never allow consumption habits to separate us from the savings and investment plan. An iron attitude must be maintained. If we already have a budget that is in our best interests, we cannot disobey ourselves. Nor is it possible to resort to blackmail to make alterations to what was planned.
Options to stop misusing your credits
A credit is misused when situations such as the following occur:
When you request a loan, you must have a plan of what will be done with those resources. You cannot use the credit to make purchases that you would pay in cash (food, clothing, footwear). It is not pertinent that you ask for a loan to pay another. It is not pertinent that you allocate more than 20% of your monthly income to pay debts. The consequences of bad use of credit When you contract debts by paying with cards it is necessary that you cover more than the minimum payments so that you avoid lengthening the term to pay the principal of the debt. Inadequate debt management can lead to higher financing costs. The stressful situations that are experienced when contracting debt can lead to health or emotional problems. Bad credit can build up. Taking control of your credit requires setting priorities, consistency, and a game plan. It is also necessary to be in optimal mental state when making monetary decisions.
Learn to recognize what are the convenient debts and the disadvantages. Identify how much you can borrow (it is said that debts cannot exceed 30% of your income.) It is a mistake to accept credits without comparing different products in the market. You should accept credits or loans only after checking the options in the market. The most advisable thing is that you do not use credit to replace the money you lack; that is, do not use credit to avoid undercapitalization. Ignore the hooks that seek to tie you down, keep you as a captive customer of credit cards. Ignore the interest-free months. Banco de México has established that the collection of commissions for cash withdrawals (at ATM or window), balance inquiry, receipt and payment of resources, use of debit or credit cards and account management should be avoided. A well-used credit card is useful but it also involves making a commitment. It cannot be used as if it were an emergency fund. Article 10 of the General Law of Titles and Credit Operations establishes that the guarantor is a co-debtor, it analyzes whether the person to whom you are going to do the favor is trustworthy. In order for you to be a responsible customer who uses credit cards properly, you must read the account statements. Finance experts suggest that you avoid paying only the minimum of your credits, loans or cards, and instead, an effort should be made to pay the total of what you owe, or as close to it.
It is clear that all the acts that we perform in our home to carry out the family budget must be the product of rational acts. It is pertinent that we avoid incurring onerous expenses no matter how much we want to obtain something. Ideally, we adjust to what we have established.
More information in our Credits Section.