Unit 7: Personal budget management I; activity 3

3. Advantages of saving money and risk assessment of getting into debt.

ADVANTAGES

Hi guys and girls! What do you think that today I explain some advantages of requesting loan? Well, I'm going to it.

We all know that having savings has always been important but in these economic times it is even more so. The concepts of saving is easy; nevertheless; although it is a very simple concept, the idea of saving can seem like a challenge. We do not know what is going to happen in the future, so we must be sure that we have enough money saved for difficult times. These are some of the advantages of saving money:

- To achieve our dreams and goals for example, if we want to travel or buy our own house if we have enough money saved it will be easier to reach that goal.

- To protect ourselves from some type of disaster as an example if we need some kind of medical care that the insurance does not cover we have to have money saved to prepare us for this type of unforeseen circumstances.

- So that we have less stress and that having monetary problems causes a lot of stress in relationships and in people, having money saved will give us a pieces of the mind.

- To be able to have a level of independence since if we have money saved we will not have to resort to another person to ask for help and also, we avoid a humiliating and shameful situation.

- And finally, it helps us to take calculated risks like starting a business.

RISK

Hi guys and girls! What do you think if, as I did with the advantages, I tell you some of the risks of requesting a loan?

A debt begins when you make a small purchase with a credit card and, what is the bad debt?

- One of the risks is that it can hurt a marriage as it puts unnecessary pressure on the finances of the home and creates a lack of financial security.

- Another risk is that the debt cost money since you pay certain interest that will increase the debt.

- The next risk is that you are using money from your future income because then you will have to pay off that debt with the money that will come later.

- Another feature is that it can become a habit because unless you pay a debt with the credit card immediately the debt will increase every month.

- And finally, remove the money from other important needs since you pay some interest with that money that you could put in savings or that you could spend on other things.