The effect of costs on budgets of various households in Latvia is neatly illustrated by the fact that 54% of families are forced to save up money or borrow money to send their child or children to school, according to results of a survey by Norstat Latvija.
Results show that only 46% of interviewed parents can afford to prepare their children for the school year with their monthly wage alone.
All other parents have to look for additional financing.
29% of respondents take money from personal savings, which they accumulated over the months and years from their wage or other sources of income. Another 14% make savings specifically to prepare their children for school.
At least 11% of interviewed families cannot afford to cover school-related expenses and have to borrow. 3% borrow money from relatives and 2% borrow money from the bank.
Another 4% use various traders’ options to purchase goods in leasing or to separate the total price into instalments depending on its size.
Results of the survey by Norstat show that borrowing is the most needed by large families. Households that have four children of school age make savings for their children’s school needs more purposefully. They also actively use the option to reduce immediate expenses.
4% of these families borrow money from the bank. As many families ask for financial assistance from relatives. 19% purchase goods in leasing or with the option to pay later.
If there are more than four children, the duty of providing clothes and preparing them for school is put on their parents’ and other relatives’ shoulders. The survey found that 29% of very large families borrow money from their relatives.
Bigbank Latvia branch manager Edgars Surgofts says preparing children for school is one of the biggest sources of yearly expenses for parents.
“We found in the survey that 64% of families spend up to EUR 300 for each of their child’s needs. Most parents understand this. This is why they make savings in advance in the event for of a financial shock,” explains Surgofts.
He said if parents still haven’t started making savings for the new school year, now is the time to start, because currently banks offer favourable terms for term deposits and deposit accounts.
“By leaving a couple of dozen euros every month until the start of the next school year, it is possible to save up the necessary amount. Another simple method is putting savings on a deposit account for a year and collect accumulated amounts next year,” Surgofts recommends.
Also read: Programme: trade union believes teachers’ rights should be strengthened