Why are Brazilians in debt despite rising income?

What is happening with Brazilian finances?

According to G1, the government launched the New Desenrola Brazil, a program aimed at helping up to 20 million people renegotiate debts, totaling up to R$58 billion. Despite falling unemployment and rising average income, Brazilian family debt reached 80.9% in April, the highest historical level, with a delinquency rate of 29.6% among families. This situation creates a paradox: how can it be that, even with improved employment and income, Brazilians remain in debt?

The increase in debt is due to a combination of factors. The high cost of living, expensive credit, and dependency on financing to maintain consumption explain this reality. After the pandemic, Brazil saw the Selic rate drop to 2% per year, encouraging credit. However, inflation skyrocketed, and with it, interest rates rose again, making credit more expensive and complicating family financial life.

Practical consequences for your daily life

With the Selic rate at 15% per year, families are becoming increasingly burdened. The income commitment to debts reached 29.3%. This means that, upon receiving R$3,722 salary, for example, nearly R$1,090 is already committed to debts, leaving little room for essential expenses like food, housing, and transportation.

The survey indicated that 71% of Brazilians are buying less than they did last year. This reality can be uncomfortable and reflect a constant financial pressure. The fact that the cost of basic items is rising, such as rice and meat, aggravates the situation. Thus, even if you have a higher income, less money is left for what really matters: saving and investing.

What you can do to improve your finances

In a scenario of increasing debt, it is essential to take practical actions. Here are some tips:

• Review your budget: Use the 50/30/20 method. Allocate 50% of your income for needs, 30% for wants, and 20% for savings and debt payments.
• Renegotiate your debts: Take advantage of programs like Desenrola Brazil to try to reduce your debt amounts.
• Increase your financial education: Understand better how interest works and avoid compromising your income with installments that seem cheap.
• Avoid excessive use of credit: Try to pay your bills in cash and avoid accumulating new debts.

Financial education is crucial! By better understanding your consumption habits and the impact of debts, you can make more conscious decisions and thereby improve your financial health.

Connecting with ADXIS

ADXIS can help you effectively organize your finances. With a platform that applies the 50/30/20 method, you can see where you are spending, which areas need attention, and how you can save for a more peaceful future. Don't let debt dictate your financial choices. Take control of your financial life and seek the freedom you deserve!