It is worth taking care of… financial health – Kurier Wileński

It is worth taking care of… financial health – Kurier Wileński

For the first time in its history, Swedbank created the Financial Health Index based on public opinion polls conducted in Sweden and the Baltic States. Lithuania scored 51 out of 100 possible points. – The Financial Health Index of Lithuanians is better than the other two Baltic countries. The indicator of the inhabitants of Latvia was assessed at 44 points, and in Estonia at 50 points, said the head of the Swedbank Financial Institute, Jūratė Cvilikienė. The Swedish level of financial health was rated at 71 points.

Between the present and the future

Residents of four countries in the survey had to answer several questions about their financial situation and abilities. Research shows that one-third of Lithuanians are in a poor financial situation, while 40% are poor. of the country’s population is in a stable or strong situation. The remaining 28 percent residents face financial challenges. For example, in Latvia, the stable and strong situation applies to only 26 percent. population. Better indicators are in Estonia, where 39 percent. residents are in a stable financial situation.

A healthy financial situation of a person or family, according to Jūratė Cvilikienė, is when there is a balance between the present and the future. The weakness, according to the study, is the resilience and financial security of the country’s inhabitants.

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– Income of 7 out of 10 respondents in the last 12 months exceeded or was identical to expenses. This indicates that most residents are able to maintain a daily financial balance. Nevertheless, more than half of the inhabitants are not sure that after retirement they will have enough savings to guarantee an appropriate standard of living. Only a third of residents have savings for unplanned expenses of three or more monthly incomes – emphasized the head of the Institute of Finance.

In addition, half of the residents declared that they had no debt. 36 percent responded that their indebtedness corresponded to their financial capabilities. Only 13 percent of respondents said that they had problems with loans taken out, of which 8 percent. reported that their debt exceeds their financial capabilities, and another 5 percent. added that their debt far exceeds their financial capabilities.

Read more: Financial, moral and social nothingness

New technologies

Aleksandras Izgorodinas, an economist and adviser to the Lithuanian Federation of Industrialists, says that the situation regarding the financial health of residents is changing and heading in the right direction.

“I think the problem is shrinking. Statistics show that the standard of living in Lithuania is growing, which is why residents are becoming more and more active in investing. It is worth noting that now it is much easier to invest than it was, say, ten years ago. There are easy-to-use applications that, although they do not cover a large part of the market, allow you to make elementary investments in the world’s largest companies. We have a generational change, young people who are familiar with new technologies enter adult life, which allows them to take better care of their own finances. Certainly in Lithuania, as in most of Europe, investments are dominated by the real estate sector, but this is also changing – convinces the expert in an interview with “Kurier Wileński”.

Gender inequality

The financial possibilities of women, according to the study, are 4 percentage points higher than smaller than men. 49 percent men and 53 percent. women have savings for their old age. 35 percent men and 47 percent. of women answered that they do not have and do not plan to accumulate any savings for old age in the near future. Fewer women also have money set aside for unforeseen expenses.

– It is necessary to state the fact that in our society women have less financial freedom and are more dependent on other people: on their husband, parents, state. 56 percent of men answered that they could take care of their own finances on their own. For women, we have 52 percent. On the other hand, they disagree with the statement that their savings are sufficient to ensure financial freedom, according to 31% of respondents. women and 24 percent men – stressed Cvilikienė.

According to the head of the Swedbank Finance Institute, Lithuanians should think more about the future. – At the end of the month, the lack of money is felt among people with different earnings. It is therefore obvious that the situation is not influenced by the amount of salary, but by habits. If we want to keep a balance, we need to review our own expenses and assess which ones are necessary and which can be reduced. Here we cannot omit small expenses, because at the end of the month it may turn out that these are large amounts – explained the representative of Swedbank.

Read more: Economist: “Overheating of the economy affects not only Lithuania”

Learning at school

Taking care of their financial health, believes Cvilikienė, will allow people to develop a prudent approach to borrowing. Because you have to remember that if we don’t have what to pay for now, there may also be problems with paying later.

“If we want to ensure financial resilience in the long term, we need to take care of a few things. First, we must have at least three or more monthly incomes in reserve, which can help in the event of an unexpected decrease in income or an increase in expenses. Secondly, you need to protect your finances from all kinds of unexpected accidents – reminds Jūratė Cvilikienė.

Aleksandras Izgorodinas believes that taking care of one’s financial health must start in school.

The problem is that they don’t teach it in schools. People need to be taught how to handle finances properly from an early age. They must be taught that they cannot spend all their money, that they must accumulate savings, that funds must be invested. The sooner a person understands this, the easier his life will be. The right lessons in school will automatically make people want to earn more money, the economist predicts.

Read more: It’s going to be a tough year: economic forecasts for 2023

Article published in the magazine “Kurier Wileński” No. 12(35) 25-31/03/2023

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