Most young people in Estonia have a monthly budget

The survey conducted by SEB revealed that most young people in Estonia plan their monthly expenditures, although the figure remains slightly lower than in the other Baltic States. Many young people are also engaged in short-term saving, although interest towards ensuring their long-term future is low.

According to the survey, 18-25 year olds in Latvia and Lithuania are slightly better at finanical planning than young people in Estonia. In Estonia, 82 per cent of young people are planning their monthly expenditures, while the figure is 86 per cent for our neighbours to the south.

“Also positive is that in addition to planning their expenditures, saving is also important for them, even though both of these topics are characterised by innovation and convenience in this segment. For example, the popularity of the Digital Coin Jar has increased from year to year among 18-25-year-olds. The solution, which makes it possible to save cents from card payments, helps young people save an average of EUR 105 annually”, said Eerika Vaikmäe-Koit, Head of the Retail Banking and Technology Area of SEB.

76 per cent of Estonian youth are saving money for a specific goal, out of which the most popular are a bigger purchase, travelling or a home loan downpayment. A total of 61 per cent of youth aged 18-21 are planning to spend at least a year abroad in the future. 24 per cent are planning to study while abroad, 12 per cent to work, and 64 per cent would leave Estonia for an extended period of time to perform, for example, volunteer work. At the same time, every one out of two youth aged 22-25 are planning to move to a home they have purchased within five years, at the latest.

While there are many people engaged in short-term savings, there are fewer young people interested in ensuring their long-term future. Pursuant to law, young people are required to conclude a second pension pillar agreement, to which they will begin making contributions once they commence working. However, according to the survey, close to 30 per cent of young people in Estonia are unaware of which of the second pillar’s pension funds their money is being deposited into.

“The sooner one starts to save, even if the amounts are small, the larger the total sum will be in the future, for example, at retirement. However, if one starts saving too late, it will not be possible to accumulate a larger sum, as the accumulation and investment period will be too short and the money set aside will fail to generate enough growth. This is why it is great to see that young people in Estonia are taking an interest in investing – eight per cent already have made investments of one type or another, and 32 per cent would like to purchase shares or trade on the stock markets. Here, we are clearly ahead of the other Baltic States, as in Latvia a total of 23 per cent are interested in investing and, in Lithuania, 25 per cent”, added Vaikmäe-Koit.

*The data used in the text is based on SEB’s survey conducted in all three Baltic States in 2015, with a total of 2002 participants.