After Black Friday discounts, product prices at Christmas should rise (Credit: Marcelo Camargo/Agência Brasil)
The Central Bank’s Monetary Policy Committee (Copom) will announce this Wednesday (8) the new basic interest rate for the economy, the Selic, and the market’s expectation is that the rate will leave the current 7.75 % per year, to 9.25% per year.
And with this scenario of high interest rates, combined with inflation that should close the year above 10%, the purchasing power of Brazilians is quite limited at the end of the year. Not only reduced purchasing power, but also more expensive borrowing, according to Maurício Godoi, economist and professor at Saint Paul Escola de Negócios.
+ Savings may become more attractive with the Selic hike this week
The Central Bank movement, which has been increasing the Selic rate since the beginning of the year until now (it was 2% in January), is an attempt to curb inflation and reduce the exchange rate crumbling. In practice, the BC will try to reduce demand with higher prices and wait for companies’ stocks to increase again. Until this inflationary mismatch returns to more acceptable rates, you will continue to juggle to close the month’s budget.
André Bernardes, finance specialist and CEO of Zippi, a fintech that offers a weekly credit card to self-employed people, notes that Brazilians will find high prices in the goods and services sector this year-end and early 2022. close to the annual adjustment), automobiles, monthly fees from health plans and educational institutions. In short, the values must follow the market movement”, he points out.
Purchasing scenarios with the highest interest rates
And thinking about how difficult it will be to make the end-of-the-year shopping, pay the bills and save money, we asked the experts how you can plan thinking about some basic scenarios: “Is it better to buy in installments?”; “Should I fall under the overdraft?”; “What should I do this Christmas: buy or not gifts and wait for prices at the turn of the year?”.
Cash purchases
For Maurício Godoi, a good way for you to think about purchases in installments is to increase the number of these installments on your credit card, in 10 interest-free installments, for example. Despite this, he recalls that “Brazilians are paying for a more expensive product, even if it’s parcel”. Not to mention the possibility of indebtedness ahead, complicating your life.
The tip is to assess the need to buy that product and avoid a major headache.
Another point he raises is to carry out a credit operation with interest rates that are not rising. He cites the example of financing a car, which previously added interest of less than 1% per month and now runs at around 3% per month, causing the value of the car to grow up to 4x the initial value. So if you need credit, look for smaller, more attractive rates.
André Bernardes adopts a more conservative path. “If possible, pay in cash. If you choose to pay in installments, it is important to only make a debt if it is within your budget. If it is not feasible, it is worth accumulating the total value of what you want to buy and pay in cash, as the price adjustment of the products tends to be lower than the interest on debts”, indicated the Zippi specialist.
Overdraft
A refuge in the life of the Brazilian who spends the month hanging from the bank, the overdraft is the realization of profits by financial institutions, some charging up to 600% a year in interest. Maurício Godoi believes that the ideal is to opt for overdrafts in very short-term scenarios, from two to four days at most, and not to incorporate the overdraft into the salary, as if you were considering the modality within your source of income.
“Avoid using this resource as extra income, as it is not. Even though it is a credit with easy access and easy approval, it can become an enemy of financial control, as the interest charged varies, but the rate is usually high”, complements André Bernardes.
Christmas shopping: what to do?
For Christmas shopping, experts suggest separating all the money committed to fixed bills and evaluating whether, with what’s left, you can buy something you need, that you can actually pay for.
“We have to be careful not to fall into the price trap. So, today, with the inflation process taking place, with the ease of credit operations, in general, in particular interest-paying credit cards, Brazilians have to be very careful, first, not to pay more, second , do not fall into the trap of ’10 installments without interest and no discount’, and see the need to purchase this product”, said the economist at Saint Paul.
Don’t buy, save and wait for a better scenario in 2022
Both Maurício Godoi and André Bernardes are betting that this is the best scenario so that you don’t get in trouble for the rest of the year. After a significant increase in Black Friday sales, retailers must revert to higher prices and you will inevitably pay more for a product. Remember that with the beginning of the year, the tax slips to be paid will be renewed on the table.
“Indebtedness is a real villain and the beginning of the year is accompanied by several accounts such as IPVA (vehicle tax), IPTU (property tax), school enrollment, purchase of school supplies and uniforms, readjustments in monthly payment plans. health, rentals and educational institutions. Therefore, the best attitude is to carry out financial planning”, warns Bernardes.
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