The majority of people in Lithuania plan both their income and their expenditures, and most also know their family’s most important monthly expenses. But only just over one in five people make plans for their own and their family’s finances, and most of those plans are for a shorter length of time than is recommended. Such are the findings of a survey of the country’s residents conducted by Spinter Tyrimai in February this year on behalf of INVL Asset Management, one of Lithuania’s leading asset management companies.
Most people plan their everyday income and expenses
The vast majority of the Lithuanian residents who were surveyed plan their everyday finances – their expenditures and income. Nine of every 10 respondents said they plan their spending: 63% plan all expenditures and 28% plan bigger ones. Meanwhile, three-quarters (76%) of respondents said they plan their income.
The people who most often plan their income are those age 26-55 and respondents in the groups with the highest education and the biggest incomes. The majority of top and senior managers do so (more than 92%), with homemakers and small business owners rounding out the top 3 professions that most frequently plan their income.
Among those who more often plan their expenditures, meanwhile, are people with the highest income levels, and urban residents as well. Expenses are most frequently planned by top and senior managers (85% plan all expenses and 15% the biggest ones) and homemakers (62% plan all expenses, 33% the biggest ones). The groups that least plan expenses are students and pupils (just 21% do), unemployed persons (18.4%) and farmers (17.6%).
During the survey, most (81%) of respondents indicated that they know how much they spend per month on their own and their family’s most important needs. Women and people with higher incomes more often responded positively. Those who do not know what main needs their money is spent on tended more to be younger and less educated respondents, with the largest number among students and pupils and unemployed persons.
“Long-term financial planning starts with the evaluation of everyday income and expenses. That’s the first step to making a financial plan and successfully implementing it. It’s only when we know our financial situation, our main monthly obligations and expected income, that we can formulate financial objectives for ourselves and plan how to achieve them over several years. The survey showed that most people in Lithuania do plan their everyday income and expenses, so all that’s needed is to start more actively planning finances for the longer term,” says Dr Dalia Kolmatsui, Head of Pension Funds & Retail at INVL Asset Management.
More people are making financial plans, but for shorter periods
Compared to last year, the share of people who draw up financial plans for themselves and their families increased noticeably this year – from 15% to 23%. Still, financial plans are more often made for a rather short time frame – for up to 2 years (30%) or up to 5 years (28%). That compares to 15% of respondents with a plan for a period of up to 10 years, and 17% for more than 10 years. The number of people who plan their finances for shorter periods increased somewhat this year compared to the last year.
“To avoid surprises in one’s personal or family budget, finances have to be planned for as long a period as possible, at least a decade or more. That’s the type of long-term planning that’s recommended for everyone, independently of their age, income or education,” Dr Kolmatsui stresses.
Spinter Tyrimai conducted the representative survey of Lithuanian residents’ investment and saving habits, on behalf of INVL Asset Management, in February this year. For the survey, 1006 people aged 18-75 were interviewed.
INVL Asset Management, which is part of the Invalda INVL group, manages 2nd and 3rd pillar pension funds and mutual funds as well as alternative investments and individual portfolios. Over 190 000 clients in Lithuania and Latvia and international investors have entrusted the Invalda INVL group’s companies with the management of more than 650 million euros of assets.
Note: When referencing these survey results, please identify the source.
INVL and Šiaulių bankas merged their retail services as of 1 December 2023.
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INVL and Šiaulių bankas merged their retail services as of 1 December 2023.