Spanish families less vulnerable to economic setbacks
The economic crisis has not gone unnoticed by anyone. In particular, the situation of many families was compromised. The economic setbacks they became harder to deal with depending on what situations. However, the passage of time has made this context better and that these nuclei can better face the vicissitudes in this issue.
This has happened as indicated by the BBVA Foundation in his publication Essentials where he has attended to the debt situation that families have. In this work it is clear that the economic amount allocated by these nuclei to this purpose has fallen to values before the beginning of S. XXI, which indicates that the effects of the crisis on households have been reduced.
Percentage reduction
The results of this work indicate that the total debt of Spanish households is the 99,4% of its gross disposable income, which represents a cut of more than 30 points over the gap that existed with the eurozone ten years ago. Regarding the percentage of the income that households allocate to the debt service (annual payment of interest and amortization of the principal), it stands at 11.6%, a level below that registered at the beginning of the century and 7.3 percentage points lower than the maximum reached in 2008.
When the indebtedness of the families is excessive, the debt service absorbs a significant part of the disposable income in the homes. This situation means that the nuclei are very vulnerable to falling income or an increase in interest rates, and requires cutting spending to the detriment of consumption. This was the situation of Spanish families in 2008, when the crisis broke out, which made its impact greater.
This scenario has been left behind. Thus, the deleveraging that Spanish families have made in recent years has been intense, which in a context of falling interest rates, thanks to the performance of the European Central Bank, and the recovery of income, has significantly reduced their financial vulnerability. Therefore, Spanish families are better prepared than in the recent past to support a potential rise in interest rates.
Since the weight of household debt reached a maximum percentage of gross domestic product (PIB) of 85% in June 2010, has reduced its weight by almost 24 percentage points, to stand at the end of 2017 at 61.3%, which means a deleveraging of 203,000 million euros.
The intense de-indebtedness has reduced the gap that existed with both the EU-28 and the eurozone, which reached 20.4% and 22.4% in 2008, respectively, and which in 2016 has been reduced to 2.5 and 6.8 pp. At ranking of the EU-28, the household debt / GDP ratio of Spain is in the ninth position. Of the large European economies, Italy (41.5%), Germany (53.1%) and France (57.2%) have lower levels of indebtedness, with the United Kingdom (82.6%) standing above Spain.
Tricks to save in family
Although the recovery of the economic crisis has contributed to the improvement of family finances, we must also take into account some keys for savings within households and thus achieve greater security in the face of setbacks:
- Close faucets and turn off light bulbs. If there is no one in the room or a tap is being used, why continue spending? You have to pay attention to the consumption that is carried out in a personal way, as well as that of others.
- Air conditioning and heating. Both in summer and in winter, extreme temperatures make it look for a contrast with the air conditioning machines. Better to leave them at an appropriate level instead of uploading or downloading them.
- Shopping list. To go with a preconceived idea of what is going to be bought will cause that home does not arrive more articles of which they are needed, avoiding an expense greater than the family economy can support.
- Search and compare. There are many needs that the family must face, especially in the closet background.
Damián Montero
