Take out a loan for a wedding ?: Financial expert Helma Sick advises against it

Take out loan for wedding?
Financial expert Helma Sick advises against it

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Save, invest, make provisions: BRIGITTE financial expert Helma Sick answers questions from her practice.

Help, my friend is planning an insane event

I’m a young man and I’m writing because my girlfriend wants to blow our planned wedding into an insane event. It should cost a good 10,000 euros, money that she doesn’t have and that she wants to borrow. I am totally against it. Would you please provide me with arguments.

I understand you very well, because the hype about wedding celebrations has meanwhile assumed unprecedented excesses. Regarding the loan for the festival, I can only say that this violates an iron principle, which means: Except in emergency situations, only take out a loan if it creates lasting value, for example real estate. Borrowing money for ephemeral things, such as consumer goods, celebrations, etc., is not only expensive, but also nonsensical, an absolute no-go. I know couples who are still paying off the credit for the wedding party, even though the relationship has long since broken down.

What are these abbreviations?

I have inherited a fund portfolio and am still in the process of getting an overview. One of the funds says UCITS, another UCITS in the description. What does that mean?

UCITS is the abbreviation for Undertakings for Collective Investments in Transferable Securities. In German: Organism for Joint Investment in Securities. And those, in turn, are the initials of UCITS. This is used to designate funds that meet special authorization requirements and thus guarantee a uniform minimum standard of investor protection. This standard makes it easier for the licensing authorities to offer investment funds across borders.

One insurance or two?

I am married with a second child on the way. Now we want to protect ourselves and the children in case something happens and we want to take out term life insurance. The insurance agent says we should both have such an insurance, I mean, it’s enough for my husband to take out the insurance as the main breadwinner. What do you mean?

The view that only the breadwinner should complete such a risk course falls short. If your husband dies before you, you and the children will need money. If you die before him, your husband will need money to take care of them It is therefore very useful for each of you to complete a risk course.

How much should I have in reserve?

Is there a rule of thumb as to how high an iron reserve should be? Sometimes two, sometimes three months’ salary is recommended. What do you say?

That depends on several factors: If your electrical devices are already quite old, you should take into account the purchase of a new one. If you are self-employed and have a fluctuating income, you need a higher reserve than a civil servant. If you own a property, you should budget for repairs. And when you have low running costs, you don’t need as much cash in reserve as someone who has to pay off loans. See what applies to you. Then you will know very quickly whether you should get by with two months’ salary as a reserve or, better still, plan three.

When is there a dividend for my shares?

I have invested a large amount in individual shares but would like to part with them. I have agreed with my financial advisor that I will sell the shares when the prices have risen significantly. That is the case now. But the dividend would come next month. I’ll still get it because I’ve owned the shares all year, right?

It is not that easy. The decisive day is the second day after the general meeting of the stock corporation on which the dividend payment was decided. Whoever owns the shares at this point will receive the dividend.

Helma Sick is an independent financial advisor to women. In Munich she runs the company she founded, “frau & geld”, together with Renate Fritz. Together with the former Federal Minister for Family Affairs, Renate Schmidt, she wrote the book “A man is not old-age provision”; Her memoirs appeared last: “Giving up was never an option. Why I fight for women to have their own money ”(Kösel).

Would you like to read more about the topic and exchange ideas with other women? Then take a look at the BRIGITTE community’s “Investment Forum”!

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BRIGITTE 19/2019

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