Smart indebtedness. Yes, you read it right. Because although we are talking about debts, they can be sustainable or, otherwise, put our financial health at risk. The problem is not in asking for a loan, but in not being able to assume the debt. To avoid being involved in such a situation, we will explain what the concept of intelligent indebtedness consists of.
The total monthly amount of the loan fee should not exceed 30-35% of the monthly income. This is the basis on which intelligent indebtedness is sustained. Assuming a higher percentage could be a problem for our solvency. However, beyond keeping the level of our debts under control, it is also important to know how to use the various loans or credits.
What is smart indebtedness?
It is considered a smart debt when the money we request, we use it to invest and not to spend. In this sense, we must know how to differentiate the different types of debts according to their profitability. For example, purchases of a good or fast consumer service, which cost money and do not generate profits, are considered bad debts. And, since there is no yin without yang, on the other side of the coin, there are those of good debts. Those that will make us prosper professionally, such as the purchase of goods for the improvement of our business or investments in our education. Yes, they generate an expense, but in the long term, they will improve our economic prospects.
For example, apply for a loan to do the master’s degree that will complete your profile and improve your professional opportunities; buy computer equipment for the office; buy or rent a larger space for your business …
Another aspect that determines financial indebtedness is the number of debts we contract. It is advisable not to have more than one debt at a time and avoid requesting money to pay what we owe. In this sense, before asking for a loan or loan we must ask ourselves if we really need what we want to buy and how it will influence our monthly budget and how we can eliminate outstanding debts and even save.
Can we bear the cost?
As we told you at the beginning, the level of indebtedness should never exceed 30-35% of your monthly income. Therefore, when money is requested, the total cost of the loan or credit must be calculated, taking into account aspects such as interest, commissions, repayment terms, requirements … Read the contract carefully and review all the conditions to know what you are going to have to face and avoid unexpected surprises.
With all these aspects well tied, keeping an exhaustive control of your income and expenses will help you to have a better knowledge of your financial situation. Carrying it out is easier with tools such as our ruralvia report application . An app that allows ruralvia private customers to obtain a report on the situation and evolution of income and expenses, with a daily update of the monthly, quarterly or annual data on the evolution of their finances.
If you have not downloaded them yet, we encourage you to do so. Rural Auditing report is available for Android and iOS. Access is made with the same keys as those accessed by Rural Auditing, the digital banking of Grupo Kada Rural. You will have the possibility to access with fingerprint whenever your phone allows it and it is a 100% secure app.
Likewise, whether you are our client or not yet, you can approach any office of the entities of Grupo Kada Rural and receive personalized advice on the situation of your finances and your level of indebtedness, among other aspects.