During the crisis, income fell most among people receiving up to 750€

A study conducted by the Swedbank Institute of Finance showed that only 10% of respondents have sufficient reserves that allow them to assess the impact of the crisis caused by coronavirus on their ability to cope with the economic situation as minimal, the bank’s press service reports.
40% of respondents now save more than before, and 22% of the population hope in case of economic difficulties to receive assistance from the state and local self-government.

” In an emergency caused by coronavirus, the greatest concern people have is the lack or absence of savings, the possible loss of work and difficulties in caring for dependents. It is troubling that, according to the survey, income fell most among people who earned net worth up to 750 euros, which makes them more financially vulnerable and jeopardizes their ability to cope with the situation, ” said Katie Voomets, director of the Swedbank Institute of Finance.
In 17% of respondents, incomes have already decreased, and 62% are worried that incomes may decline in the near future. Most of all, income fell among service and trade workers (34%), among self-employed people (26%) and among skilled workers (19%). Most of all, people with an income of 1251-1500 euros, people aged 40-59 and families of three are most afraid of declining income. 21% of respondents do not experience a drop in income, and they are not worried about it. Residents with a net salary of 1,500 euros or more feel more confident.

” There is a common misconception that if income is low, it makes no sense to budget. In fact, the opposite is true, because when there is little money, the budget should be made especially carefully. Keep track of what the money is spent on and think about what expenses can be reduced or even stopped. Even if there is a financial reserve that allows you to maintain your previous standard of living, excessive expenses should be avoided, as the economically tense situation may last longer than the existing savings allow, ” said Katie Voomets.

Due to the tense economic situation, 61% of the population plans to reduce their daily expenses and buy only what is needed. 55% of respondents pay more attention to accounting for their income and expenses.

“Even with low income, you can save, because what matters am not the amount saved, but the formation of a saving habit. Often, large expenses in the monthly budget of a family consist of small unplanned expenses that are made imperceptibly and unknowingly. Such expenses may include goods worth several euros sold as part of a campaign that was not planned to be purchased, various subscriptions to online services that are used little or not used at all. The amount saved on such goods and services can be deferred for unforeseen expenses, ” says Kati Voomets.
The survey results show that most of the money is planned to be saved due to refusal to travel (74%), on culture, entertainment and recreation (70%), as well as on food and ordering food at home (69%). Least of all people are ready to save on health care, education and communication services.

The survey results showed that almost half of the respondents do not plan to take loans and leasing in the near future, and large purchases are postponed. Only 9% emphasize that they can quickly repay their loan obligations.

A survey on the economic behavior of the population during the crisis was conducted by Norstat in the last week of March, commissioned by the Swedbank Institute of Finance. The study involved 794 people aged 18 to 74 years