The Central Bank announced this week that the indebtedness of families with the financial system reached a record in April this year, reaching 58.5%, which should hinder the plans for our much-desired recovery of the economy. To help those who are like this to make a comeback, I have separated 7 attitudes for families to put into practice.
Por Me Poupe!
I bet you’ve seen an ad like this: “Family Sells Everything”! Well then, start organizing right now to sell your family! Just kidding! More or less. The Central Bank announced this week that the indebtedness of families with the financial system reached a record in April this year, reaching 58.5%, which should hinder the plans for our much-desired recovery of the economy. This indicator measures the relationship between the balance of debts of families in the reference month and the accumulated income in 12 months.
“Ain, Spare Me!, don’t make me bite my nails in such distress! But what does that mean?”
Yeah, I was really worried about you! But calm down, I’ll explain everything, Mepoupeira! and Mepoupeiro!, and I’ll even give tips to help anyone in this situation. Well, simply put, this means that, of every R$100.00 in family budgets, R$58.80 is committed to debt. In other words, the economic crisis driven by the pandemic, made the indebtedness of families increase, with the total value of credits for people growing more than their income.
So, if you or your neighbor or your friend’s family or your girlfriend’s family is in this situation, PAY ATTENTION, I’ll help everyone to review the family budget, reverse this bullshit and run away from new debts.
Debt X Default
Let’s start by clarifying something very important and that usually makes everyone confused: the difference between debt and default. And to bring the right thing, I went to the dictionary. Check it out:
Act or effect of owing something to someone; obligation to give, do or pay something (usually some amount of money) to another; obligation.
In other words, debt is what a person has to pay from now on: the loan made to buy a car, the mortgage on a house, the credit card bill, the money borrowed from a friend, etc. By taking on these commitments and obligations, the person took on debt. They may even be paying those debts on time, but if you look to the future, she has things to pay. People without realizing it has created a scenario for a default to arise if something gets out of hand.
I · an · dim · plên · ci · a
Failure to comply with a contract or any obligation; non-compliance, default.
In short, it’s when things get out of hand and the person fails to pay the debt. The default situation clearly shows the risks of indebtedness, because when a person becomes indebted, he/she is creating an obligation, often not sure how much he will earn in the future. Indebtedness is okay, but revenue is not.
More unstable economy due to the pandemic
Economic data like this have shown that the difficulties the country is going through at this time tend to continue for a while, so it is important to pay attention to them. Every week, including our variable income muse, Professor Mira analyzes the Focus Bulletin, from the Central Bank, which brings the medians of the main indicators in the country and which serve as a thermometer for the economy in general – and which impacts directly in your pocket. So, the more you know how to understand them, the more you will know how to dodge problems and even recognize opportunities.
So, coming back: indebted families (those who have debts already foreseen) and who are seeing their members’ income fall month by month (for various reasons: they lost their jobs, decreased sales, closed their businesses, terminated contracts, had reduced wages, etc.), are resorting more to credit and, automatically, are running the risk of becoming more and more in default.
And a sad reality knocks on the door of a significant part of these families, with the current crisis: indebted and without income, they resort to credits to pay not only debts on financing and loans but for basic bills such as rent, food, water, and electricity. Unable to pay the bills, families are financing consumer spending.
“Spare me! from heaven, the definitions of ‘sell lunch to buy dinner’ have been updated, is that it?”
That’s right, my pupil and my pupil. But to help those who are like this to swim back to a haven and escape the evil wave of default, I have separated these attitudes for families to put into practice.
This family is very close and also indebted…
“Save me!, the song is wrong. But my family and I are in debt and we need to get out of this situation! What do I do?”
1. Know how much the family earns
The first thing is to know how much the family earns, how much they spend, and where they spend it. Have a clear sense of what the family’s income is, adding up everyone’s exact earnings. For those who do not have a fixed income, which varies over time, you should consider an average value. In general, those who are indebted may consider a more realistic income estimate. For example, looking at the economic situation, consider the following: if this month the economy is similar to last month, the estimated income for this month will probably be more or less similar to the previous month. If you have no notion of values, consider a slightly lower amount to make sure you create a plan that you can keep.
2. Know how much the family spends
The second thing is to know, in fact, how much the family spends and where it spends, considering everyone. All members must know their consumption habits. How much do you spend on supermarket, food, pharmacy, housing, the value of energy bills, water, gas, etc? Make a complete mapping, it can be in a notebook, a table, spreadsheet, or application, to visualize how much people spend.
It is recommended that everyone in the family, without exception, do this control for a period of 1 to 2 weeks. Had a coffee on the street? Write it down. He parked his car in the parking lot or took a ride: write down. Paid by debit or credit card: note. Did you pay in PIX or billet? Write it down. AND ATTENTION: make a note of everything you paid with cash. Often the problem is precisely there because as the song says: “money in your hand is a whirlwind…”. You can only have general visibility if you take all this into account!
3. Set priorities
After mapping everything you spend, the key is to understand what is a priority. So, just put in order: what is a priority and what is not. Priority is given to essential consumption bills: water, electricity, rent, food, medicine, etc., in short, what you cannot afford not to pay. Within this consumption, it is important to make sure there is no waste or if some part of this consumption is not neglected.
So it’s checking everything: am I not buying more than consumption and I’m not throwing something away? Am I not leaving unnecessary lights on? Are there measures at home that I can take, together with my family, to reduce expenses with water, electricity, telephone, etc.? This is essential to know how much the family is spending on essential bills and to understand whether or not these expenses can be reduced.
4. Cut out non-essential consumption
After cleaning up the waste, the time has come to cut consumption of everything that is not essential and that will not cause problems for your life. Some examples: cutting out the weekend pizza and the various orders for the app for food, clothes, and shoes, gifts, that is, reducing consumption of non-essential goods and, in some cases, not going out, or choosing nearby places, to save fuel or the value of driving. Instead of spending this money, it can be used to organize the family budget.
5. Pay off debts
This point is very important: if possible, debts already incurred should be considered a priority and should be paid off, as outstanding debts have running interest and if they are not paid, they increase and generate new debts. Some recent measures may make it easier: the New Super-indebtedness Law recently launched with new rules for negotiating and recovering credit, and Sarasa’s “Limpa Nome” campaign, which allows debt negotiations with discounts of up to 99%. In this post, I explain everything correctly.
6. Have a lot of discipline and don’t go into new debt
Put discipline in this mission: both to write down what you spend and to let go of the things you like to do. This special Poupecast brings 5 attitudes that SAVE you from debt! Take a moment, click on it and listen to what Nath Arcuri tells you about the credit card installments that pretend to be non-debt. Listen and save your money from another debt and protect yourself from the interest that runs like wolves!
7. Maximum alert: for those who are indebted and in default
But if things are bad and the person is in debt and in default, with no money to pay the bills, the main advice is to try to save at least the essential bills. Save as much as possible to guarantee housing (if you can’t live with someone and save rent), food, water, electricity, and medicine (if you can’t get it at the health center). Another thing is to try to understand what you can do to improve and get out of the lashcada or lashcada situation! Look at life, realistically, and ask yourself: what are your skills and characteristics? What can you do to improve? Where can you try to find an opportunity? Anyway, can you reinvent yourself?