Many Slovaks take consumer loans before Christmas, even if they do not have to. They borrowed as much as €10,000 last November.
“It’s necessary to manage money responsibly in the pre-Christmas period as well,” said Lenka Buchláková, analyst of Slovenská Sporiteľňa, as quoted by the Pravda daily, recommending not to take a loan out for the purchase of a television or appliances.
Slovaks often spend money on products they do not need, but they buy them because of a good offer.
People usually borrow €1,000 on average before Christmas, as the data from the National Bank of Slovakia (NBS).
How much do Slovaks spend?
Presents are definitely the most expensive item on the Christmas shopping list, with 17.5 percent of Slovaks spending from €200 to €400 on them, according to a survey carried out by the Focus pollster for Partners Group SK.
Slovaks most often buy cosmetics, toys, books, clothes, as well as mobile phones, electronics and electrical appliances. Christmas decorations, food, and other Christmas expenses are added to total expenses.
“The average Christmas purchase can then cost at least €400, excluding the costs of travelling home or family visits,” said Linda Gergeľová from Partners Group SK, as quoted by Pravda.
More than a third of Slovaks (39 percent) claimed that they do not create any reserves during the year, either for a holiday or for the purchase of Christmas presents.
"November and December are the strongest months in terms of consumer loans," said Maroš Ovčarik, from the Finančný kompas website, as quoted by Pravda.
“A third of us do the Christmas shopping in the last two weeks,” Monika Remiašová of Partners Group SK told Pravda.
Loans only if necessary
As Christmas nears, the more money Slovaks are willing to spend to get everything they need.
“If you do not have enough money, it’s certainly not reasonable to borrow money for luxurious things,” said Miroslav Zborovský, consumer ombudsman at the Home Credit company, as quoted by the TASR newswire.
Last year’s survey, carried out for Home Credit, showed that Slovaks spend €120 on food and drinks during Christmas. Nine out of ten people decide to pay for higher quality food at Christmas. Three quarters of the respondents admit to buying more than they can consume.
“It’s essential to carefully consider what you want to borrow for and somewhat put yourself at risk,” said Zborovský, as quoted by TASR, adding that it is important to follow one rule when Slovaks go for a consumer loan: the usage period an item should be longer than the maturity of the money.
In the case of consumer loans, a citizen pays less on interest rates if the repayment period they choose is shorter.