How do you finance the reform? | Reform plan

If it is time to get down to business and now is the time to begin your reform, there are several options Financial reform, Today we explain what you have to pay attention to if you want to use your savings, Forgiveness finance the reform in whole or in part with a loan or if it’s a very good idea invested the cost of mortgage reform.

Finance the reform with your savings

Fund your reform with your savings This is the cheapest option because you don’t have to pay any interest. However, one of the prerequisites for a healthy family economy is the broadest possible diversification of investments and, above all: Maintain a savings pillow sufficient to face possible unforeseen events.

Experts recommend behaving a saving of 6 months on our fixed costs. In other words, if we are spending $ 2,500 between mortgages, food, electricity, insurance, schools, etc., you need to have a mattress of at least $ 15,000 for unforeseen expenses. If our cost is lower, the mattress should be lower. In order to maintain this level of savings, we have to Set aside between 5% and 10% of our monthly income.

Reform should not be viewed as an unforeseen event as, with few exceptions, it is usually planned 3-12 months in advance. Therefore, we recommend that you only use this option if you can maintain the level of savings we recommend.

Loans for repairs

Imagine we have a couple 24,000 euros savings and we want made a reform of 14,000 euros. Of course, you could afford to pay for the reform, but you only have € 10,000 (around € 15,000 would be optimal depending on how much you spend) and what happens when you reform. get up, suddenly, yes some extras you didn’t have?

With monthly expenses of 2,500 euros and a monthly family income of 3,500 euros, your monthly savings are 28% – very good! – So you can set aside 18% (€ 630 / month) to repay a loan without touching the recommended minimum savings rate of 10%.

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