Monthly Archive: June 2019

Have You Been Paying Interest for Years? We Tell You How to Get Out of Debt

Sometimes, we would like to have no debts. We feel that we allocate everything we earn to pay credits and we think it would be great to have resources for other expenses. How to get out of debt?

I know people who only buy in cash. They save and save until they reach the goal and take pleasure in owing nothing. They have always seemed somewhat exaggerated. Also, I have friends who pay everything on credit and, really, I always wonder, how do they pay all their debts?

Personally, I am overwhelmed by owing a lot of money. The reason? Sometime in my life I exceeded a little in expenses. It was a good lesson. I tell you the things I learned about getting out of debt:

 

Lessons to get out of debt

Manage your personal finances

Create a real budget of income and expenses 

The first step is somewhat obvious, but absolutely necessary. It’s about wondering how you are managing your personal finances . Questioning, being aware of how much of your income you are going to cover debts, is the first step to end the flood of interests. Some experts believe that you should not allocate more than 30% of your income to cover loans and credit cards.

 

Organize the debts you already have 

The second step is to organize the debts you already have . There are two ways. The first, called a snowball, is to order the debts according to the amount: the smallest to the largest. The idea is that you can pay the smallest as soon as possible; to continue with the second and third; until finishing with the biggest. Getting out of small debts will allow you to have more money, which you can use to pay the capital of larger debts. The second way is: organize the debts according to the interest rates you are paying. This will reveal a spooky reality: you may be paying interest of more than 100%. The idea is to give priority to the payment of the most expensive debts.

 

A classic way out of debt is to measure the use of time or credit card

Organize the debts you already have 

The cards are not an extension of the income, they are a credit and one of the most expensive in the market. If, for example, you still usually ask your card for cash, you are doing a bad business. You are paying that loan very expensive and paying dearly is to decrease your resources.

 

A mortgage transfer is, as a rule

A very good option to improve the conditions of your mortgage loan: a more favorable rate equals a more comfortable installment to pay.

 

Unifying all debts into one is a great solution

Unifying all debts into one is a great solution

Look at the benefits of considering this option: One, you reduce the financial cost because, normally, credits offer you lower rates to credit cards; two, lower the cost of administering several credits; that is, instead of paying the charge for handling several cards and the commissions of several credits, you start paying only one; three, lower the pressure, because it is about fulfilling a single commitment on one date and not several on many dates per month. A home equity loan is a great option.

 

Parallel Credit

To get out of debt, make sure you don’t default on any payment . You do not want to be reported to any risk center to request a parallel credit to help you pay your credit cards.

 

Look at your expenses and make a couple of sacrifices

Look at your expenses and make a couple of sacrifices

Before reapplying for a loan to pay another’s fee, look at your expenses and make a couple of sacrifices. More credits equals more interest and more interest equals less money in your pocket.

 

Create a real budget of income and expenses 

The last step is to create a real budget of income and expenses , in which you will have this slogan: spend less than you earn. That is the route of those who know how to handle money, the route of millionaires.

As you can see, the way to pay debts is reduced to three variables: decrease the interest you pay for your debts, pay the principal of your debts to pay less interest and spend less.

 

How Does The Bank Digital Token Work?

Among the security measures adopted by the bank for online operations, is the use of a token. In this article, we explain how the bank’s digital token works.

 

What is the banks digital token?

What is the banks digital token?

Financial institutions constantly incorporate innovative security mechanisms that make non-contact operations safer. The rise of the so-called electronic banking has required the generation of new systems designed to provide security. The objective in this case is simple: to prevent fraud in electronic banking operations.

A system that has demonstrated efficiency to reinforce security is the use of a dynamic key. This is nothing more than a password whose validity is temporary, and which is regenerated in each operation. That is, in each operation requested by the user, a key is generated that is valid exclusively for that operation.

Now, in some electronic banking systems still used, the key is generated by the bank. It is then transmitted to the user via email and text message (SMS) to the authorized address and / or telephone number. This has two disadvantages:

  • In the case of SMS sending, the operation requires using two means of connection: telephony and data transmission.
  • In the case of email, use two portals simultaneously: the bank and the mail.

To avoid these inconveniences, a device called a token has been introduced, which allows knowing the password without the need for a connection. This device shows the current security key in force for electronic operations on the bank’s portal. As each user has their own keys, the tokens are customized and only generate the password of a particular user.

 

How does the bank digital token work?

How does the bank digital token work?

The use of the token, also known as a digital token, is very simple: just press its key. Immediately the display or screen of the device shows a six-digit number, which is the current digital code. Then you just have to put this key in the place that the bank’s portal has arranged for this purpose.

If your financial institution uses a token in its operations, surely you will have already received an invitation to withdraw it in its offices.

Card types: Debit or Credit

There are two kinds of card. These are Debit Cards and Credit Card. Read some information on the difference between the cards.

  • Debit: This card gives you access to the money you have saved in a savings or payroll account. With a debit card you can dispose of your money without having to charge cash.

  • Credit: it is a means of payment through which a bank or a store offers you a loan. Every time you use your card you are using borrowed money that you will have to pay with interest.

Investigate how much you must pay for account opening

cash

If there is a charge for having a lower than minimum balance or extra expenses for account management. Do not forget that by law there are some commissions that banks cannot charge.

Know the minimum balances that each debit card requires

Know the minimum balances that each debit card requires

If you plan to use it only to manage your daily expenses and not to save your savings, you should use a card with no minimum balance.

Compare the level of protection and insurance offered by different debit cards. Some include insurance policies or guarantees in case of theft or loss.

Find out about the benefits of having an account with a certain bank. Certain financial institutions offer their clients promotions or discounts for using their debit cards.

How to choose a credit card?

cash

• Analyze your payment habits. If you usually pay the total of your purchases, look at the Annual Cost of the Card. In case you only pay the minimum, check the interest rate.

• Be realistic about your income and ability to pay. Credit is not money given away. If you use a sum greater than what you can pay each month, your debts will grow rapidly.

• Consider how you will use your card. People who reserve emergency credits must choose cards with a low annuity. In case you are going to use it in your usual purchases, choose one with few commissions.

• Know the Total Annual Cost. This includes the interest rate, the annuity and the bank commissions. Although it does not include all costs, it can give you an idea of ​​how much you will have to pay when using it.

General recommendations:

  • Choose a card based on your needs and budget.

  • Remember that neither the debit is a bottomless piggy bank nor the credit is an extension of your income.

  • Find instruments according to what you require. There are special financial services for savings and credit. Find out before making a decision.

With us you can have cash in a few minutes and you have the possibility of going through your payment date 7, 14 or 30 days in case you cannot pay off your loan on the pre-established date.

How to Organize Your Finances If You Work as a Volunteer

I have recently met a person who has chosen the path of volunteering and social work as a professional life .

That person has taken his talents and skills and has decided to abandon several more lucrative opportunities to participate in a social work program full of challenges that will not, precisely, make him earn a lot of money.

Therefore, in today’s article, we will see what we can do to offer you some useful financial advice and that are also valid for anyone else who decides to follow in their footsteps.

For starters, your income will be low for a good period of time and, most likely, your position will improve very slowly over time.

This person has an enormous spiritual strength to spend their days helping those who cannot help themselves but keeping in mind that it will also be a great financial challenge and must make a series of difficult decisions.

 

What can you do to ensure your financial stability?

Here are my suggestions and I would love to see more in the comments.

Create an emergency fund

Create an emergency fund

In a professional field where job opportunities are often varying quite a lot, many people who are dedicated to this are changing from job to job and an emergency fund is vital to save the bad times.

It’s very simple, just put a certain amount of money in a savings account or fixed-term deposit and then transfer the money when necessary. Like when your car breaks down or something more disastrous happens.

Many volunteer workers know the benefits of doing this but they misapply it. They maintain an account at a bank in their city or at the bank branch where they do their work.

A much better approach is to find a good savings account or fixed-term deposit, which provides a good return. For a person with such variable incomes, what they can earn with the returns on their savings is essential.

 

Save for retirement

Save for retirement

At some point, a social worker, like everyone else, will have to face old age and retirement. And being a person of variable income also needs some flexibility in retirement savings .

An index fund is a great option and can function as a perfect retirement vehicle. In a nutshell, an index fund allows anyone to invest in the stock market in the long term and enjoy an average return of 8% year-over-year.

It is the best vehicle to grow savings as quickly as possible and thus ensure you have an amount of money saved for retirement.

How can you start? Many financial institutions offer index funds and, although they are somewhat more expensive in commissions than others that you could find yourself, to begin with and while learning an index fund from your usual bank is enough. In addition the transfers are free so you can change the background whenever you want.

 

Cultivate a strong network of friends and family

Cultivate a strong network of friends and family

If you are thinking about a life of social work and volunteering, you will soon realize that it is very likely that you need the support of people during great periods of your life.

Talk to friends and family and make sure they support you in this election. Not in an economic sense but in the sense that they understand the choice you are making and can help you when you need it.

On the other hand, if someone you know is considering making that choice, offer this kind of help. Make it clear that you can help them by leaving a bed or being able to eat at home whenever you need it.

These people are making a very difficult choice, a choice that will make the world something better, so it is a good idea to show them as much support as possible.

 

Learn to live in a saving way

Learn to live in a saving way

If the income is going to be very variable, the expenses must be minimal. The first is something as basic as learning to cook. Eating out is over, beyond leisure time. It is the easiest way to save money.

It is also a good idea to leave the pride out and learn to buy everything white or second-hand brand. In this lifestyle you have to focus a lot on saving expenses .

Debt of the Polish countryside.

 

On average, such a person has to pay 14.88 thous. PLN It is PLN 890 less than the city debtor has to pay back.

Currently, there are more than two (2.36) outstanding commitments for each rural debtor. On the other hand, for every person living in cities there are almost three (2.74) unpaid invoices, bills and installments.

Age according to their consumption needs.

Men who constitute 2/3 of rural debtors have more outstanding claims. On average, their liabilities amount to 17.2 thousand. PLN, and women – per 10.1 thous. zł.

The most numerous group with debts in the countryside are people aged 36-45, This is due to the fact that at this age, due to adolescent children, you usually have the greatest consumption needs.

However, people aged 46-55 have the highest average backlog, Statistically, 20.8 thous. zł.

Regarding the regions, the leaders in the most indebted villages are those located in rich provinces. The largest percentage of rural debtors occurs in Lower Silesia, Mazovia and Pomerania. They are the least in regions with a strong tradition, i.e. in Podkarpacie and Lesser Poland.

The largest creditors of the Polish countryside

The largest creditors of the Polish countryside

Who are the residents of the village behind with money? Their largest creditors are:

  1. Securitization and debt collection companies, i.e. buying and recovering debts receivables – 1/3 entries to the KRD
  2. Loan companies and banks – 1/4 entries
  3. Media providers (TV, telephone, internet) – 1/5 entries

The former take over claims mainly from financial institutions. Therefore, it is the unpaid installments of loans and credits that constitute the largest part of the debts of the Polish countryside,

They are mainly easily accessible payday loans, Village residents usually take them:

  • for third parties, e.g. grandparents for grandchildren,
  • to pay off other liabilities,
  • organization of family celebrations,
  • current expenses.

An interesting phenomenon among rural residents is the conclusion of contracts with telecommunications companies with a view to acquiring new IT equipment and its immediate sale, e.g. on auction sites.

The consequence of this behavior is the calculation of contractual penalties. As a result of their unregulation, rural consumers go to the register of debtors.

According to the words of financial analyst, this practice is most often committed by customers aged 18-20 and 60-70 years old, who depend on income from agriculture, farming or seasonal contracts.

The debtor from the village has scruples

The debtor from the village has scruples

Why are there fewer debtors in the countryside than in cities and fewer liabilities? There are several reasons for this. The most important thing is:

  1. Statistics

    60% live in urban centers population. Inevitably, there are more people with unpaid liabilities.

  2. Sociology

    Relations are more intimate in the countryside than in cities. Therefore, in the event of financial problems, its residents more often borrow money from neighbors and family.

  3. Mentality

    In the countryside, especially the more traditional one, located away from the city and maintaining itself from farming, it is difficult to remain anonymous. In small communities, people are afraid of being stigmatized because of debts, which is why they are more likely to use informal loans, i.e. from relatives, than people from cities. They also maintain more discipline in spending, i.e. they don’t spend more than they have.
    – Credit and debt in general with third parties is not part of the tradition of rural families.

  4. Worse access to financial services

    Before Poland’s accession to the EU and launching payments for farmers, a small percentage of people from the countryside used the services of financial institutions, especially banks. It was caused by, among others distrust of such entities, difficult – compared to cities – access to branches of financial companies and lack of internet, which enables banking and borrowing online.