Clipping of news on Brazilian Culture, Law and Citizenship
09.30.2015
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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Man stressed about money
Frustration: Borrowing is one way to detonate finances
Marilia Marilia Almeida Almeida, of EXAME.com Follow Me
São Paulo - Small steps can be enough to ruin the finances. These behaviors are often linked to attempts to get easy solutions to get money but have a good chance of generating losses in the future.
The best way to avoid possible headaches and achieve financial goals, is to plan spending, saving and understand that choose to dressers outputs can have a much higher cost than you think.
The following are the most common ways to autossabotar your financial future:
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1) Living in debt
Overdraft loans, the revolving credit card and personal loans should always be seen as a temporary solution, used in case of emergency.
Interest rates charged on these types of loans are high and amount to hit the 395% per year, as in the case of revolving credit, which means that the debt will multiply quickly. Therefore, you should avoid using these resources, since any unforeseen expense can make the debt snowball.
For Fabio Gallo, a finance professor at PUC-SP, living in debt is a clear sign of lack of financial organization.
He points out, however, that long loans, using assets as collateral, such as property financing, are already less toxic to the budget. "This type of loan presupposes that the services are appropriate for the family budget and gives little room for the debt increase, since if consumers delay the installments, the bank will return the property."
2) Having a higher standard of living to their income
Spend more than you earn to sport an incompatible lifestyle with income creates stress and debt. For Gallo, the only way out of this situation is to adapt the budget to their financial reality.
It is always wise to spend less than you earn and save a percentage of income every month. "Only saving and investing money, whether in a financial investment or education, you can improve the standard of living in a sustainable way," says the professor at PUC-SP.
3) Refinance the property for trivial reasons
Search the property's refinancing line to make large purchases or pay for expenses such as a wedding party is extremely inadvisable (see in detail how this type of loan).
For Gallo, not worth paying interest, albeit low, and still run the risk of losing the property to the bank for a goal that clearly will not bring financial returns. "The bill does not close. If the consumer has no money to organize the wedding, it is better to wait and add enough value to achieve that goal."
The owner of the refinancing is only shown to pay off a large amount of debt or raise money for use in an entrepreneurship project if the consumer is unemployed or struggling to increase their income, advises Gallo. "Still, the payment of the loan should be extremely planned to avoid any problem in payment of installments."
4) Redeem cash investments for retirement
The withdrawal of funds invested in long-term financial investments geared for retirement can be a big shot in the foot.
To redeem these values before the planned term, the investor may need to pay a significant percentage of taxes. The regressive table of Income Tax (IR), which is applied to some types of pension plan decreases the longer the application time. That is, the longer the duration of application the greater the yield.
If there is no other way to solve debts, Gallo recommends that the bailout money will be followed by an adaptation of the budget. "We must be aware that you must make a financial sacrifice for a while to recover the amount redeemed."
5) take loans for their children
The intention is certainly good, but to take a long loan, as is the case of student loans, parents can harm your plans for retirement. Consequently, they may need the help of the children to hold up ahead, perpetuating the cycle of financial difficulties.
The best way to help children is to find a way to build up a financial reserve from birth, which may be used to pay for a college or exchange in the future.
Source: Survey
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This article was translated by an automatic translation system, and was therefore not reviewed by people.