Credit spiral and whims


To begin with, the question – do you know what cravings are? If not, I hope that after reading this article you will know their definition and the right place in the series of household expenses.
Every month you receive a payout, no matter whether in your hand or on your account.

It is important that you have a certain amount at your disposal, which you can allocate according to your priorities. A very small, even minimal percentage of Poles save. If you are in this group, congratulations. If not, it means that your priorities are set incorrectly.

Correct, they should look something like this

First, you should save / save / some money – it is about 10-20%, only the remaining part is managed according to expenditure groups. So you should “pay yourself first”. Unfortunately, it is known from practice that Poles do the opposite. First the money is spent , only if something stays there, then they try to save.
I think that since you are reading this article, you belong to the vast majority, spending all money and in addition not in the correct order.

Incurring expenses in the wrong order / validity / in the household leads to the necessity of borrowing in banks or loan companies.

This is the first warning signal that you may find yourself in a credit spiral.

Look at your expenses

Look at your expenses

Within a month, you spend money on food purchases, paying for household utilities, medicine, repayment of loans, for your hobby, cinema, theater, restaurant, equipment purchases.

All these expenses can be divided into 4 groups.

  1. Commitments / rent, telephone, taxes, water, gas, repayment of loan installments /
  2. Needs / food, clothing, hygiene and cleaning products, medicine, car fuel /
  3. Desires / new car, large house, exotic travel, hobby /
  4. Cravings / sweets, stimulants, unforeseen expenses, visits to restaurants, pubs /

Can you distinguish between need and desire?

Without the basic needs you could not function, cravings and desires are categories that you could do without. You have the desire for a new car when the one you drive is completely enough for you. You want a large house when you don’t need it because it generates a much higher cost of living.
If you are addicted to stimulants, you treat them as your basic needs.

In the case of whims, their best verifier is time.

For example, if you want a camera, do not make a decision to buy it under the influence of emotions, give yourself time to think.
Most often, whims do not stand the test of time. From the moment of “encouragement” to the moment of implementation there is a time that verifies it. And often after a period of reflection, when the emotions subside, it turns out that you can live without a camera.