RIGA - Research conducted by GFK Custom Research and commanded by GE Money Bank reveal that 44 percent of Latvians are unable 'to give up spending in favor of their financial stability,' a press release on the bank's Web site reads. This inability to save is attributed to an inability to give something up 's 22 percent of respondents mentioned a lack of self-discipline in this regard and 17 percent admitted a lack of self-determination.
Moreover, residents of Latgale, the eastern region of Latvia, are supposedly least determined, whereas respondents in the western region 's Kurzeme 's agreed least to the statement of lacking the ability to give up something in order to save.
The press release includes commentary from psychologists and money planning experts at the bank, attributing the widespread scarcity of public saving practices to unidentified personal priorities and life goals. Money Planning Center expert Ilze Dreifelde-Gabruseva says people need to take responsibility for their own lives, discipline their spending and minimize impulse purchases. Dreifelde-Gabruseva states that "if there is a goal in one's life, it becomes clear what to give up and what to create savings for."
Loosely interpreted, this research could signal that almost half of the population lacks determination and a goal in life 's a rather bold announcement that sounds slightly exacerbated even in the current economic climate. Without engaging in a profound analysis of the representativeness of the data at hand, it must be noted that "Within the research of the more than 400 respondents that were surveyed, the obtained data is representative of the Latvian society with a net income of over 400 lats (565 euros) a month." Thus, only a fraction of the populace was considered, and it is unclear why.
Several observations arise from this position. First, those with a lower net income are not considered to have the possibility to save, hence were not included in the survey. GE Money Bank also informs that previous research in March showed that 42 percent of the population have 140-565 euros left over every month after paying the bills (including food and transport) for other expenses. The margin of those who have more than 565 euros left over is arguably considerably smaller, indicating that the majority of residents have less than 140 euros left to spend each month after paying their bills.
While the research at hand is interesting in uncovering savings dynamics and characteristics in Latvian society above a certain level of net income, it fails to address why the majority of the population is unable to make any considerable savings in the first place. Attributing this to a lack of personal determination and an inability to take responsibility for one's life is rather arbitrary. Thousands of people have taken hefty loans in the last years, with the prescience that their salaries would remain adequate for their repayment. Today it is clear that many such loans have become near impossible to repay, and the biggest issue for bank clients is not a question of what to do with all that leftover cash at the end of the month, but rather trying to stick to a somewhat grueling loan repayment schedule and rising interest rates.
Secondly, a poll that suggests people in Latgale have less determination (as wooly as the term might be), is no coincidence for a region that sports the highest unemployment rates in the country. However, attributing their meager savings practices to a largely personal incapability to stay away from impulse purchases and 'shopping' leave much to be desired for the scientific integrity of the study.
Echoing last week's article about the significance of individual achievement in Latvian society, parallels must be drawn with this study as well. It is certainly possible to advise people with notable extra monthly income to go easy on bric-a-brac purchases at a time of financial uncertainty, but such recommendations ring slightly absurd with regard to those that do not save for reasons other than excessive spending.
All in all, GE Money Bank's intention of investigating saving practices remains somewhat unclear. First of all, by only addressing part of the population, instead of looking at why less than half of Latvians have notable 'leftover' income each month in the first place, they are missing the mark by a reasonable distance.
Furthermore, it is rather mystifying why such attention and resources should be devoted to probing the 'culture of saving' at a time when the culture of 'making ends meet' is ever more present. In this light, data obtained under the current economic circumstances seems slightly outdated and more like a faint imprint of saving practices from a couple years ago, an amusing, weak backdrop to justifying the situation we find ourselves in today.
It is remarkable that albeit various socioeconomic data are necessary and valuable for understanding society in different economic eras, banks like GE Money Bank find it more beneficial to probe the reasons for weak savings accounts rather than what is done on the same, infinitely celebrated individual level to keep loan payments on time. This would be a whole other research, and if one had to put money on it, one just may uncover a quite economically disciplined population with set life goals and determination to go with it.
