2013-05-02
Survey: a large number of households are able to save, but only every other family plans its income and expenses
Although a large share of households every month are able to set away a part of their money for savings, more than half of families don’t plan their most important monthly earnings and expenses. This was shown in the Survey of the Financial Behaviour of Households, conducted on order of the Bank of Lithuania.
“In examining the answers of the respondents, the importance of financial education and planning becomes clearer—in deciding whether to save or borrow, those surveyed take into account their personal experience or the experiences of friends,” says Sigita Veidaitė, Senior Economist of the Financial Stability Department of the Bank of Lithuania.
Almost half of those surveyed per month save up to LTL 500, 6.4 per cent of respondents—from LTL 500 to LTL 1,000, and 2.3 per cent of families save more than LTL 1,000. One third indicated that they don’t save anything. The most popular means of saving are an account or deposit at a credit institution or savings held in cash at home. Mostly people save not for a specific goal, but to protect themselves from unforeseen events—decrease in income or sudden expenses.
One third of surveyed households have financial liabilities, respondents mostly borrow for consumption or house purchase. Households with a smaller income often have consumer or other types of loans, or have borrowed from friends or relatives; one out of ten indicated that they have an instant credit company loan.
More than half of those surveyed (53.4%), having some sort of financial liability, claim that these liabilities are a burden for their households. Respondents that felt a financial burden attempted to improve their situation by contacting a credit institution regarding the changing of the conditions of their financial liabilities. Those surveyed sought to decrease their monthly instalment—they used the possibilities of loan repayment deferral, extension of the repayment period—or they asked to review the interest rate.
The terms and conditions of financial liabilities are more actively changed by those households that have at least one member with a higher education. This shows that financial education is necessary—households have to be more interested in their possibilities to improve the conditions of their liabilities.
In assessing future prospects, respondents are most worried about increasing utility bills and the rising price of food products. 35.6 per cent of respondents believe that housing prices stabilized and that within the upcoming 6 months they will not change.
The complete Review of the Survey of the Financial Behaviour of Households (475.1 KB download icon) is published on-line at the Bank of Lithuania website.