Thursday June 01, 2023

Only 17% people in Finland carefully plan and observe a budget

Published : 18 Mar 2023, 03:17

Updated : 18 Mar 2023, 03:22

  DF Report
DF File Photo.

As many as 17 per cent of the people in Finland say that they carefully plan and observe a budget but over half have no plan for handling their everyday finances, according to a survey conducted by Financial Groups OP Pohjola (OP).

According to a study, Finns are not very methodical when it comes to finances.

About 46 per cent of the people in Finland say that they draw up a budget for their everyday finances, but only 17 per cent monitor how well they observe it. 29 per cent draw up a budget but never monitor it.

“Sudden but non-recurring expenses often complicate the financial situations of ordinary citizens. In recent years, we have seen that sudden expenses can also become recurring. The rise in price levels and interest rates strains the economy, and in this situation, planning would help to ensure that you can afford to keep doing the same things as before. At the bank we can see that a large percentage of the people in Finland still live in the world of zero interest because their interest rates have not yet been raised to the current level. This makes the present moment a good time to make a budget,” said Harri Nummela, Head of OP Financial Group’s Retail Banking.

Women plan significantly more actively than men, as a fifth of the women who responded to the survey say that they draw up and observe budgets. Only 11 per cent of men do the same.

People 18–24-year-olds are the most enthusiastic to plan budgets but the laziest to observe them. Retirees are the most attentive budget planners and observers.

“Based on our study, scarcity is a driver of strict budget-observance, as those with low income are more likely to carefully observe a budget. This is understandable, but when the economic situation is what it currently is, even those with higher income would benefit from considering their income and expenses. This does not automatically mean cutting down on expenses, but understanding your financial situation better in case your income goes down or your expenses increase.”

The roles of men and women get reversed when we look at how well people in Finland estimate they understand the phenomena that currently have a large impact on the economy.

A fifth of people in Finland estimate that they have very good understanding of inflation, or the increase in prices. The proportion is 27 per cent for men and 14 per cent for women.

The difference grows even larger when it comes to understanding the formation of the home loan interest rate, as 37 per cent of men estimate that their understanding is very good while the same is true for just under a fifth of women.

Held in January 2023, the OP Financial Group survey was answered by a nationally representative online panel of 18–79-year-old Finns (n=2,628).

The survey was conducted for OP Financial Group by Taloustutkimus. The margin of error is plus or minus 2.0 percentage points.