Debts consume more income for women than men – 03/24/2024 – Market

When architect Aline Pinheiro, 41,’s salary drops, she finds herself in a cycle that is difficult to break out of: she has to use almost all of her income to pay off debts. “It’s living just to pay the bill,” she says. She is part of a group of women who are in debt, accumulating responsibilities and earning a lower salary.

A survey by the CNC (National Confederation of Commerce in Goods, Services and Tourism) showed that debts are consuming more of women’s budgets: 30.5% of their monthly income was destined to pay off loans in January 2024.

The number is the highest since May 2021, the beginning of the series. Meanwhile, the share of men’s income used to pay debts is 30.3%.

The data is part of a sample from CNC’s Peic (Consumer Debt and Default Survey), carried out with approximately 18 thousand consumers from the capitals of Brazil and the Federal District.

Women’s debts compared to men tend to be different. According to economist and doctoral candidate at Insper Giovanna Úbida, while women accumulate more debt related to credit cards and store vouchers —which allows them to extend their monthly budget—, men are more likely to go into debt due to car and house financing. and personal credit.

It was with the credit card that Pinheiro encountered problems. Her income was committed to a payroll loan and, in an attempt to cover one saint to discover another, she was confused with the installments.

Things started to go wrong in 2016, after being in a car accident when he was still financing it and had just bought a house. “I had huge losses,” says she, who is also a public servant.

Debt was one of the factors that led the architect to suffer from disorders such as anxiety and depression — today she is on medical leave. The financial area, as pointed out in the report “Exhausted”, by the NGO Think Olga, is the one that has the greatest impact on the mental health of Brazilian women, who feel overwhelmed. The study shows that black women are the most dissatisfied with this situation.

The evolution in family structure, characterized by the increase in women leading households and assuming greater financial responsibility, is also one of the causes of this debt.

A study by FGV-Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation) reveals that, from 2012 to 2022, the number of households led by single mothers increased by 17.8%, jumping from 9.6 million to 11.3 million .

Meanwhile, the pay gap persists, with women earning less than men. According to IBGE data last year, the difference between salaries is 22%.

“Often this leads women to opt for more flexible positions or seek informality, aiming to reconcile their professional responsibilities with personal and family demands”, says Úbida.

“Faced with a lower salary, women dedicate more effort and allocate a more significant fraction of their income to cover the same amount of debt.”

Women also continue to seek qualifications to emerge in the job market, but education is another area that generates a lot of debt. Nasdaq shows that women are seven times more likely to take on high-value student loans. This trend, according to Úbida, serves as a warning for Brazil.

They are, for example, the majority of beneficiaries of Fies (Student Financing Fund), a Federal Government program. Of the 205,177 enrolled in the program in the first half of 2023, 67% were female (139,209). For the economist, this highlights a continuity in the pattern of greater female indebtedness that could extend into the future.

Personal finance expert Carina Morais sheds light on another aspect that can generate more debt in women’s lives: divorce. She states that she sees many cases in her care of women who end up responsible for all the care and expenses of their children.

That’s what happened to her own family when her parents separated — seeing her mother deal with money, she was inspired to specialize in finance.

“The woman who finds herself in this situation and who doesn’t have a financial reserve, doesn’t know how to plan and take care of her money, will certainly go into debt.”

Taking care of yourself also takes care of women’s income. Pinheiro says that her profession always required a good appearance, which made her spend without thinking too much. “This ends up having an impact on our budget, because we always have to have our nails done, our hair up to date, and wearing nice clothes.”

The architect also always wanted to please her nephews, buying gifts here and there. “All of this contributes to debt, in addition to financial disorganization. The higher cost of living, with lower income, is likely to make these women go into more debt”, says Morais, the financial administrator.

It was she who helped Pinheiro to rethink such attitudes and help reorganize his debts after being the victim of a payroll scam. “It is important that we seek help and support because there is a way out, there is a solution. For us it is not easy, women overload themselves and think they can carry the world on their shoulders”, says the architect.

Financial knowledge would be one of the keys to avoiding default and facilitating the management of your finances. “The main tip is to seek information,” says Morais. “In addition to recording expenses, this woman needs to analyze her budget, understand what is happening in her financial life, make a financial diagnosis.”

In addition to individual actions, Úbida, the economist, states that public and private initiatives are crucial to expand women’s access to financial information and offer better conditions for paying off debts. However, they take time. In the short term, planning is the best solution.

“It is vital to understand how the debt will be paid off, how much needs to be saved monthly and how soon the debt can be fully paid off,” he says.

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