Poverty signal: Ukrainians are paying for loans … even with the cost of life

Expensive extra-class cars, luxury holiday villas, white boats, big private parties with pop-stars – a luxurious life on television which is opposed to colorless routine of millions of Ukrainians mentality undermines society. Many people in the attempt to simulate the life of beau monde and to afford at least a whim, recourse to bank loans. But what to do when it comes to issues of everyday life, which in comparison to the income of the majority are so expensive that people have nothing to do but to arrange a loan?  
 Dangerous temptation
Among the motivations that push people to borrowings specialists distinguish three categories: immediate consumption, emergency situations and investments. 
The most common is the so-called instalment. According to the economist Igor Grabar, loans are taken by people who are lacking money for some serious purchase. These loans are taken once per 1-2 years. Loans for a car are taken every 5-7 years, while mortgage is often arranged only once in a life. He says, that now reputable banks do not give loans for such acquisition to the insolvents, as now banks set higher requirements to the customers than they had before the crisis. 
Therefore, small loans are becoming popular. Much of the population is ready to buy everything on credit – from computers to mattresses – and small banks, in their turn, offer any terms of loans – with a card or cash, with surety and pledge or without anu of them. Thus, to afford, for example, some expensive thing, one sometimes needs to take the money as a consumer loan, and often bring some valuables to the pawnshop, borrow from relatives, friends, etc. 
Among the advantages of commodity loans is that one slowly pays the debts having receivesd the goods for immediate use. But this raises another question: is it justified to go into debt, for example, for a new phone of the latest model for 5000 hryvnias?
 The opinions on this issue may vary, but the majority will say: "If you have not earned enough, there is no sense to buy that luxury".      
Would our incomes allow to pay the loan? 
When it comes to emergency situations (collapsed roof, someone in a family has health problems), there’s no space for choosing the variants and a loan can often be the only possible way. 
When the loan is taken for investment, then it can also be considered quite reasonable. 
But keep in mind: every business start requires proper planning and calculation. 
Otherwise, you can not only lose benefits, but also the last penny. As it happenned recently to one of the parliamentary candidates of Chernivtsi region, a 59-year-old entrepreneur Volodymyr Tokaryuk who during elections, according to preliminary information, took the last position in his district and committed a suicide. By one of the versions, the man killed himself because he took bunch of loans for the elections race which could hardly be returned after losing the elections.
 Ukrainian Luxury
We used to understand those people who take the credit to purchase a housing or car, but retailers have already offered, for example, to buy shoes by dividing their price into several equal monthly payments. To buy good quality shoes for 100-200 hryvnias per month seems to be quite adequate idea. As in most cases you would spend the same amount to buy only Chinese stuff which gets spoiled in two weeks. A pair of more or less qualitative autumn shoes in the store costs at least 500-800 hryvnias, as well as outerwear.
In each such store there is a bank employee who tells everything in detail. The amount of the purchase is divided into five parts. The first 20 percent of the price are paid immediately, and the rest – for four months. Not a bad system, but this model may lead to the fact that people may not or will not want to save – so they are not accustomed to live according to their financial capabilities. 
However, this way of marketing demopnstrates the purchasing power of the population: while an avarage European does not only borrow but even does not save the money to buy a thing , this thing for some reason had become a luxury for Ukrainians. 
 Trouble of this way of life
According to the State Statistics Committee, the average salary in Ukraine today is 3063.52 hryvnias. And the prices are so high that a significant portion of this money people have to spend on food and utilities, which are constantly rising in price. Also, the state declared free medicine and education, though actually both cost a lot. So, to afford clothes, not to mention the cultural events and leisure activities, most Ukrainians stay with minimum amount, especially young people and pensioners who receive less than 1000 hryvnias after taxes. 
For example, a young couple from Kherson decided to settle a score with their lives due to poverty – in September this year, the police found them hanged in the woods, the 22-year-old man and 24-year-old woman. Investigators found out that people could not earn their living and took a consumer credit for a thousand hryvnias, bought food for the last dinner and ropes. Having left a farewell note in a shed, they went into the woods and said goodbye to their life …