Majority of Bulgarians Report Decreased Savings Amid Inflation Surge

A sociological survey conducted by the Trend agency and commissioned by the Expert Club for Economics and Politics (EKIP) reveals that 73% of Bulgarians feel their savings have diminished due to high inflation since mid-2021.

Max Baklayan, an investment expert at EKIP, explained on BNR that the proper approach to finances is to prioritize saving for future needs before spending on immediate desires. Unfortunately, many Bulgarians only save after fulfilling all current expenses and wants. He noted that people often save "for rainy days" or in preparation for larger short-term purchases.

Baklayan suggested thinking of saving as a "tax you pay to your future self." It doesn't require a drastic portion of one's income, but rather instills a mindset of spending less than one earns. He indicated that saving is a behavior developed over time, with many individuals beginning to save between the ages of 40 and 70, after which they often shift their focus to immediate needs.

Stoyan Panchev, an economist from EKIP, pointed out that saving in a bank has become increasingly ineffective in combating inflation due to negative real interest rates. "Even if you leave your money in a bank, it still reduces the value of your savings," he remarked on BNR. Panchev also highlighted a significant inequality in savings opportunities within Bulgaria, as noted in an EC report.

Baklayan emphasized that waiting until one is in a tight financial situation to start saving is misguided. He stated, "There is a great hunger for labor in Bulgaria, especially for skilled workers, and the potential for income growth is quite substantial." He suggested that the easiest luxuries to forgo include branded items, expensive electronics, and...