Even small amounts—ten or fifteen euros a month, saved consciously and consistently—over time form a solid foundation and provide greater freedom.
“Everyone should master financial literacy, and it should be part of the education system,” quotes Bigbank the associate dean, lecturer, and leading researcher at the Faculty of Education Science and Psychology at the University of Latvia, Linda Mikhno. The expert emphasizes: financial literacy is one of the core competencies that should be developed from school and continued throughout life, forming an attitude that is reflected in actions.
According to the expert, there are 5 essential financial skills that are indispensable in the modern world!
The first is budgeting.
You can start simply by recording daily expenses in notes on your phone, an Excel spreadsheet, or a notebook, marking all expenditures, including seemingly trivial ones—costs for coffee, delivery of orders, or spontaneous purchases—and conducting a brief review at the end of the month. Many may find the classic principle of dividing expenses into parts—needs, wants, and savings—suitable. However, it is better to narrow down the categories even further: for example, housing expenses (monthly rent and bills), food expenses, transportation, health, spontaneous purchases, entertainment, and savings.
The second is setting financial goals.
Financial goals can be formulated based on a very simple principle—define a specific amount, timeframe, and clear outcome.
The third is the ability to save.
Financial security cannot be achieved without saving. It is often perceived as a privilege available only to those with high incomes, but in reality, regularity is what matters. Even small amounts—ten or fifteen euros a month, saved consciously and consistently—over time form a solid foundation and provide greater freedom.
The fourth is financial security and investments.
Financial security can be strengthened by several simple principles. First, remember: banks, government institutions, or courier companies will never ask for PIN codes, passwords, or access to online banking over the phone, SMS, or email. If in doubt, the conversation should be terminated, and the information should be verified on the official website or by calling the number provided there.
Secondly, it is highly recommended to use two-factor authentication, regularly change passwords, and use different passwords for each digital tool, including social media profiles. It is also advisable to adopt the principle of never making financial decisions in haste or under emotional influence, as this is often the basis for scammers' tactics. One must also be able to navigate the digital environment, as a significant part of today’s “financial life” takes place there. In 2024, 96 percent of the population in OECD member countries used digital payments. At the same time, low digital financial literacy increases the risks of fraud, and digital payments can contribute to overspending, as noted in an OECD report published in September 2025.
The fifth is understanding loans (credits).
An equally important part of financial literacy is understanding borrowing. The latest data from the Bank of Latvia shows that in September 2025, the share of overdue loans reached 2.6% of all loans, or €469.14 thousand. Compared to September 2024, there is a slight increase, as during the same period, the share of overdue loans was 2.5% of all loans (€414.44 thousand). In September 2023, it was 2.3% of all loans, or €368.17 thousand. This means that from 2023 to September 2025, the amount of overdue loans increased by 0.3 percentage points, or €100.97 thousand. The growth of debts is steady and shows that not all borrowers fully understand the limits of their financial capabilities or are able to manage them over time. By improving the financial literacy of the population, these indicators could possibly decrease.
