“The young generation of the population knows how to save no worse than their parents. The largest share of young people in Lithuania is 20 percent. – indicated that their savings exceed 3 thousand. euros. This is a sufficiently solid financial cushion that can be used in the event of unexpected expenses. Maybe that’s why the majority of young people, when faced with unexpected events, tend to use their savings first, instead of relying on the help of friends or parents”, comments Eglė Dovbyšienė, member of the SEB bank‘s board and head of the Retail Banking Department.
Latvian youth are the worst at saving
According to the research conducted in three Baltic countries, a fifth of the young people surveyed in Lithuania stated that they had accumulated over 3,000 euros in savings. In Estonia, there were even more of them – 23 percent. In Latvia – at least – 14 percent.
Company photo/Eglė Dovbyšienė
Compared to the neighbors, the lower financial capacity of Latvian youth is evidenced by the fact that even 27% of respondents in this country admitted that they have no savings at all. In Estonia, 19 percent answered this way. respondents, in Lithuania – 17 percent.
The 50-30-20 rule helps to accumulate a financial cushion
E.Dovbyšienė advises those who are starting an independent financial life and who are considering what amount of savings is sufficient to familiarize themselves with the 50-30-20 rule. This rule is universal and applies to persons with any income.
According to the rule, 50 percent the income a person receives should be spent on essential expenses such as housing, food, transport and service charges. 30 percent should go to variable expenses: leisure activities, cultural events, clothes, footwear, unexpected purchases. The rest is 20 percent. – should be for saving and investing.
A sense of financial security is usually provided by a financial cushion of 3-6 months of necessary expenses. However, for a young person with no financial obligations, a reserve of up to 3 months of necessary expenses may be sufficient.
Lithuanians stand out for their independence
SEB Bank’s research showed that more than half of the surveyed young people in all three Baltic countries tend to rely on their financial support. 58 percent in Lithuania. of the respondents indicated that in the event of unexpected expenses, they would first use their savings. 53 percent noted that it would reduce other expenses and save even more.
At that time, 23% would tend to turn to relatives or friends for help. respondents. The same number said that when faced with unplanned financial challenges, they look for additional opportunities to earn.
In comparison, young people in other Baltic countries often look for financial help from friends and relatives. For example, in Estonia, 34% solve unexpected expenses with the help of others, and in Latvia – 40%. of interviewed young people.
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