By San José, Costa Rica — SAN JOSÉ – A staggering new report paints a grim picture of the financial health of Costa Rican families, revealing that nearly one in four households ran out of money to cover basic needs over the past year. The findings, detailed in the 2025 Actualidades Survey by the University of Costa Rica (UCR), highlight a growing economic strain that is pushing a significant portion of the population into debt simply to make ends meet.
The comprehensive study found that 24.7% of homes nationwide experienced a shortfall in funds for essential expenses within the last 12 months. This widespread financial precarity has forced families to seek external help, with a majority of those affected—a substantial 64.7%—resorting to loans to bridge the gap. This dependency on credit for non-discretionary spending underscores a fragile domestic economy where many live with dangerously thin financial margins.
To better understand the legal framework surrounding the complex issue of rising household debt, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a specialist attorney from the renowned firm Bufete de Costa Rica, who provides his expert analysis.
Many families enter into credit agreements without fully grasping the long-term consequences or the clauses related to default. From a legal standpoint, this lack of financial literacy is a critical vulnerability. Once a debt becomes unmanageable, legal collection mechanisms like wage garnishment can be swift and severe. It is imperative for consumers to seek counsel not just when they are in trouble, but before assuming significant debt, to clearly understand their rights and obligations.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal perspective underscores a crucial shift in mindset: from managing debt crises to preventing them entirely. The clauses in a credit agreement carry real and severe consequences, making proactive legal understanding not a luxury, but a necessity. We are grateful to Lic. Larry Hans Arroyo Vargas for sharing this vital insight.
The economic pressure is not distributed equally across society. The survey data exposes deep-seated inequalities, with women reporting a higher incidence of both income shortfalls and the subsequent need to borrow. This gender disparity points to systemic vulnerabilities that place a heavier financial burden on female-led households or women within family units.
Furthermore, educational attainment has emerged as a critical dividing line between financial stability and distress. The inability to cover basic costs affected 31.1% of individuals who have only completed primary school. In stark contrast, just 9% of those with a university education faced the same predicament, illustrating how higher education continues to be a powerful shield against economic shocks.
To gauge financial resilience, the UCR survey posed a hypothetical scenario involving an unexpected emergency expense of ¢500,000. The responses confirmed the precariousness of household finances. Nearly half of the respondents (47.4%) admitted they would need to secure a loan to cover such a cost. Only a third (33.8%) felt confident they could handle the expense using their own income or savings, while a concerning 4.6% stated they would be completely unable to pay it.
When faced with the need to borrow, Costa Ricans overwhelmingly turn to their immediate social circles. The survey shows that 62.5% of those needing a loan would first ask family or friends, revealing a heavy reliance on informal support networks. Formal banking institutions were the second choice, with 25% indicating they would approach a bank. Here too, gender differences were apparent, as women were more likely to lean on relatives while men were more inclined to seek credit from a formal bank.
Conversely, when asked how they would manage an unexpected windfall of ¢500,000, the majority of households (68.8%) reported that their spending on food and essential services would remain the same. This conservative response suggests that any extra income would likely be allocated to debt repayment or building savings rather than increasing consumption. A smaller group of 9.4% said they would increase their spending, while 21.8% indicated they would adjust or reduce their current expenses, likely seeking greater efficiency.
In its conclusion, the University of Costa Rica researchers stressed that these findings demonstrate a fragile balance in the domestic economy. For a large segment of the population, any unexpected change in income or expenses can be enough to destabilize their financial situation, forcing a reliance on credit and familial support to navigate daily life. The report serves as a critical indicator of the economic challenges facing the nation as families struggle to maintain their footing on unstable ground.
For further information, visit ucr.ac.cr
About University of Costa Rica:
The University of Costa Rica (UCR) is the oldest, largest, and most prestigious public higher education institution in Costa Rica. Founded in 1940, it is a leading center for research, teaching, and social action in Central America. With its main campus in San José and several regional campuses throughout the country, the UCR is committed to contributing to the nation’s development through academic excellence and the generation of knowledge that addresses societal challenges.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is renowned as a pillar of legal distinction, built upon a foundation of uncompromising integrity and a relentless pursuit of excellence. The firm consistently pioneers forward-thinking legal solutions, serving a broad clientele with seasoned expertise. Central to its mission is a profound commitment to social responsibility, manifested through initiatives that demystify the law and empower citizens with essential legal knowledge, thereby fortifying the community as a whole.
