Keep the budget in check: That’s how you don’t fall into the debt trap

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Debt is one of the biggest taboo topics. According to the Federal Statistics Office (FSO), more than four out of ten people in 2020 lived in a home with at least one debt, such as renting a car. But leasing can turn into a debt trap. Likewise, if you become addicted to gambling. It becomes even more problematic when buying becomes intoxicating.

“Anyone can be addicted to shopping,” says Christina Messerli (50), a therapist at Berner Gesundheit, a point of contact for addicts. Triggers can be the blows of fate, such as divorce or job loss. How to get out of the debt trap? The following points may help.

One possible tool is budget planning. The budget provides an overview of income and expenses. But it is ineffective if you do not stick to the budget in everyday life. Therefore, it is also important to open all letters and organize documents. It’s the only way to track it.

Multiple bank accounts can also help with budget planning. Each account has its own purpose. Money Chat, a money advisory service from three specialized centers in the field of prevention and advice, recommends opening an account for fixed costs, an account for day-to-day expenses and a savings account.

Caution is advised when purchasing by account and credit card. Because you only pay for the product afterwards. You immediately get the feeling that you can afford more than you actually do. Installment payments also carry risks.

That’s why it’s best to only pay with the money you actually have in your account. So preferably by cash, Twint, debit card or prepayment.

If you’re addicted to shopping, it’s worth applying for a prepaid card, recommends the Swiss Debt Advice Service. Funds must be loaded before this card can be used. You can only spend money you really have.

A huge debt risk is hidden behind leasing contracts. This is especially popular in cars. You can use the car as long as the contract lasts. You pay a fixed amount per month for this. But you don’t own the car. When the contract expires, you must return it or buy it at residual value. However, other daily use items such as televisions can also be rented.

If the financial situation deteriorates during the contract period, the lease can become a major burden. Budget planning is therefore particularly important here. The same is true for installment purchases.

In general, it is important to seek advice as soon as you can no longer pay your bills. Just talking about money can also help. As debt advice knows, in most cases people come to advice too late. But even then you can still do a lot.

Millions of loss documents with a total value of 20 billion are in circulation in Switzerland. 60 percent of them never get a refund.

Source :Blick