Do you feel that your budget situation is in danger of draping due to inflation? Here’s how to determine if you just need to review your lifestyle or if you need to be accompanied.
This is the number one concern of the moment, ahead of the environment, health or energy shortages. (1): nearly one in two French people are worried about their purchasing power. In fact, the sharp rise in prices (5.5%, excluding tobacco, on average over the last six months) is weakening a growing number of households, as shown, among other things, by the acceleration of registrations in the files of the Bank of France, FICP and FCC, following payment incidents.
Overdraft, consumer credit, over-indebtedness… A fairly tough crisis is looming for the French
This increase in stress is all the stronger as it affects a population that is often powerless in the face of the deterioration of its situation. We have a financial education problem: France is a country where people are afraid to talk about money, notes Jean-Louis Kiehl, president of the Crsus Federation, which supports households in financial difficulty.
Result: without a clear vision of our budgetary situation, we tend to wait too long to get help when their situation deteriorates. Bad idea: At the slightest doubt about the balance of your budget – as soon as, for example, the overdrafts come back every month – you should not hesitate to ask for help, advises Pauline Dujardin, project manager at Crsus.
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The key to any financial diagnosis
Before you get to that, there’s a relatively simple way to determine if you’re living beyond your means and adjust your lifestyle accordingly: watch your rest live. It is even the key to any financial diagnosis.
If you have taken out a mortgage, you are probably already familiar with the concept. Calculating your remaining living is, in fact, part of the tools used by your banker to assess your ability to meet your future monthly payments. The remainder to live is what you have left each month once you have paid your fixed charges (bills, taxes, transport, monthly credit payments, etc.). In summary, it is the money available to feed you, clothe you, entertain you or to save.
How to calculate your remaining living?
There is no standard for the calculation of the remainder to live: within the framework of a granting of credit, for example, each bank can apply its own recipe. However, here is the calculation method used by the Crsus Federation in its support activity for financially fragile households.
The remainder to live is the result of the following formula: total resources — total fixed charges — total credits
Here are the elements to consider in the calculation:
Resources How to calculate your remaining living?: wages, pensions; allowances (unemployment, RSA, etc.); movable income; real estate income; pensions and family benefits, scholarships, aid, etc.; other resources (reimbursements, bonuses…); family aids.
Fixed charges: rent / charges; electricity / water / heating; telecommunications (telephone / mobile / internet / TV); income taxes; housing tax; property tax; Home Insurance; car insurance; mutual; transportation; schooling / canteen / childcare; alimony.
Credits: real estate loans, credit insurance; consumer credit.
They are not taken into account, however, non-fixed chargesthe amount of which may vary from month to month: food, hygiene, clothing, precautionary savings, leisure, etc.
To facilitate the calculation of your remaining living, the Crsus Federation offers a web application named BGVfor Budget High Speed. It allows you to automatically calculate your remaining living, thanks to open banking technology (open banking) and the analysis of your banking history, in compliance with the regulations on personal data. BGV also allows you to define the amount of envelopes devoted to food, leisure or savings, and to simulate your rights of access to social assistance.
Alert thresholds to know to prevent slippage
Knowing his rest to live is one thing. Knowing how to interpret it is another. To do this, you must start by calculating your remaining living per consumption unit (UC).
Based on its database of approximately 40,000 complete budgets, Crsus has calculated average thresholds for entry into pr-, badly- or over-indebtedness, using as a reference what remains live per UC. Obviously, the situation of each household is specific. But crossing these statistical thresholds should serve as an alert, and a trigger to seek support.
In a household, the first adult counts as 1 consumption unit, other people aged 14 and over for 0.5, and those under 14 for 0.3. Thus, a couple with two children under 14 represents 2.1 consumption units (CU). Then all you have to do is divide your remaining live by this number of CUs.
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Below 600 euros per unit, you enter the pre-debt
Do not panic, however: the situation can still be restored, by modifying your consumption habits and by setting up budgets by item.
Below 400 euros per CU, you enter into bad debt.
It then becomes urgent to seek support: contact one of the 500 Budget Advice Points present in the territory. These are free reception structures, labeled by the State to support people in financial difficulty.
If you are already experiencing recurring overdrafts and/or are having difficulty paying your monthly loan payments, also contact your bank or your credit institution. The latter have obligations in terms of supporting financially vulnerable customers. In particular, they will be able to suggest solutions for rescheduling your debt.
Below 100 euros per unit, you are in a situation of over-indebtedness.
Being supported becomes crucial, especially for filing an over-indebtedness file with the Banque de France. This will allow you to benefit from recovery measures, in conjunction with your creditors.
(1) Source: JDD survey published on September 3