Nooa Savings Bank has conducted a recent study that sheds light on the financial difficulties faced by every other Finnish citizen. The research highlights the impact of rising prices, with 24% of respondents experiencing significant or moderate economic challenges. Particularly concerning is the worsening financial situation among women and young people compared to two years ago.
Nooa Savings Bank conducted this study to understand the views and practices of employed Finns regarding their personal finances, economic conditions, and management strategies. The findings demonstrate a decline in satisfaction with personal finances and an increase in financial stress among 63% of working-age Finns.
Women and the youth experience the most negative emotions regarding their finances:
The study reveals a significant decline in the perception of personal financial well-being among women, young adults (18-34 years old), and highly educated individuals. However, even across other age groups, education levels, income brackets, and professional categories, except for entrepreneurs, people's perception of their financial situation has deteriorated. In 2021, half of the Finnish population viewed their personal finances as excellent or good, but this year, the corresponding figure stands at only 40%. Women's perception of their financial situation has declined by 15 percentage points, while young adults aged 18-34 experienced a staggering 22-point decrease. Highly educated individuals reported a 17-point decrease in their perception of their financial situation.
Terhi Mali, Head of Financial Well-being Services at Nooa Savings Bank, suggests that these numbers reflect the limited ability to prepare for unexpected events. Women and young people may feel they lacked the opportunity to save, while highly educated individuals may have relied on future income prospects or taken on larger expenses due to extended periods of study and high student loan burdens.
Diverging capacity to prepare for price increases divides the employed population:
The study brings forward a positive note, with 47% of respondents feeling that they have been able to prepare fairly well for potential price increases in the future. However, an equal percentage of individuals (48%) believe they have been poorly or not at all prepared. The differences are significant when considering education levels, occupational groups, and, notably, income levels.
Simultaneously, 57% of respondents claim to have reduced their spending, 32% have learned to manage their finances better, and 25% have increased their savings. Fourteen percent are actively seeking higher-paying jobs, while an equal percentage are taking on additional part-time work alongside their primary employment. Thirteen percent report having moved or are searching for more affordable housing to lower their expenses.
Terhi Mali notes that people are now willing to make significant life changes to gain control over their finances, with 80% of respondents having taken measures in the past six months. Surprisingly, these changes often involve major aspects such as home and work.
Tommi Grönlund, CEO of Nooa Savings Bank, explains that the study results come as no surprise given the rapid increase in interest rates and prices, which naturally have had significant implications for the personal finances of Finns. More than half of the households have been forced to reconsider their expenses, resulting in reduced spending.
Financial matters hinder work performance, yet Finns seek limited financial counseling:
A quarter of working-age Finns report that personal financial matters have greatly or significantly impaired their work performance. This represents a notable increase since the 2021 study.
Tommi Grönlund points out that the decline in work performance primarily manifests in mental well-being and overall work stamina. If this negative trend continues, it could have significant societal impacts.
According to the study, only 4% of men and a mere 1% of women have sought assistance with their financial matters. Additionally, 27% of respondents feel reluctant to seek any form of help regarding their finances.
Terhi Mali highlights the observation that people often seek assistance too late when they are already facing financial problems. Discussing money matters is often regarded as taboo. She suggests that everyone should plan their finances and seek advice on financial management, especially during life changes such as young individuals moving into their own homes, separation or divorce, or combining households.
Nooa Savings Bank's latest study emphasizes the growing concerns about financial challenges among Finns. Rising prices have had a significant impact on the economic well-being of individuals, particularly women, young adults, and highly educated individuals. While some have managed to prepare for potential price increases, many have reduced their spending and actively sought ways to manage their finances better. The decline in work performance due to financial stress is an alarming trend. Nooa Savings Bank encourages individuals to seek financial guidance and plan their finances to avoid reaching a point of financial hardship. By addressing these issues proactively, Finns can navigate their economic challenges more effectively and build a stronger financial future.