Analytics, Baltic, Banks, Financial Services

International Internet Magazine. Baltic States news & analytics Wednesday, 08.07.2020, 11:52

Latvian families plan their budgets in short term

BC, Riga, 25.04.2017.Print version
In Latvia, families tend to plan their budgets in short term, Evija Kropa, an expert at the Swedbank Institute for Finances, told LETA, citing a survey conducted by the institute.

She said that most respondents in Latvia, or 55%t, said they planned their finances on a regular basis, and 34% said they did the financial planning as needed, but most often, in 69% of cases, people planned their family budgets for only a month, so that they did not run out of money for paying their monthly bills.

"A comparatively smaller number of people have a long-term perspective, they think about "safety cushions" and future expenses. This is also shown by the fact that nearly half of respondents, or 49%, would be able maintain their existing life standards for no more than a month in case of a sudden loss of regular income," said Kropa.

People's approach to budget planning is quite similar in all three Baltic states. Most respondents in Lithuania and Estonia, 61% and 56% respectively, said they planned their family budgets regularly. The survey reveals that while young people are less likely to plan their finances, people of more advanced age take a more serious approach to financial planning. The biggest planners included retired pensioners (67%) and people with medium income (60%). Married couples were also more likely to plan their finances than unmarried couples.

In all three Baltic states, the main purpose of planning family finances has remained unchanged - to make sure that the family does not run out of money for current expenses (69% in Latvia, 62% in Lithuania and 57% in Estonia). Saving up for a "safety cushion" was named as the next most important aspect in Latvia and Estonia (41% and 47% respectively), and 33% of respondents in Latvia and 38% in Estonia said they were saving money for larger purchases. Making sure that the household's finances are under tight control is especially important to people in Lithuania, as this aspect was named by 37% of respondents in this country in comparison with 21% in Latvia and 20% in Estonia.

The survey on households' financial planning habits was conducted in March by SKDS research center, interviewing 1,005 residents of Latvia. In Lithuania, the poll was conducted by Sprinter Tyrimai, interviewing 1,012 respondents, and in the Institute of Economic Research ran the survey in Estonia, polling 1,021 respondents.

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