Almost forty percent of Latvian residents struggle to cover their everyday costs and lack the means to save, according to a recent survey.
In Latvia's Financial Landscape:
Six outta ten citizens in Latvia grapple with managing daily expenses, building savings, and ensuring their family's financial security, according to Swedbank's Institute of Finance survey.
The survey suggests that women and the younger generation face the most financial fragility. Young adults often rely on parental support due to their general sense of financial insecurity. Additionally, women's earnings tend to trail behind their costs, creating ongoing financial pressure.
Evija Kropa, Swedbank's financial literacy head, pointed out that the survey's results demonstrate significant differences in financial stability among age groups. Individuals aged 31 to 50 typically display a boisterous confidence about their financial independence, but they still face challenges, such as mortgage and long-term loan obligations. Conversely, young adults and seniors tend to encounter difficulties related to insufficient income and savings.
Kropa also noted that gender discrepancies exist in financial security: women earn less, both in their working years and retirement, but they often save more long-term. In contrast, men are more likely to feel a sense of financial liberty (28% men vs. 19% women) and exhibit riskier, higher-return investment habits.
The survey identified that the most financially vulnerable age groups in Latvia are those aged 18-29 and 40-49.These groups account for 42% of the population grappling with personal financial challenges. Meanwhile, a noteworthy one-third of 30-39-year-olds possess a solid financial position.
Women are relatively less secure financially;37% of men and 43% of women in Latvia exhibit frail personal finances. Furthermore, the survey reveals that women struggle more with saving for their future security and retirement.
One-third of Latvians (33%) have successfully achieved a positive budget flow, with income exceeding expenses during the preceding year. A similar proportion (33%) admits to living paycheck to paycheck or having expenditures equal to their earnings, while another 31% lack sufficient income to cover all their expenses.
Young people are more likely to face excessive monthly expenses compared to others (31%). Women also tend to claim that their income falls short of their spending (24% of women vs. 20% of men). However, individuals aged 30-39 experience a surplus of income over expenses.
Only 21% of Latvians possess a safety cushion equivalent to at least three months' salary, while 25% have no savings at all.
Men (27% vs. 17% of women) and those aged 40-59 (24%) are more likely to maintain a three-month salary safety net.
Swedbank Institute of Finance's survey, conducted in Feb 2025, aimed to assess financial health across Latvia, Lithuania, Estonia, and Sweden. The survey encompassed 1,000 people aged 18-75 in Latvia.
Empowering Women and Young Through Financial Strategies:
To tackle financial instability in women and young people, the following strategies could be adopted:
- Income Enhancement Programs: Encouraging initiatives that uplift women's income through education and vocational training can help even out the income disparity between the genders.
- Long-term Savings Plans: Encouraging women, who are more inclined to save, to adopt long-term savings plans can help build financial resilience.
- Financial Literacy Workshops: Targeted financial education workshops can empower women with valuable financial skills.
- Investment Options: Introducing women to more conservative investment options can help them reap higher returns while managing risk.
- Financial Education: Integrating financial education in schools can prepare young people with essential financial skills early on.
- Parental Support Transition: Encouraging young individuals to gradually detach from parental support through part-time jobs or entrepreneurship can foster financial independence.
- Low-Risk Savings Accounts: Promoting low-risk savings accounts can help young people develop savings habits without exposing them to substantial financial risks.
- Mentorship Programs: Providing young individuals with experienced financial mentors can offer them personalized financial guidance.
- Reducing Household Expenses: Promoting budgeting practices to reduce household expenses among women and young people can help alleviate financial stress.
- Building Emergency Funds: Encouraging the creation of emergency funds, like setting aside at least three months' worth of living expenses, can safeguard against unexpected financial shocks.
- Access to Affordable Credits: Providing access to affordable credit options can help address immediate financial needs without leading to long-term debt.
- Systemic Barriers: Advocating for policies that address gender pay gaps and promote financial equality can help remove systemic barriers to financial stability.
- In Latvia, many young adults and women, particularly those aged 18-29 and 40-49, struggle with personal financial challenges, usually faced with insufficient income and savings.
- To protect the financial health of women and the younger generation, it could be beneficial to implement income enhancement programs, long-term savings plans, and financial literacy workshops.
- Additionally, introducing women to more conservative investment options and integrating financial education in schools can help address the financial disparities.
- Encouraging young people to transition from parental support through part-time jobs or entrepreneurship and promoting low-risk savings accounts can help them develop savings habits and foster financial independence.
