HomeFINANCEReturning from vacation: How to rebalance the accounts?

Returning from vacation: How to rebalance the accounts?

The months following the summer break can be a little tougher to manage financially. Expenses between trips, outings, outings or meals out are, as a rule, higher than in other months of the year. So, in return from vacation it is important to sit down and evaluate the “damages” to rebalance the accounts.

In this article, we suggest some steps towards reevaluate the monthly family budget of the next few months. We also demonstrate how to apply it on a daily basis. instant savings solutions.

Check the size of expenses

O the end of the holidays is almost like “a falling back on reality” which can weigh significantly on your wallet. Enjoying your vacation to the fullest is important, but it can be expensive. Even more, if we exaggerate in secondary expenses, often without even noticing.

Depending on the type of holiday you took, whether in a hotel or apartment, with half or full board, car hire, plane/car or bus trip, activities, toursfood in restoration or souvenirs, O financial impact can be noticed less or more.

So the first thing you should do as soon as you get back from vacation is assess the size of expensesso that later it finds solutions for a rebalancing of the accounts.

If you haven’t been pointing out what you’ve been spending over the holidays, do it now. Access the cards you used for payments and do a tracking of all expenses.

Later, evaluate what you have at the moment and organize the next months, redoing the monthly budget. For this, let’s see some options that can help you have a more comfortable budget in the near future.

take into account inflation

When adjusting the budget for the coming months, it is important take into account the current inflation scenario that we are living.

not only the supermarket products are more expensive, which has a major impact on monthly purchases whose value can double, as well as the fuel and services such as electricity and gas.

This happens due to the invasion of Ukraine which caused a sharp rise in the prices of energy, raw materials and agricultural food. What also caused problems in global supply chains.

So, monthly inflation indicators have reached new records. In the United States, the inflation rate was already at 8% in March, and it was in May that the Eurozone reached the same mark.

Therefore, in the organization of monthly budget for the next semester, remember to increase the maximum value to spend in these areas. And follow the tips below, so you can save even with inflation.

Preparing for back to school

Is it possible to save on school supplies?

Save on school supplies this year, with inflation, it can also be a challenge. Prices are all higher, but if you shop consciously, you can afford not to spend as much.

The most important step is the one before shopping: making a list and stipulation of a budget. Write down everything you need to buy and limit the maximum amount you can spend.

How much does it cost to prepare my child’s backpack?

To do so, make a search online so that you first have an idea of ​​how much it can cost to prepare your child’s backpack.

Also check before you can reuse material from previous years, such as the backpack, the case or other materials that are still in good condition. This avoids unnecessary purchases.

When going shopping, compare prices and look for promotions. Also opt for packs instead of buying individual ones, as it always ends up paying off.

Other impact expenses in the school routine

still ponder other expenses that a school routine implies and that may have an impact on the family’s monthly budget.

For example, if it is necessary to place your child in extracurricular activities or if you want to put him in a sport; if your child needs to buy passwords for lunches; if you need to buy technological material to help you with your homework, or if you have to buy a pass to take off.

Some may be expenses with more impact in the long term and others in the short term, but you should take all into account at first, so you don’t get caught by surprise.

How to rebalance the accounts?

Analyze where you can cut

To rebalance the accounts and redo the family budget, evaluate superfluous expenses where you can cut in the first place.

For example, leisure expenses: going out, eating out, buying clothes, among others, are all costs that can be reduced at this time. This is because are not essential.

Also service expenses streaming, for example, can be cut at this time. You do not need to unsubscribe from the services, but consider options such as share these services with others, sharing the cost.

Also read: How to rebalance my accounts in the last quarter?

Will the consolidated credit solution?

A quick solution that can help you rebalance your accounts immediately and for the next few months is to make a consolidated credit.

This, of course, if you have more than one credit. So, if you have, let’s say, a home loan, a car loan and a personal loan, you can access this solution. And how it works?

Credit consolidation joins all credits into one, leaving the pay only one installment. And that one-time monthly fee is lower than if you were paying individually.

Another advantage of this option, in addition to cost reduction, is the interest rate is lower than average of the set of credit agreements. And it now has a specific deadline to settle the three debts.

So it is easier to avoid a default situationsince it now has greater control over the credits it has, in a single payment.

However, note that this solution also has disadvantages. When making a consolidated credit, the average term of contracts may increase, so it also pays interest for a longer time. That is, it achieves a lower benefit immediately, but the total amount you would pay for the credits will increase due to interest.

Also know that this type of credit is subject to approval. There are certain criteria for accessing consolidated credit. Ie, if it is in default, it is likely that it will not be able to consolidate the claims that has. If this is the case, consider other solutions such as the review of current credit agreements.

a computer screen with man's hands holding credit card and bunch of credit cards beside on table

Review housing credit conditions

Another option you have, to save immediately, is the review and negotiation of conditions of your home loan (if you have one).

Then, talk to the bank and ask them to review current conditions: the indexer, the spreadterm and associated insurance.

What is the best rate in the current context?

It is important to review, mainly, the rate you have on home loans. If you have a variable rate, may not be the best choice taking into account the scenario we are going through.

Since the end of 2021, the interest rates have been rising, due to the invasion of Ukraine. This context has led the European Central Bank to make a progressive rise in Euribor rates within the various timeframes.

So, due to the uncertainty and instability, of not knowing how long this rate hike can continue, the Fixed rate and mixed rate are alternatives that must be considered.

THE fixed fee assumes you pay the same fee amount throughout the contract, without revisions. So, your installment does not change, even if Euribor rates increase. The mixed rate means that during an initial period you pay a fixed rate, and after the agreed period, your credit becomes indexed at a Euribor rate.

There are two options that more stability right now. Is that might be cheaper nowtaking into account the current increase in Euribor rates.

Also read: With Euribor rising, should I opt for a mixed rate?

Remember the associated spread, term and insurance

Regarding the spreadcan get decrease this rate if you agree other conditions with the bank. For example, if you subscribe to services such as a credit card, you can get the bank to give you a spread. But remember that credit with the spread lowest is not always the cheapest.

About the mortgage loan termcan only save on this factor if you still don’t have the maximum term. If this is your case, by increasing the credit term, you can pay less in the monthly installment immediately.

For example, if you have 240 months to complete the contract, with an installment of 470 euros (considering an outstanding principal of 100 thousand euros), and ask to extend the deadline for 360 months, the installment is immediately reduced to 400 euros. get, thus, save 70 euros per month.

You can still ask review of insurance associated with housing credit. Life insurance and multi-risk insurance, which are products required at the time you make the credit.

As they are two types of insurance, as a rule, through the bank that granted you the loan, consider the possibility of reducing premiums.

If you are not satisfied with the new conditions proposed, whether in credit or in associated insurance, Evaluate the option of transferring entities.

What if I transfer entity credits/insurance?

In the search for savings with credit and insurance, you can also make a transfer same for new institutions.

rate the current market and look for where you can find the lowest prices. In this process, you can ask an intermediary to help you request new proposals and then compare them.

When making a home loan transfer, you can get offers with better conditionswithout associated products, a spread lower or a lower interest rate. These are factors whose values ​​also depend from institution to institution. Therefore, you can generally pay less for your credit.

The same happens with associated insurance: life and multi-risk. When making the contract, the banks ask that the insurance be made with the insurance company linked to the institution. But know that, by law, it is not mandatory. As far as you can now, switch insurance to a new insurer able to offer better conditions at lower prices.

The only drawback, in this case, is that the bank can make you worse spread if you do not have insurance in the associated entity. But beware, because can compensate you the savings you will have with insurance versus what you will pay more for the credit due to the worsening of spread.

Therefore, evaluate the market and do the math so that you make conscious and informed decisions. Doctor Finance can help you in any of these solutions, to identify which is best for your case.

Also read: Euribor: should I choose 3, 6 or 12 months?

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