János is 28 years old, lives in a relationship, and moves between two worlds a bit. He spends his days partly in Budapest, partly in the agglomeration, where he is currently working on his own house. He doesn’t have children yet, his current life situation is more determined by construction, work and the dilemmas surrounding the next big financial step. In his spare time, he goes hiking, plays sports in the winter, and enjoys himself at the water’s edge, so he’s not the type who only checks his bank account – but now he’s come to the point where he should be even more conscious of his money.
At first glance, his income is strong: he manages a net amount of between HUF 800,000 and HUF 1 million per month. The money comes from one source, but the monthly amount is not completely fixed, it depends on how much you work in the film industry. For him, everything is now organized around construction, so his financial decisions are driven by a very specific, tangible goal.
His monthly fixed expenses are particularly low, since he lives in his partner’s property in the capital, and in the agglomeration he has his own apartment in his parents’ property. This gives him considerable room for maneuver, especially compared to many young people his age.
Among the variable expenses, approximately HUF 80,000 is spent on food, approximately HUF 10,000 on vitamins, and he does not need to spend extra on transportation because he uses a company car. The largest item is the amount spent on entertainment and other expenses: according to his own admission, up to HUF 250,000 can be calculated for this, so overall the monthly variable spending is around HUF 300–400,000.
In addition to all this, János has an average of HUF 400-600,000 left over every month, at least if he keeps his budget disciplined. You have no committed money, no separate investments, no retirement savings, and currently no reserves that you can easily mobilize at any time. The money that was set aside before was largely in cash, he put aside at a rate of HUF 4-500 thousand per month, but now almost all of his funds are flowing into the house under construction: on paper, he has no savings, but in reality he is building a fortune.
In addition, he has a 20-year-old car, and does not count on any other significant assets. According to his own estimate, if he were to sell the property now in its current state of readiness, and if we also add the car, he would be able to get out of them for around HUF 50 million. The situation is twofold: he has no liquid savings, yet his assets are considerable.
He has concrete plans for the next 2-5 years: he wants to finish the house first, then sell it, and use the money to build two more later, doubling his wealth. He considers this more realistic in the 5-10 year horizon.
Its uncertainties can also be precisely contoured. On the one hand, he fears that the price of building materials will continue to rise in the near future, which could upset his cost calculations. On the other hand, it is a question of when and to what extent his salary can increase. There is a third, even more serious dilemma: is it worth taking out the 3 percent subsidized housing loan to complete the construction. He also receives plenty of advice on this from those around him, but not from one direction. Six out of ten people say to take advantage of the opportunity, while four urge caution. He himself is more afraid of cementing himself into a life situation for 25 years where he has to count on fixed repayments of hundreds of thousands of forints per month.
The example of the young film professional clearly shows that serious dilemmas can remain even behind the seemingly settled financial situation: while building his wealth, he must constantly consider the issues of liquidity, risk-taking and the next big step. The CIB Bank expert also reviewed your situation and drew attention to the following aspects:
“It is particularly important for customers of a similar age and life situation to start managing their finances thoughtfully and to consciously build their financial portfolio, thus making their own lives easier in the coming decades. In such cases, they can ensure the achievement of their mid- or long-term goals even by saving and investing small monthly amounts. By investing a larger, one-time income wisely, they can also lay the foundations of a substantial fortune later on.” he outlined Norbert Vasas, head of savings products and services at CIB Bankaccording to whom it should not be ignored from the financial institution’s side that these decisions are often not easy to make, but whoever is faced with a financial decision, you can count on the expert help of your colleagues.
CIB Home Start Subsidized Loan APR: 3.04–3.11%*
*The total loan interest rate (APR) was determined taking into account the current legislation, its rate may be changed if the conditions change. The value of the APR indicator in the case of a loan with a variable interest rate does not reflect the interest rate risk of the loan. The condition for the disbursement of the loan is the conclusion of a property insurance contract for the real estate(s) serving as collateral, as well as a declaration of unilateral commitment contained in a notary deed with content corresponding to the loan contract.
The information is not complete. The detailed terms and conditions for the CIB Home Start Interest Subsidized Loan are contained in the General Residential Business Regulations for consumers and sole proprietors, the Special Business Regulations for consumers for credit and loan agreements secured by real estate, the List of Conditions for the CIB Home Start Interest Subsidized Loan, and the relevant customer information sheets, which can be found on www.cib.hu and in CIB bank branches. The bank reserves the right to make a credit assessment.
The subsidies that are part of the FIX 3% housing loan in the advertisement are provided by the Government of Hungary.
The article was published by CIB Bank supported it.
