What is Financial Emergency?

Financial emergency is any unexpected situation that requires money you didn’t plan to spend. It can be a layoff, a health problem, a car repair or a broken appliance.

Common Examples

  • Job loss (need 3-6 months of expenses)
  • Medical emergency (surgery, treatment)
  • Car repair (R$ 2.000-5.000)
  • Broken appliance (refrigerator, washing machine)
  • Property problem (leak, plumbing)
  • Unexpected fine or tax

How to Prepare

The best protection against financial emergencies is the emergency reserve:

  • 6 months of expenses for CLT
  • 12 months for self-employed/individual entrepreneurs
  • In investments with daily liquidity (Tesouro Selic, CDB)

What to Do if You Don’t Have a Reserve

If the emergency arrives and you don’t have a reserve:

  1. Don’t use overdraft (interest rates of 15%/month)
  2. Don’t use credit card revolving (interest rates of 16%/month)
  3. Request a payroll loan (interest rates of 1-2%/month)
  4. Anticipate FGTS or 13th salary
  5. Sell something you don’t use (marketplace)
  6. Negotiate direct installment with the creditor

Prevention

After resolving the emergency, prioritize building your emergency reserve. Start with R$ 1.000 (already covers most small unexpected expenses) and increase it up to 6 months of expenses.