Many Germans have serious debt problems. According to Creditreform, nearly one in ten adult Germans is overindebted. With the right handling of money, this does not have to be the case. Tips on how to escape the debt trap in the first place.
To find out how you can tell if you're in debt, read our post.
How can I find out if I am already in debt??
If you take out a loan and pay back the installments agreed with the bank, you are already in debt. You have debts. It only becomes worrying when you can no longer meet your financial obligations as agreed: Because then debt becomes over-indebtedness! Tip: If you are overindebted, take out another loan?
Always keep the overview!
Take a look at your bank statements. In addition, possibly the bills that have to be paid monthly. Record all monthly expenses in a budget book. Items such as apartment rent or mortgage, telephone, mobile phone, insurance and due loan installments. Also, monthly payable obligations such as alimony, television fees and dues to any club memberships.
You should also note the costs that are to be paid only once a year.
Calculate household budget – add income
Now add up your monthly income, such as salary, wages, unemployment benefits, pension or pension and / or other income such as from renting or leasing.
Do not disregard the monthly costs for food, drink, clothing or fuel.
Simple calculation: subtract expenses from income!
If the total costs, i.e. the sum of all expenses including living expenses exceed your monthly income, you probably have a financial problem, you are not only more in debt, but also over-indebted within a very short period of time.
How it usually comes quite suddenly to over-indebtedness
The classic and not uncommon case is when the job is lost and unemployment is imminent, a reduction in income is pending due to divorce or illness.
Thus, even the monthly burden from a real estate financing can quickly lead to major financial problems.
Unreasonable financing: some banks on the Internet are also known real estate loans with terms of 40 years. It's not uncommon for offspring and heirs to pay off their parents' house.
If you are a tenant and still have the option of exchanging your apartment for a cheaper one, things look bad when it comes to financing a property: In order to keep the monthly installments in digestible sizes, real estate financing is usually concluded over a long period of up to 35 years, in the first years, hardly anything of the financing amount is repaid, but almost only interest is paid.
What to advise before it comes to over-indebtedness?
Keep a budget book. Enter all costs, all expenses strictly. Self-deception is useless!
Lower your costs: even seemingly small monthly amounts add up to quite tidy sums over the year. Cancel the second contract for your cell phone, save on visits to restaurants and eat healthy meals at home more often again instead.
Go through your insurance policies: Is it necessary to triple-insure everything? Too much guarantees cost your money. Often already the deletion of "little things" with z.T. enormous savings.
Take a rigorous approach to your expenses. First, eliminate items that you can easily get by without. You'll see that you have real money available each month that you can use to beat off over-indebtedness.
For (responsible) loans, we recommend the reputable loan broker Bon-Kredit. Even with smaller Schufaeinzeichnungen affiliated credit banks do not automatically reject the request. Individual decision is therefore guaranteed.