Going through life consciously, daring to do something new, acting mindfully: Well-being has become the buzzword of our time - in all areas of life. This also applies to money.
For 54% of the Romanian respondents, financial well-being means having control over their personal finances and always knowing their account is not empty. 35% associate saving with peace of mind and financial well-being. Being savvy is important for the customers' serenity. 27% of the respondents simply save for their future experiential holidays. 19% save for important goals like a new house or a new car, and only 6% use their saved funds to obtain the interest rate.
It's mostly the Millennial generation that associates financial well-being with the achievement of a carefree approach to money. For 56% of the participants between 35 and 44 years - the majority in this age segment - financial wellbeing is achieved when they feel comfortable with money and their own finances and have no financial worries. Less concerned about their financial carefree state of mind are the respondents aged between 25-34 y.o. (50%).
Holidays and education are two of the strongest reasons for saving among the GenZers (31% and, respectively, 14%). The grandparents (65+) save mainly for Christmas presents for their families (25%), while the X generation (45-54 y.o.) have the highest proportion of consumers not succeeding to save money (6%).
... instant gratification is more important than long term objectives?
Achieving a high standard of living is always important for Romanians, but almost half (55%) of the respondents had to use their piggy bank money to keep up with the spending of those around them. Only 45% of the respondents remained committed to their objectives and did not give up to the pressure of the family or friends to buy different goods.
Almost one out of three respondents had to spend on goods that they did not afford, and the same proportion declared that they did not follow the pressure of the group in satisfying different instant needs. 7% said that they needed to use their savings in order to adopt a standard of living similar to the ones promoted on social media. 12% replied that they do not have savings and thus the pressure of the group, friends, family or social media was lower. Women (24%) felt a higher pressure coming from friends, while men resisted temptation better than ladies (37% vs 29%).
The GenZers are by far the generation with the higher propensity to spending under social pressure (67% vs 55% average). The age segment 45-54 y.o. was the most affected by purchases of goods and services that they did not afford (35% vs 30% the average), while the seniors (55+ y.o.) responded at higher extent that they did not have savings (18% vs 12%).
64% of the respondents included in the study said that they would put off saving in favor of short time satisfactions. 24% think that due to the unpredictable times it is better to search for short-term happiness, while 29%, although are favorable to saving, end up by spending. 11% of the respondents are skeptical that they will succeed saving, thus preferring to spend for instant gratification.
Only one Romanian in 3 is committed to fulfilling big plans and long term objectives, with a higher commitment among 35+ y.o. consumers.
Financial choices: big projects or medium-short time satisfactions?
Most Romanians (44%) would give up on buying a new car if they must choose between this important acquisition or a guilty pleasure, with a higher proportion among the 35-44 y.o. segment (49%). 30% would stop saving for a new house (with the highest ratio of 35%, in the 55-64 y.o. segment), 27% to start their own business, 20% to their wedding (the highest ratio of 31% in the 18-24 y.o. segment).
Men would rather forget about buying a new car (46%) and a new house (33%), while ladies would prefer to postpone their own business (29%) and the wedding (21%).
Since July 2024, Romanian Revolut customers can make their money grow, in various currencies (GBP, EUR, USD), within Flexible Cash Funds. The local customers prefer to invest in Flexible Cash Funds in EUR (48% of the total balance held by Romanian customers in Flexible Cash Funds) and dollars (45% of the total balance), while GBP attracted 7% of the total invested amount. The average balance of a Flexible Cash Fund owned by a local customer, as of the end of October 2024, was €3,700, GBP 1,700, and $6,100.
Mariia Lukash, Head of Growth, CEE Region, commented: ”This study highlights that for the consumers it is more and more important to make their money go and use diverse ways of achieving their financial wellbeing goals. We're pleased to see that our Flexible Cash Funds became in such a short time the product that helps people get the most out of their money. Revolut Romanian customers have a flexible way to invest their savings with low risk in EUR, USD, and GBP, with the convenience of accessing their money whenever needed, and they do not need anymore to delay their plans, from the dream holiday to a bigger house for family”.
When adding money through Flexible Cash Funds, customers are investing in a money market fund of their choice — offering rates in line with money market rates meaning that, when central bank interest rates are high, the yield of the fund is similarly high (and vice versa). In such scenarios, money market funds typically offer higher interest rates than traditional savings accounts although capital and interests are not guaranteed, these money market funds have the lowest risk rating among this kind of investments (1 out of 7). Customer investments are insured by the Lithuanian Liabilities to Investors Insurance Scheme up to €22,000 (investment risks are excluded from the coverage).
With Flexible Cash Funds, customers will be able to invest into a money market fund and earn interest overnight pending on the performance of the fund. Customers can invest in three currencies – EUR, GBP and USD – and hold multiple portfolios at the same time. The interest rates vary depending on the fund's currency and the subscription plan of the customer.
