Some loans seem unnecessary, but others are a solution, especially if you are betting on safety. There are situations in life where a large sum of money can be used to liquidate a house, buy land, or renovate a home. In this case, financial literacy is the main factor. One can calculate in advance how much one will overpay, whether it is worth it at all, how quickly one will get a return on one\’s investment if renting, the cost of renovating the property and equipment, etc.
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Pre-Christmas pressure
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Statistics based on the experience of some of the world\’s leading psychologists yield interesting results. These are polls conducted at two different times of the year on the use of small amounts of consumer credit and credit cards.
The first survey was conducted at the end of summer, when people are mostly resting after their vacations. Late August is typically a time of slowdown, when people are not stressed from vacation and are not planning major household expenditures. Interest in small loans is minimal during this time.
The second survey was conducted two weeks before the Christmas vacation. This is the time of year when many people are under pressure to decide what gifts to give their loved ones. Christmas may be the busiest holiday of the year, but it is not for everyone. Many people experience unnecessary stress during this time of year and are unsure of what gifts to buy. In the Czech Republic, thousands of people reach for consumer loans (usually up to 30,000 kroner). Before Christmas, the number of small loansincreases by several hundred percent.
Financial Literacy [20].
Some financial advisors suggest that the financial literacy of today\’s population should be enhanced already in the school curriculum. For example, part of the chronicle of ancient Roman history could be made an elective course, or students could learn practical knowledge about interest rates and types of credit. It often happens that just before the Christmas vacations, bad debts increase, people confuse the different types of interest rates, do not know what the APR is, and cannot calculate in advance how much they will actually overpay on a loan.
