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Prices have risen and uncertainty about the future advises saving.  Find out how and where

Prices have risen and uncertainty about the future advises saving. Find out how and where

CNN Portugal spoke with an economist to understand whether the country should prepare for a recession and compile several saving tips that can help mitigate the effects of a potential long-term economic crisis.

With war in Ukraine with no end in sight, the times ahead are not easy. Inflation continues to rise and fuel, housing, and raw materials are lagging behind. Memorizing becomes more and more important, albeit more difficult.

Is a recession approaching? For Ricardo Ferraz, professor of economics at the University of Losofona and researcher at ISEG, it is still too early to point to this scenario. “We know that the latest forecasts from international institutions indicate a slowdown in the growth rate of the Portuguese economy over the next few quarters. But, at least for the time being, you do not expect the country to enter a recession.”

“However, there is a tremendous amount of unpredictability in the world, so any macroeconomic scenario has a great deal of uncertainty. Interruptions in the energy supply, whether prices will continue to rise, whether interest rates will rise more than they have been. It has already been announced, causing a huge shock to consumption and investment.”

In the economist’s view, “a prolonged economic stagnation will certainly be synonymous with profound wealth destruction. If household consumption and corporate investment collapse, bankruptcy and layoffs will occur.”

Since the beginning of the year, everything has become more expensive and income has not kept pace with these increases. According to Ricardo Ferraz’s accounts, “the prices of food and beverages increased by 7.6%,” and “the prices of housing, water, electricity, gas and other fuels increased by 7.7%.” Only fuel had an “astronomical 20%” increase. And all this within five months.

To try to mitigate these challenging times approaching, CNN Portugal also spoke with Natália Nunes, of Deco’s Financial Protection Bureau. Despite the difficulties, there are still exercises that can be done on a daily basis that at the end of the month can save dozens of euros.

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From buying housing, fuel and groceries, these are some of the recommendations of the professionals.

Public transport or private car?

  • if public transport userIf you are not a single social card user, the main tip is to find the card that best suits your needs. “Sometimes there are municipalities that have some discounts, for people over 65 or for young people, and people don’t even realize that,” Deco recalls;
  • If you live relatively close to work, You can always choose to go on foot or by bike;
  • If you really have to use my own carSince no public transportation provides the answer, choose to share the car with other people, whether with co-workers or friends who work in the same place or in the same area. This way you can share fuel or toll charges;
  • Before car fuelAlways try to compare the prices of different gas stations and go to the ones that offer the cheapest. a The website of the General Directorate of Energy and Prices It can help you with this search;
  • avoid using the car for short distances that you can do on foot;
  • Try to get one Wallet-friendly driving: Avoid aggressive driving, try to maintain a constant speed, and do not always accelerate and brake. Keep the engine rev as low as possible, by using higher gears that provide low rpm.

Get ready to go to the supermarket

According to Natalia Nunes, it is “essential” for families to know “how much they spend on food per month,” so they can set savings goals. After this analysis, here are the most practical tips:

  • Make a list before you go shopping. And maybe it’s not a good idea to do it in your head. The best thing is to look at your pantry and write down what you really need, to avoid buying items that, after all, you still have to spend or consume;
  • Make a meal plan It can also help you to have a stricter shopping list, because in the end you only buy what you know you will be consuming;
  • Budgeting. Don’t go shopping without capping what you want or can spend. According to Natália Nunes, “It’s important to go shopping for a while” so you can “find and compare all prices.” Do not forget that the cheapest prices are not always at the level of the shelves, they can be higher or lower;
  • Don’t be attracted to promotions. It is important to have an idea of ​​the original price of the product without the promotion to see if the promotion is actually paying off, even when it is a promotion for strap;
  • Still in the field of promotions, you should Be aware of the health of the products. This is because it can be beneficial to take two types of detergent for example, but the same is not true for yogurt. If the deadline is too short, “we run the risk of spending money”;
  • Don’t go to the supermarket hungry. This is one of the factors that lead the consumer, as a rule, to buy more than he really needs.
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Try to prepare as many meals at home as possible, trying to avoid food waste.

Is it time to renegotiate your home loan?

Natália Nunes states that the most important thing in this area is to “look at our effort rate”. to provide home loan It must not exceed 35% of net income. “This is the golden rule,” he explains.

If your mortgage loan premium occupies about 45% of your net monthly income, you should try to understand if the terms you have are those that are being exercised in the market. If you are not, you should contact the institution where you took out the home loan and try to renegotiate.

You should also check whether the spread has been adjusted according to the values ​​that are being exercised in the market. as such? Do some simulations on bank websites or on Banco de Portugal Customer Portal. These emulators can be used by anyone and they are a “good resource for checking status”.

You should also check the security deposit associated with your home loan. When a loan is given for the purchase of a house, a contract is also concluded with an insurance company, as a rule, people forget to check whether these values ​​​​are still adjusted. The rule is the same for spreads, run simulations or contact insurance brokers.

What costs do you pay to the bank?

If you have one bank account, which almost always has costs associated with it, i.e. maintenance costs, consider asking to convert that account to a minimum banking account. According to Deco, it’s a way to “cut costs”;

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You may have already wondered if it still makes sense to have a savings account. Natália Nunes sees it only if it “doesn’t have a very high cost”. For this, “it is necessary to seek and negotiate.” However, a savings account remains the most efficient way to put some money aside.

If you don’t have a savings account, there are two things you shouldn’t do: keep the money saved in your checking account, i.e. in the one you use every day; Or even keep the money in an envelope at home.