
According to Kantar Kantar Emor, a study commissioned by LHV, in the case of the loss of permanent income 32% of working people in Estonia would not be able to continue more than one month. Compared with 2022 year this indicator has increased twice. “The gap between people’s attitudes to finances and their actual behavior continues to grow. Although a majority of Estonian people consider savings important, 68% of respondents save less than 10% of their income. “Unfortunately, the low savings level makes the people in Estonia very vulnerable
to the unexpected, ” Sander Pikkel, head of the investment services LHV Sander Pikkel. The greatest financial uncertainty is among people in the age 25-34 years, of which 41% would be able to go without income for only one
month. In the age group 35-49 years this indicator is 37%, and among people older than 50 years – 26%. Experts recommend that a financial cushion that would allow the costs to be covered at least for three months. “A financial reserve is essential to be prepared for unforeseen expenses, whether it’s medical expenses, home repair or loss of job. The Safety Cushion helps
to keep the habitual way of life even for a short time in a difficult situation, ” Pickel explained. Survey showed that savings covering expenses for three months and more, today only 30% of the working people in Estonia. In 2022 year this indicator was 48%. The decrease is especially notable in the group 35-49 years, where
only 24% have savings more than three months.The rate is 29%, and among people older 50 years – 37%. The Strong increase in the cost of life in the last years has significantly reduced the volume of savings of the people in Estonia. While
this many myths about savings and investments remain. “Regular and automated contributions to the suitable savings instrument is one of the most effective and reasonable ways to strengthen financial stability,” – Pickel stated. He also dispelled the myth that investing is only worthwhile with some capital. “On the contrary, it is better to start with small amounts to gain experience. The foundation of long-term success in investing is the habit of saving. Permanence is
the key to financial stability, ” he emphasized. Pikkel said Pikkel, in Estonia a wide choice of convenient and reliable solutions for savings, among which everyone will find the suitable option. Pickel recommends that the accumulation process is a long-term path that should be moved in small steps. A good idea is to plan monthly savings and set up automatic payments
for a suitable amount. For example, with the average gross wage in Estonia of 2000 euros and the objective to create a financial cushion of 5000 euros in two years,
needto put asidea little over200euroseurospermonth.”An evenmorewisesolutionistousesavingsaccountsofferedbydifferentservices,wheresavingsaccrueinterest.”It’s asmall,butusefulbonus,whichwillhelptogettothegoal faster,”Pikkel said.