Purchase of discounted products, search of cheaper goods and services and more frequent meals at home – these are the most common strategies Latvian residents use to save up money and reduce the impact from the rapid price climb, says Swedbank Institute of Private Finances expert Evija Kropa, commenting on data from the institute’s study.
64% of respondents said they had started paying more attention to prices of products, picking discounted products more often.
The next most popular strategy used by 38% residents is buying cheaper brand products and services. 34% of residents save money by going to cafes and restaurants less often and eating at home more often.
Generally inflation has forced 87% of Latvian residents to change their habits.
According to data, often people decide to do things on their own instead of paying service providers. One-third of respondents said they performed many different repairs, did gardening and other menial tasks on their own.
Empty shelves and absent categories of certain goods further reinforce another approach now used by Latvian residents to preserve financial balance in a situation of growing prices: 27% admit having started making reserves of products to avoid paying more for them later.
“Although average wage has increased, each individual person’s financial situation is very challenging, because absolutely everyone is subjected to a rapid price rise,” explains Kropa. “Inflation does not discriminate – pensioner or wealthy person. Everyone needs to deal with this situation as best they can.”
Kropa explains that planning and managing your budget is very important because it allows people to focus on priorities and respond as quickly as possible in the event of a crisis.
“At the same time it is clear each family’s budget may reach a point when there is nothing left to optimise. Then it will be necessary to take into account the variables of financial welfare, such as costs and income. It is also necessary to consider increasing income by looking for another job, learn new skills and offer them on the labour market, as well as look into eligible benefits,” said Swedbank Institute of Finances expert. “The next heating season is not far away – it is a question of a couple of months. People should prepare for it as timely as possible and start making financial reserves now.”
“Summer months are less of a burden utility payment-wise. This is why residents should consider setting aside some money for the autumn and winter season. Summer is a good time to start making some additional income. However, there are certain groups of residents for which these solutions won’t work – expenses are already optimised to a minimal survival level and health is too poor to secure additional income. In such cases it is important to contact service providers and try to negotiate payment schedules, as well as inquire about social aid options on a municipal and state level,” stresses Evija Kropa.
The survey on residents’ strategies was carried out in June. A total of 1,003 Latvian residents aged 18 to 74 years were interviewed online, Kropa reported. (BNN/Business World Magazine)
