Signs of Financial Illiteracy Part 2
There is no reserve for a “rainy day”
The prolonged unstable economic situation in the country is weaned of people to save money. Why delay, limiting yourself, if you can suddenly lose everything, not to mention inflation eats savings? It is better to spend now and have fun. At first glance, this solution looks reasonable. But to have the amount of money you need. Unexpected expenses still happen: things suddenly broken, fall out of the teeth fillings, etc. When no savings at all, and the problem should be solved, it starts dipping into the credit hole. Financial literate person must have a cash reserve in the amount of 6-12 monthly expenses for unforeseen situations.
Savings “under the mattress”
Half of those who have a cash reserve “rainy day” does not use the storage financial instruments. Left at home savings at risk to be spent, stolen and impaired by inflation. After 3 years the money “under the mattress” will lose a quarter of its value. A deposit in a bank let a small percentage will reduce losses from inflation, keep you from spontaneous spending, and the availability of insurance system guarantees the safety of money even in the event of liquidation of the bank. After the accumulation of the amount exceeding the amount in 12 monthly expenditures, it is recommended to divide the contribution into two or more different conditions of location.
The neglect of insurance
In our country the culture of insurance is almost absent. Insurance issued in most cases under duress, for example, on the property with mortgage or insurance on the car. Saving on premiums is not always justified. To hedge against the impact of a meteorite or alien abductions may not be necessary, but the purchase of the insurance package when traveling will save your nerves, money and even life. Justified will be insured against job loss and property from fire and flooding neighbors.
Questionable investment
To live on the income from investments is considered an indicator of financial well-being. Novice investors make a lot of mistakes that can result in the loss of invested capital. It should be understood that investment is not only a source of income, but also a big risk. You can invest only the amount that is acceptable to lose without much damage to the budget. It is not necessary to invest the credit funds. Investment funds it is recommended to divide among several projects with different term and rate of return.
Non-use benefits
Ignorance or neglect in the use of tax deprives many of the ability to save. The legislation gives the opportunity to receive a tax deduction from wages if there are children, property deduction when buying real estate, social deduction when you pay for training or treatment. The amount obtained is very noticeable. So, filing a declaration after the purchase of the apartment allows you to legally underpay to 260 000 tax on income of physical persons, plus 13% payment of interest paid to the bank, if you were a sailboat.
The lack of preparation for retirement
Endless pension reform and weak social support has led to the fact that pensions are starting to think for a couple of years before her. Preference to spend the money now than to spend them on dubious pension increase is understandable, but not reasonable. Start taking care of your retirement life, you need at least 10-15 years. First of all, the employment on full wages, then the choice of fund for placing of insurance premiums and be sure personal savings.