There are many cash-basis people who say, “I hate debt, so I buy it in cash.” It can be said that the household is healthy because it is bought after saving money, but sometimes even if you stick to cash basis too much, the balance of the household will be lost.
Let me tell you the advantages and disadvantages of cash basis.
◆ What is the success pattern of cash basis without using a card?
Cash-basis people are good at “savings”. Speaking of ants and grasshoppers, they are ants.
We will manage our household budget, make a savings plan, and increase our savings balance every year. When your savings balance increases to a certain extent, you will feel that you do not want to reduce it, so you will be able to make strict judgments about your spending, and you will enter a good spiral of further savings.
Even with a cash basis, there are many cases where you get a mortgage only for your own home.
However, because you have a lot of savings, you can put in a lot of your own money and get a mortgage with a sound financial plan. In addition, we will save money to make early repayments, so we will realize early repayment.
In the case of cash basis, it is rare for households to be in trouble, and people with debt habits such as credit cards and loans are far more likely to be in trouble.
However, even those who manage their households normally on a cash basis are worried about the combination of large expenditures such as mortgages, education expenses, and car expenses, so was the conventional way of managing households good? There are cases where you can come for consultation.
◆ What is the failure pattern of cash basis?
The failure pattern of cash basis is to spend even the money you need to keep.
I hate loans and debts, so I buy cash except for “my home” and pay off the mortgage early by prepayment, but because of that, the cash on hand is greatly reduced and I am anxious. ..
Another case is that if you have saved 4 million yen, you bought a car of 3 million yen in cash even though your child is about to go on to college two years later.
Originally, if you are planning to go on to university a few years later, it is better to save cash as an educational expense.
In the first year alone, the amount to be paid to the school will be 1.3 million yen for the entrance fee and the tuition fees for the first and second semesters, and (in the case of a private university) the total amount for four years will be 4.3 million yen. You need to save as much as you can in case.
For emergency reserve funds for about half a year’s living expenses and money that is decided to be used within a few years, it is necessary to leave the money on hand without spending it and make good use of the loan.
◆ If you have only one debt, you can manage
Only if the household is well managed, but personally I think it’s okay to have a “loan” if there is only one in the household.
For example, if you are a renter, you can buy a car with a loan, but if you take a mortgage, I will tell you that you should save systematically after that and definitely buy a car with cash. ..
If you rely on a loan for everything, you will quickly end up with multiple debts such as mortgages, car loans, and education loans. As a result, retirement funds cannot be prepared and a poor old age is sent.
In this way, one financial literacy is to deal with money and loans in a well-balanced manner while considering the household situation and future life plan without being too particular about cash.
Sentence = Kiyoko Ninomiya (Money Guide)