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The spending and saving habits of Brazil’s rich and poor

. Nov 11, 2019
The spending and saving habits of Brazil's rich and poor Photo: Alf Ribeiro

In an interview with newspaper Folha de S.Paulo last Sunday, Economy Minister Paulo Guedes heaped praise on his own economic plans and said he’d encourage the habit of saving among the poor in order to fund their retirement plans. “A boy, early on, knows he’s a responsible human when he has to save money. The rich capitalize their resources, the poor consume it all,” he said, dismissing soon thereafter a question about whether a poor person is able to save money.

Last Monday, the same newspaper ran an editorial praising Mr. Guedes for working “in the right direction,” but Mr. Guedes was left red-faced two days later when his “mega” pre-salt oil auction was an utter political flop due to a lack of bidders.

Every

ten years or so, the Brazilian Institute of Geography and Statistics (IBGE) polls families on how they spend their money in their so-called Family Budget Study. The latest edition of this research, published in August, has some interesting insights into how Brazilians earn, spend and save their money.</p> <p>The definition of what is rich in Brazil may startle foreigners. To be among the top 3 percent of wealthy families in Brazil, the household must make USD 5,775 a month—less than USD 70,000 a year. While representing the highest group in Brazil, this bracket would be around the middle point of income distribution in the U.S. in 2018, according to the U.S. Census Bureau. The full Brazilian wealth distribution is as below:</p> <div class="flourish-embed" data-src="visualisation/908697"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p>Brazil’s poorest families go through their income five days before the end of the month, while the richest can save about seven days&#8217; worth of pay every four weeks. Wealthy families take on average slightly more than one and a half days (about 30 hours) to spend what the poorest families consume in an entire month.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/908648"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <h2>How much can be saved?</h2> <p>The poorest families (about one-quarter of Brazilian households) end the month roughly USD 69.00 in debt. The next bracket up, representing one-fifth of families, will end the month saving the equivalent of just two dollars. The richest families can save an average of USD 1,702 a month, or nearly five months of bills for poor families.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/908647"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p>And what do these families spend it on? The poorest families spend two-thirds of their income on basic necessities: food, housing, and clothing. The richest families spend only one-third on these needs. They also spend over a third on other things, such as entertainment, culture or private retirement plans. Spending on education and transport becomes larger as income increases. </p> <div class="flourish-embed" data-src="visualisation/908631"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p>

 
Marcelo Soares

Marcelo Soares is a Brazilian journalist specializing in data journalism and reader engagement.

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