According to a study by the Swedbank Financial Institute, the main additional expenditures that have a negative impact on the personal budget of the population are expenses that could be dispensed with, according to 43% of the population, which is 8 percentage points more than in 2018. These spending, with a negative impact on personal budgets, is immediately followed by purchases during discounts or promotions (36%) and the enjoyment of home-cooked meals, including food delivery (18%). The majority or 92% of the population believe that they would be able to save by reviewing their monthly budget and limiting spending items, which frustratingly makes money wasted, while 43% admit that the savings can be estimated at over 50 euros per month.
Shopping opportunities are becoming wider and more accessible to a large part of society. Those who are friends with technology have long appreciated the benefits of remote services – a few clicks, and then just wait for the package to be delivered. Online shopping without getting off the couch became more relevant during the pandemic, when many merchants, both willingly and forcibly, began to think more intensively about offering their goods and services in the e-environment. On the one hand, this is a positive aspect, as it increases consumer choice, but on the other hand, it also opens up a number of risks, such as excessive and ill-considered purchases, which can have a strong impact on an individual’s financial situation.
According to the survey, the majority or 89% of Latvians shop online, and one in four admits that e-commerce has stimulated more frequent purchases of goods in the pandemic, without which it would otherwise be safe to do so. The largest share of such buyers is found among young people, as well as among residents with high or medium high income, residents of Riga and residents of other large Latvian cities. Only less than a third (29%) of buyers strongly state that they have bought only the most necessary in the e-environment.
“The e-commerce industry will flourish during the pandemic, given the fact that people have spent significantly more time at home, on devices, and also making various purchases. It is important to realize that for those who tend to buy goods, driven by impulsive reasons, a housekeeping complete with a rich offer on the Internet can cause significant personal financial difficulties. The easy availability of goods on the Internet, the opportunity to receive goods without leaving home, and a lot of free time, stalled by various extracurricular activities, undoubtedly contribute to useless shopping. Often what seems attractive, modern and unusual in the moment, if thought more carefully, would prove unnecessary and useless. Due to the above-mentioned circumstances, we often miss a moment of reflection, so financial discipline and careful planning of our finances are even more important than before. ” says Evija Kropa, an expert at Swedbank Financial Institute.
Consumers most often mentioned the purchase of clothing (31%) and food (31%) on the Internet as useless purchases. Relatively often cosmetics, beauty products (23%) and medicines, food supplements (23%), as well as household goods (18%) and household appliances (18%) – vacuum cleaners, waffle irons, air grills – are also bought without special needs. The list of least useful purchases includes computer equipment and mobile phones (5%).
Useless online shopping during a pandemic is mainly due to a psycho-emotional reason – the desire to please oneself, to improve mood (63%), which is most pronounced among thirties, but is also quite common among high-paid people and urban residents in general. Incentives for useless purchases include relatively easier access to goods on the Internet (37%), impulsive decisions (34%), the desire to reduce stress (28%) and sales activities and discounts for sellers (28%). Significantly, middle-income recipients (700-1000 euros) almost twice as often as the rest of society rank boredom and a lot of free time spent shopping as incentives for wasteful purchases.
“Asking to name the most useless online shopping made during the pandemic, people mention a variety of things – toothbrush holder, slimming patch, skin mask not suitable for skin type, ant poison, vitamins, a pair of fifteen pants, a thermos bottle, toys and various trivia from China. These answers further confirm the fact that it often happens to buy things that are not only not suitable for us, but are not really necessary in essence. It could also be a signal of not being able to give up shopping just after the process. In such cases, it is important to be aware of when it starts to become a problem and to take action – find another job that provides the necessary satisfaction, reduce incoming advertisements, keep track of spending and determine the optimal amount per month, and wait at least a few days before making any purchase. , ”Suggests Evija Kropa.
Swedbank Financial Institute
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