How the Iran War Affects Your Finances Today

What Is Happening?

According to G1, the war between the U.S. and Israel with Iran, which started in late February, is already significantly impacting the global economy. With disruptions in commercial transport and rising oil prices, many investors are moving away from emerging markets, putting their money into safer assets like the U.S. dollar. This movement is affecting local currencies, including the Brazilian real.

The rise in oil prices doesn't just affect energy-importing countries, but also everyday consumers, as rising oil prices bring about increased prices for many products, especially those reliant on transportation.

Why Does It Matter?

What happens in a distant conflict can reflect directly on your monthly budget. Rising oil prices can result in inflation, which in turn can make your day-to-day expenses more expensive. If you use the 50/30/20 method to organize your finances, this means that your needs category, which includes food and energy, may be compromised.

For example, if inflation rises to 5% or more, and you spend R$ 1,000 a month on needs, that means you'll need to spend R$ 1,050 just to maintain the same consumption level. This increase can pressure other areas of your budget, such as leisure and savings.

Practical Impacts on Your Pocket

The rise in oil prices directly impacts the cost of everyday products. Food, transportation, and even services can become more expensive. If you notice that gasoline or your energy bill has gone up, that's a direct reflection of what's happening in the global landscape.

• If the real depreciates, your imports become more expensive. For example, if the gasoline you buy costs R$ 5.00 per liter and the real depreciates, that price could rise to R$ 5.50, directly impacting your budget.
• Additionally, products that rely on imported inputs, such as plastics and fertilizers, may also see their prices rise, affecting the cost of food and other essential items.

What to Do?

Now that you understand how the Iran war can affect your pocket, it's time to take action:

• Review your budget: Take a look at your expenses. With rising inflation, you may need to adjust your spending in the needs category.
• Create an emergency fund: If you don't have one, start one. An emergency fund can help in times of economic uncertainty.
• Consider diversifying your investments: If you invest in currencies or assets from emerging markets, think about how volatility can affect them. A diversified portfolio can provide security.

The Connection to Your Financial Organization

The current situation reinforces the importance of having a solid financial plan. Using the 50/30/20 method can help keep your finances in order, even in times of uncertainty. ADXIS can be a valuable tool to help you track your expenses and ensure that you're prepared for any eventuality, whether it's an increase in product prices or changes in interest rates.