The number of indebted households broke a record in 2022; the expert points out the main reasons for debt
Brazilians’ indebtedness has reached a record in the last year, according to data from the Consumer Indebtedness and Default Survey (PEIC). The survey proved it 77.9% of households ended 2022 in debt.
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According to Carina Costa, who guides entrepreneurs, “there are several reasons that lead to debt and it is important to understand these causes in order to find effective solutions”. Therefore, she issues a warning to situations that usually lead people to the accumulation of debts. You can see what they are below:
Unemployment or reduced income
Losing your job or having a significant reduction in income can cause serious financial problems. The lack of stable cash flow in this scenario makes it difficult to meet financial commitments, leading to debt.
financial mismanagement
Lack of financial management skills is also the main cause of debt, as many families do not have adequate financial planning, do not control their expenses, do not save and often spend more than they earn.
Excessive use of credit cards
Irresponsible use of credit cards is a significant factor in debt. Lack of control over spending, coupled with high interest rates, can lead to a vicious cycle of increasing debt.
Influence of consumerism
Social pressure and the culture of consumerism can lead people to spend beyond their means. The search for statethe acquisition of material possessions and the need to keep up with trends can be bad business.
unexpected medical expenses
Health problems can arise unexpectedly and lead to high medical bills. Without an adequate financial buffer or health plan, the cost of medical bills can be higher than expected.
financial emergencies
Unforeseen situations, such as unexpected home repairs, car trouble, or natural disasters, can require immediate and significant expenses. In the absence of an emergency reserve, people may resort to loans and credit cards, generating multiple debts.
Lack of education and financial awareness
Without the skills and knowledge to manage finances effectively, people are more likely to get into debt. So, look for information on financial education to manage your personal finances and avoid debt.
Source: Terra
Ben Stock is a lifestyle journalist and author at Gossipify. He writes about topics such as health, wellness, travel, food and home decor. He provides practical advice and inspiration to improve well-being, keeps readers up to date with latest lifestyle news and trends, known for his engaging writing style, in-depth analysis and unique perspectives.
