A Swedbank study looking at the living expenses of families in the capitals of the Baltic states of Estonia, Latvia and Lithuania reveals that while net salary has grown the fastest in Vilnius over the past three years, it remains the highest in Tallinn at EUR 1,708 a month. While Estonians get to keep the most money after fixed expenses, Tallinn is also more expensive than Riga and Vilnius.
Swedbank conducted a study comparing the average household income and the three main fixed expenses – food, utilities and public transport – in the capitals of the Baltic States, to determine, which capital left families with the most money after these costs. The study was based on a family living in an unrenovated apartment building with 70 square meters of space in the capital city, where there are two underage children and both parents earn the average salary for that city.
Since 2021, the average net salary has significantly increased in all three capitals. The net salary of the household used for the study has grown the most in Vilnius, by an impressive 42%. During the same period, the net salary rose by 29% in Riga and by 24% in Tallinn.
The monthly income of families is also influenced by child benefits. Among the Baltic States, Lithuania offers the highest child benefit, with a monthly sum of EUR 192.5 for two children. Estonia follows with EUR 160 and Latvia with EUR 100.
“When calculating the total net income of the household used for the study and the child benefits received by each country, the family’s income totals are EUR 3,576 in Tallinn, EUR 3,126.5 euros in Vilnius and EUR 2655 euros in Riga,” said Mari-Liis Jaager, head of Swedbank’s Institute for Finances.
To compare which Baltic capital had the best balance between income and expenses, Swedbank assessed the cost of living in three categories: food, utilities and public transport.
The results of the study showed that the most expensive food basket is in Tallinn, where a four-member household spent EUR 737 per month on food, which accounted for 21% of the family’s income. According to the Statistics Office, food prices in Estonia have risen by 43% over the past three years.
In Riga, the necessary groceries for a family cost EUR 640 per month, representing 24% of the family’s income, and in Vilnius, it cost EUR 544 euros, which accounted for 17% of the family’s income.
In the 2021 study, the comparable food basket was also the most expensive in Tallinn, costing EUR 536 and constituting 18% of the income. The cheapest food basket was in Vilnius, where a four-member family spent EUR 442 per month, followed by Riga with a cost of EUR 483.
“The steep rise in food prices over the last three years has been felt by absolutely all residents of the Baltic States. Since it represents one of the largest expenses for families, its impact on the budget is significant. Additionally, food selection is not always optimized, often resulting in a much higher amount spent on food. As can be seen, the increase in food prices has had the greatest impact on the wallets of Tallinn’s families, and thus Tallinn’s highest income does not necessarily provide the most affordable living conditions,” said Jaager.
Families living in Riga must contend with the highest utility costs (excluding rent or loans) – EUR 288 per month.
In Tallinn, these expenses reach EUR 260 and in Vilnius, they are at EUR 209 per month.
Compared to 2021, the costs for residents of Riga have increased by more than half, or EUR 108, while in Tallinn, expenses have risen by EUR 87 over three years, and in Vilnius by EUR 85. Heating costs have seen the highest increase across all cities.
Assuming that families use only public transport for movement in the capital, a family living in Riga spends EUR 60 per month on it, and in Vilnius, EUR 64, whereas Tallinners still benefit from free public transport.
However, the study’s findings reveal that families living in Tallinn experience the most expensive daily life. The three main fixed costs – food, utilities and public transport – total EUR 997 per month for Tallinn families, followed by Riga with EUR 988 euros.
Life is the cheapest in Vilnius, where families spend EUR 817 per month on food, utilities and public transport.
Thus, after covering their main fixed costs, Estonian families retain 72% of their income, families in Riga keep 63% and those in Vilnius have 74% of their income remaining.
“This year, Tallinn took over from Riga as the most expensive capital, but at the same time, families in Riga are left with the least amount of money after paying for food, utilities and transport costs,” said Jaager.
Swedbank based its calculation of the market basket on the lowest prices of the same or similar goods from the three most used online grocery stores. The data collection for the analysis occurred in all Baltic capitals from March to April. The income data are from 2023. (ERR)