Published: December 05 2023
The holiday season in Budapest has become increasingly challenging for consumers who are struggling to save money. Many people feel that their current income is not enough to cover their daily expenses, including the additional costs of the holiday season.
Financial Struggles of Hungarian Consumers
According to the latest European Consumer Payment Report (ECPR) by Intrum, a significant portion of Hungarian consumers views their financial future as uncertain. They are cutting back on everyday expenses, including meals, and even trying to save on holiday expenses. The survey also reveals that a large number of European consumers live paycheck to paycheck and lack sufficient savings to cover unexpected expenses. In Hungary, the situation is even more severe, with 31% of the population having no emergency savings.
Decrease in Disposable Income
The ECPR study highlights that 49% of European consumers have less disposable income compared to the previous year, after paying their basic bills. Hungarian consumers are affected by this trend, with 75% of them reporting decreased spending money after covering essential expenses. This decrease in disposable income may be attributed to the fact that many Hungarian consumers have experienced late payments or have struggled with debt.
Importance of Prioritizing Bill Payments
The study conducted by Intrum suggests that consumers are reconsidering their priorities when it comes to paying bills. This can be concerning for businesses, as consumers may choose to delay or even disregard payments to companies they are less fond of or those with less stringent payment terms. Offering flexible and mandatory payment options during periods of economic slowdown can be highly advantageous for businesses. However, it is important for consumers to understand that once they purchase a product or service, they are obligated to pay for it.
Buy Now Pay Later and Financial Responsibility
In Hungary and the broader region, there is a growing trend towards "Buy Now Pay Later" (BNPL) financing solutions. These options allow consumers to receive a product before making the payment. However, it is crucial that consumers use this opportunity responsibly. The survey shows that 34% of consumers find it difficult to keep track of their BNPL purchases. Service providers should strive to assist their customers in understanding the process and deadlines for delayed payment.
The financial challenges faced by Hungarian consumers during the holiday season highlight the need for budgeting and responsible spending. It is essential for individuals to prioritize bill payments and consider their financial situation realistically. With the increasing popularity of BNPL options, consumers should be aware of their financial knowledge and seek ways to improve their financial management skills.
Questions & Answers
What is the current financial situation of consumers in Hungary? Many Hungarian consumers are in a difficult situation, as their current income is not sufficient to cover their daily expenses. They are also trying to save on their everyday expenses, including meals and even their holiday expenditures.
What is the Intrum European Consumer Payment Report (ECPR)? The Intrum European Consumer Payment Report (ECPR) is a survey conducted by Intrum, a financial services company. It has been running for more than 10 years and aims to assess the financial situation of households in Europe.
What is the impact of the current economic situation on the financial situation of households in Hungary? The current economic situation continues to have a severe impact on the financial situation of households in Hungary. The majority of consumers are living from paycheck to paycheck and have a pessimistic outlook on their financial future.
How many Hungarian consumers have no savings? According to the survey, 31% of the population in Hungary has no savings at all. This is a higher percentage compared to the European average, where 20% of consumers have no savings.
How many Hungarian consumers can rely on only one month's salary for unexpected expenses? Approximately 16% of Hungarian consumers can rely on only one month's salary to cover unexpected expenses.
What is the average budget for holidays in Hungary? On average, Hungarian consumers plan to spend 118,000 forints on holiday expenses. Despite financial difficulties, they are reluctant to give up on holiday traditions such as baking and cooking.
Do Hungarian consumers overspend? Yes, according to the survey, 21% of Hungarian consumers overspend, using 26.1% of their monthly income in one month.
Why do consumers have less disposable income in Hungary? Many Hungarian consumers have less disposable income due to the higher cost of living and the inability of their income to keep up with inflation.
Why do some Hungarian consumers delay or miss bill payments? The main reasons cited for delayed or missed bill payments are lack of funds and forgetfulness. Younger consumers are more likely to forget to pay their bills. Additionally, there is a growing trend of debt among the younger generations in Hungary.
What can businesses do to address the financial struggles of consumers? Businesses can gain a significant advantage by offering flexible and mandatory payment options to their customers during times of economic slowdown. This can help prioritize bill payments and minimize financial stress for consumers.
What is "Buy Now Pay Later" (BNPL)? "Buy Now Pay Later" is a financing solution that allows consumers to purchase a desired product and pay for it at a later date. It is becoming increasingly popular in the region and in Hungary.
How can consumers use BNPL responsibly? Consumers should use BNPL options consciously and be aware of their purchase commitments and payment deadlines. It is important for service providers to assist customers in understanding the process and terms of delayed payment options.
What is the importance of financial literacy in managing personal finances? The survey highlights that consumers with higher financial literacy can better manage their finances, including everyday financial management, planning, investments, and debt management.