Getting Into Debt Is Not a Sin if You Follow These 10 Useful Tips

    MEIC's Household Financial Survey identifies results that coincide with the OCF debt survey, regarding the financial habits of citizens

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    Debt will continue to be a determining factor for the creation of personal assets.  Acquiring a loan represents, for most Ticos, the only way available to buy a house or vehicle, travel, study and even pay for a health procedure.

    A healthy practice

     From the perspective of the Office of the Financial Consumer (OCF), going into debt in itself is not a sign that the personal or family economy is going in the wrong direction; On the contrary, planned debt, together with a savings discipline, is a healthy practice that allows you to enjoy financial health and create the conditions for a manageable retirement;  Uncontrolled debt, on the contrary, will represent a problem, when a large part of people’s income is absorbed to pay debt.

    Given the relevance of what indebtedness means, the OCF recognizes the importance of Costa Rica studying the issue rigorously and systematically, as the National Institute of Statistics and Census (INEC) does, with the Household Financial Survey ( Enfiho).

     “This type of study allows us to more precisely understand the behaviors of financial consumers, so they should be encouraged and become a mandatory reference for bills, so that legislative efforts are more effective,” said Danilo Montero, director general of the OCF.

     The INEC survey allows us to confirm some results that the OCF had identified in the national debt survey, carried out in October 2020 and which will be updated in August of this year.  Although the INEC investigates households and the OCF studies refer to people over 15 years of age, both allow a fairly coincident snapshot of the most important financial habits of citizens, for example:

    Those who have debt and the type of frequent credit

    The 2020 OCF study determined that around 7 out of 10 people had some debt, regardless of the type of credit or the amount.  In the case of INEC, it is determined that at least half of the households have some debt.  Likewise, it is confirmed that mortgage loans are the most frequent type of credit, both at the level of households and individuals.

     Financial inclusion

    In both studies it can be seen that financial inclusion is limited in socioeconomic groups with less favorable conditions.  At the same time, it is confirmed that credit card balances are not the main source of debt for Ticos in general.

    Income commitment for debt payment

    One of the most relevant data from the INEC survey is that 73% of households in the country have committed less than 30% of their net income, a value that aligns with the OCF finding of 2020, in that at least half of the people did not exceed that same indicator of 30%, which is considered internationally as the measure that reflects fairly healthy finances.

     Likewise, the INEC survey highlights that 12% of households dedicate more than 50 colones of every 100 colones of net income to paying debt installments.  In the OCF investigation, it was determined that around 10% of people had to dedicate more than 62% of their income to paying fees.

     “In summary, both studies confirm two very important things: it is not true that the general population is highly indebted, as is often mentioned.  However, it is clear that an important group of citizens is currently in a very difficult situation, due to the large proportion of their income that they must dedicate to paying debts of all kinds.  This group is the one that should be the priority attention of public policies.  There are already several studies that prove it,” concluded Montero.

    Resonance Costa Rica
    At Resonance, we aspire to live in harmony with the natural world as a reflection of our gratitude for life. Visit and subscribe at Resonance Costa Rica Youtube Channel
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    1. Many Costa Ricans rely heavily on debt to finance the acquisition of personal assets such as homes, cars, education, travel, and healthcare. Planned debt is viewed by the Office of the Financial Consumer (OCF) as a good practise for financial well-being, together with disciplined savings. Unmanaged debt, though, may become problematic and eat up a sizable percentage of income.

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