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Dositeo Amoedo, from AEPF: “Having a good financial education is vital to making the right decisions”

On the occasion of the celebration of VII International Forum on Quality Financial Educationnext June 7 in Santiago de Cosmpostela, we have spoken with Dositeo Amoedo, president of the Association of Educators and Financial Planners (AEPF).

Among the issues raised to the expert are the subject of inflation and its impact on the Spanish self-employed, the rise in interest rates and other economic aspects. Remember that you still have time to attend the forum (face-to-face or online), by registering here.

MuyPymes: What solutions can the self-employed take to alleviate inflation?

Dositheus Amoedo: Right now, in Europe especially, inflation is mainly driven by energy prices. At the local level, the escalation that we have been experiencing in this sector since last year is a large part of the expenditure of most self-employed workers and SMEs. Not just the facility spend, but also the supply spend they need to produce their products.

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It is also remarkable lack of raw materials in some sectorsespecially in those that depend on microchips (cars, above all) and other materials such as minerals and rare earths.

According to a barometer published by the Association of Self-Employed Workers (ATA), only 17% of those surveyed affirm that their activity has not been affected by inflation. The vast majority, however, believe that the rise in electricity and fuel prices has forced them to raise prices as a measure, since otherwise they would be incurring losses.

It seems that this is the most immediate measure, since looking for new suppliers or refocusing the supply chain are not as simple and short-term options as raising prices.

Another way to overcome and be better prepared for these challenges is with continuous training. As in other sectors, the economy is constantly evolving, and only with training can you be prepared for the challenges that continually arise, both personally and professionally.

For this, there are different institutions that help people who require it to get more training. We, for example, have organized a forum on financial education for June 7 in Santiago de Compostela, in which, among other topics, we will try to give tips and advice to the self-employed and entrepreneurs to be able to better manage assets, both business and personal. In addition, we will also comment on habits to implement that can help the survival of an SME in the current context.

Having a good financial education is very important to be able to make the right decisions, both in private and professional life, and it is knowledge that unfortunately cannot be learned by magic.

MuyPymes: How will the rise in interest rates announced by the European Central Bank affect small businesses?

Dositheus Amoedo: It will affect negatively, there is no doubt. The flow of “free” money that has been this last decade was of great help to SMEs; either to make reforms, buy premises, pay suppliers, etc. It is an essential tool for freelancers and small businesses.

Perhaps now before the summer, a moment defined by the European Central Bank to raise ratesNow is a good time to take out a loan before it becomes unprofitable to do so. Whether it is to modernize facilities, optimize processes or purchase machinery, a loan can now make a difference for a self-employed person.

European funds must also be taken into account, which are going to be a great cushion for many of these people and companies if they no longer have the private financing that they had until now.

MuyPymes: What can financial education contribute to the self-employed and entrepreneurs?

Dositheus Amoedo: Knowledge, skills and tools to efficiently manage their businesses and separate their risks from the well-being of their families.

This will be the main topic that we will deal with in our financial education forum that we organize on June 7 in Santiago de Compostela, in which you can participate in person or online, and whose registration is free and also useful, even if it is not possible to attend at the set times, because it can be viewed later. The impact of inflation or the rise in interest rates on loans and mortgages, the protection of the self-employed, both present and future, current issues such as crypto assets and the investment of savings, etc. All this is collected in a series of tools and knowledge that we will make available to freelancers and entrepreneurs.

Financial education as a tool is key to facing difficulties and will help them organize their personal and family finances from professionals, which is a mistake that many people make on a regular basis. Managing money with independence and discretion is crucial to be able to be successful professionally and have a better quality of life in the family.

MuyPymes: What role are financial savings products going to play now?

Dositheus Amoedo: They will be essential to save the savings that are needed in the future and that they do not lose purchasing power. They will be strategic, for example, to be able to have a quality retirement, because the cuts that we will have in pensions will not allow us to live on the public pension and much less if the minimum base is quoted, as 87% of the self-employed do. The role of financial products will be so important that acquiring knowledge and skills to manage them and to relate to financial intermediaries will be the key to success.

Given the current inflation, we all know that having money idle is basically losing it: either you allocate it to substantial improvements in your company that can give you a competitive advantage or improve your production, sales or customer service processes, or it is best to have it invested in funds based on the time horizon in which it may be needed so that it reports us some benefit and can reduce the impact of inflation.

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