The rapid rise in the cost of living, tax and price increases and slowing wage growth have left many Estonian families in a situation where monthly expenses exceed income. This is leading people to look for solutions that may not be sustainable, such as taking out (quick) loans, maxing out credit card limits or delaying bill payments. But is a quick cash grab the only option, or are there longer-term and more effective solutions that can both reduce debt and improve quality of life?
Living beyond your means – an invisible crisis
Although official statistics show an increase in average wages in Estonia, this picture only partly reflects reality. The majority of people earn significantly less than the average, especially outside the larger cities. At the same time, prices have risen faster than people’s incomes, putting pressure on families to spend more than their monthly budget allows. As a result, there is a growing trend to take out (quick) loans, credit cards, etc., which is confirmed by the rising debt obligations, according to debt advisors.
Debt advisors warn that such solutions are often temporary, exacerbating long-term financial difficulties. Add to this a reduction in real income in the coming year and the current “patching” can lead to a much more difficult situation, with loan repayments becoming almost impossible to meet.
Extra work – a solution to financial difficulties?
One way of coping in difficult times is to earn extra income. Opportunities offered through flexible work platforms such as GoWorkaBit have helped hundreds of people improve their financial situation. People on the debtors’ list have been able to pay off their debts and return to a more stable financial situation thanks to the extra work.
Flexible working or extra work allows you to choose a schedule that fits in with the rest of your life and earn extra income when you need it most. This is particularly useful for those with fluctuating financial commitments or who want to get out of quick loans.
Societal impact: more than a single issue
Financial difficulties do not only affect those who are in debt – they are also passed on to loved ones, affecting families and communities. When a person’s income falls or costs rise, the wellbeing of children, the emotional balance of families and the effectiveness of workers are often at risk. Debt counsellors and employers see this wider impact on a daily basis.
The burden on bailiffs is also increasing as more and more people are unable to meet their obligations. Platforms say that they are coming into contact with a large number of people who are in arrears or in arrears, which in turn is reducing their ability to take control of their lives.
What next?
- Budgeting: take time to review your spending and find ways to save on services and products that are not essential. Making small changes every day can help you avoid getting into big financial trouble.
- Avoid loans: try to find alternative income instead of (quick) loans and credit cards. Loans can provide temporary relief but rarely solve the problem permanently.
- Extra work opportunities: consider flexible extra work that allows you to earn extra money without affecting your main workload or daily life balance.
- Debt counsellors’ help: if you are already in financial difficulties, feel free to contact a debt counsellor. They can offer practical advice and help you find ways to manage your debts in the best possible way.
Rising costs of living are a reality that must be taken into account, but it is possible to find a balance between your income and your expenses. Long-term and well thought-out solutions, such as budgeting and extra work, have proven their effectiveness and can help avoid situations where quick loans become an endless vicious circle.
To improve the situation, it is important to understand that everyone has the opportunity to take steps towards a better financial future – and to do it today.