Renata Flores said the criteria for choosing between paying off debts and starting to invest during a segment on Jovem Pan News.

This guidance comes as millions of consumers face financial instability, making the choice between liquidating liabilities and building assets a critical step for long-term stability.

Flores said the decision depends on the specific type of debt, the associated interest rates, and the personal financial goals of the individual. She said that not all debts are equal, and the cost of borrowing must be weighed against the potential returns of an investment.

For those looking to invest, Flores said PicPay CDB options. She said that these include choices with daily liquidity for those needing quick access to funds, as well as alternatives designed for medium- and long-term growth.

The need for such financial planning is underscored by data from Brazil. According to one report, 67.4% of Brazilian families were in debt in July, marking a record high [1]. Additionally, approximately 72 million consumers were listed as negative, or inadimplentes, in Brazil [2].

Flores said organizing finances is the first step toward choosing the most effective strategy. By comparing the interest rate of a loan to the yield of a low-risk investment, consumers can determine if they are losing more money to debt than they are gaining through savings.

Other financial milestones can also influence these decisions. For example, the second lot of the 2023 Income Tax refund was scheduled for release on Friday the 30th [3], providing a potential source of liquidity for debt settlement or investment.

“The decision depends on the specific type of debt, the associated interest rates, and the personal financial goals.”

The high volume of consumer debt in Brazil creates a systemic need for financial literacy. By prioritizing high-interest debt over low-yield investments, consumers can prevent the compounding of interest from eroding their net worth, while liquidity-focused tools like CDBs provide a safety net during economic volatility.