For many Czechs, debts are a common thing. “We spend it when others lend us,” chronic debtors say, following the example of Hancel Kratz. But he is not a debtor like a debtor. EI Finance tried to map the debtors’ typology and their reasons for how normal it is to owe, based on extensive research.
According to the probe, 65 percent of us are unable to pay our debts regularly, while a third of Czechs have outstanding commitments ranging from USD 10,000 to USD 40,000, and it is no exception that we owe several places at once.
For some borrowers, lending money is like a drug, a debt spiral spinning like a wheel of fortune. Others borrow recklessly and borrow others only when inevitable. This is due to a different approach to debt and money. What is typical of certain groups of people towards debt?
According to the survey, one in ten of us is a debt addict. Selena is an example. She makes purchases very often and likes to show off what has been added to her colorful wardrobe in front of her friends and colleagues at work. When the neighborhood begins to question where it takes, it looks mysterious. With his headless scattering, he has his debts over his head, but he can’t help himself. They are not ashamed of their debts, they even blame them for traders and the possibility of online shopping. “I am the victim!” He no longer knows much about his debts, only he knows that they allow her to live on a dream level. He is a debt addict, a chronic debtor.
14 percent of Czechs belong to the category of mortgage debtors. Juan is an example. She owed only a few times in her life, she does not like debts, she takes them as the scourge of humanity. When she divorced, she had to find a new flat in the village. She preferred her own housing to sublease. It was impossible without a mortgage. She has a lot of wrinkles, but for her it is better to live in her own than paying strangers for sublease.
Mortgage borrowers like Juan usually keep debts to a minimum. They know that loans are sometimes needed. They do not understand how some people spend their minds. People from smaller towns and rural areas, over 50 years of age, think the same way.
15 percent of Czechs belong to the group of frivolous debtors. An example is Mulan. Unpaid accounts are not handled until someone is contacted with a subpoena. Debts are a normal part of his life. He regularly forgets to pay the phone bill and other bills. “It has time!” He says laxly. He likes to buy technological gadgets and goods he likes. “It was discounted, what do you mean?” He is simply a reckless debtor who “lives today”.
They do not feel bad because of their debts, but at the same time they do not blame anyone. It is more like men, and especially younger people, who often forget to pay or simply do not think what they are spending.
A total of 17 percent of people are casual borrowers. An example is a young couple. Ina and Morry are arranging a joint sublease. For the first time, they felt the burden of more debt when they bought the television together in installments. They take the first loan as a test of maturity and consider debt to a bank or business as a normal part of adult life.
Occasional borrowers like them are the majority of young people in the range of 25-39 years or families with children. But they approach financial commitments with responsibility. Debts are preceded by a careful balance sheet – how much they will repay, for how long, what they have to limit. For the price of higher comfort they are not afraid of restrictions. As soon as their financial situation permits, they will borrow minimally and buy only if they have the funds for the goods.
On the positive side, people are more likely to avoid debt in general. A total of 45 percent of Czechs can be described as debt opponents. Examples are Novák’s, they often argue, but they always agree on one thing. Consumer loans refuse. Family debt is not an option either, it is the same psychological burden for them as if they owed the bank. The financial situation is their personal business.
People like Novak only borrow in urgent cases, for example in a difficult life situation under pressure from others. Otherwise they don’t buy anything until they can afford it. Debts are a great emotional burden for them. Even a colleague paid lunch is a form of debt. People who avoid debt are in all generations. Most often think of individuals aged 40 to 69 years.