25% of interviewed Latvian residents aged between 18 and 74 have not made any savings in the past six months, according to data from a survey performed by “Norstat” and ordered by “Bigbank Latvija”.
The majority of people who have made no savings are in Vidzeme (32%) aged between 60 and 74 years (32%). Youngsters aged between 18 and 29 years replied that they have made no savings less often – 18%.
“Survey data also show that the habit of saving or not saving correlates with education, i.e. 39% of respondents with primary education and respectively 32% of respondents with general education have not accumulated in the last six months. On the other hand, only one in five respondents with higher education in the last half of the year has not set aside money for savings,” comments “Bigbank” Latvian branch manager Edgars Surgofts.
He adds that the question about savings made in the past six months was chosen intentionally, because it helps demonstrate the financial decisions people have made in the summer months, when public utilities are cheaper.
“Savings made in preparation for periods when costs could rise also create a sense of security and control. Therefore, savings are not only the value that we can buy for this money, it is also emotional peace. Survey data shows that many have chosen to put money aside, this is a positive trend,” said Surgofts.
Meanwhile, 24% of interviewed residents who had accumulated savings in the last six months indicated that they do not intend to spend their savings in the near future, while 51% will divert them to different purposes.
On average, 14% of Latvians plan to spend their savings on travel. These are mainly Riga residents, office workers and the unmarried, with a personal income of over EUR 1 500 per month.
The next position, where the money set aside in the last six months is spent, is for growing daily spending, namely for utilities, food, transport, children’s needs in school, kindergarten and the like. On average, this version of the answer is more often chosen by residents of Riga and large cities, persons with primary education and families with two or three children.
Meanwhile, 7% of residents plan to use the savings for larger home purchases – furniture, kitchen appliances and the like, while just as many will invest in the repair of an apartment or house.
In turn, 6% of respondents plan to spend savings on Christmas gifts, which are more often indicated by young people aged 18-29, students, families with three children, as well as people with personal income up to EUR 150.
“There is also a reverse side to any data. The survey results also show that 75% of respondents were still able to set aside money, and according to the answers we also see that there was a savings for a specific purpose. This is clearly a positive trend because it demonstrates financial discipline. The next step is putting your savings to work, for example, on a savings account,” said Surgofts.