82% of Families Are Indebted: What This Means for You

What’s happening?

According to G1, the indebtedness of Brazilian families reached a new record in July, with 82% of consumers reporting some type of debt due. This marks a significant increase compared to previous years and highlights that credit cards continue to be the main villain in family finances.

While delinquency saw a slight decline, the proportion of families with over half their income committed to debts increased. This indicates that although some people are managing to pay their bills, financial pressure remains high.

Why does this matter?

The rising debt rate reflects a challenging economic scenario where access to credit has expanded, but interest rates remain high. Many Brazilians have adopted a culture of installment payments, which can lead to an ever-increasing cycle of debt. For example, if you earn R$ 3,000 a month and allocate 30% (R$ 900) to pay debts, this could compromise your ability to handle other essential expenses.

Furthermore, lower-income families are feeling even more pressure. For those earning up to three minimum wages, indebtedness reaches 84.9%. This situation is concerning because many of these consumers are dealing with variable income, making financial planning even more difficult.

What changes for you?

If most families are in debt, this can be a warning sign for you. Being indebted doesn't necessarily mean being delinquent, but it’s essential to understand the difference between indebtedness and delinquency. You might be paying your bills on time, but if more than 50% of your income is committed, it's time to reassess your budget.

For example, if you have R$ 2,000 a month and are spending R$ 1,200 on debts, this leaves little room for other expenses. You should ask yourself, "Am I living within my means or getting further into debt to cover daily expenses?"

Concrete actions you can take

To deal with this situation, consider the following actions:

• Reassess your budget: Use the 50/30/20 method to organize your spending. Allocate 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.
• Avoid using credit cards: If the card is the villain, limit its use or eliminate it until your finances are balanced.
• Negotiate your debts: If you’re struggling, seek to renegotiate your debts through programs like Desenrola 2.0.
• Create an emergency fund: With a fund for emergencies, you avoid resorting to credit in unexpected situations.

Connecting with your financial organization

The increase in indebtedness should serve as a wake-up call for all of us. It is crucial to have a solid financial plan. ADXIS can help you organize your finances using the 50/30/20 method to ensure you live within your means while also starting to build a financial reserve.

With the current economic scenario, it is more important than ever to have control over your finances. After all, what’s at stake is your ability to plan for the present and the future.