Money

Like many people, I have a minor fascination with money and its multi-faceted nature. Money can be used for good, for evil, and everything in between. An amount which seems like a fortune to one person may be pocket change for another, or even for the exact same person at a different point in his life. I feel very fortunate to have personally experienced, as much as any Canadian can, some very diverse levels of poverty and affluence. I’m always interested to find out how people live, what they choose to do with their money, and how they feel about it.

When my mom and I first visited Latvia in 1994 I struck up a friendship with Dace and Kaspars, which happily continues to this day. As far as my Latvian level allowed, we immediately began asking all about each other’s lives, and how things worked in the other’s country. Before long, I found myself opening my wallet and showing them my debit and credit cards. They were amazed that I could buy things with these cards, or just put the debit card into a bank machine and it would give me money. “… but only if I have money in my account!” I hastened to say. I also happened to have a blank check in my wallet, but the concept of using checks was harder to explain. To this day, Latvians have never used checks. Before the internet banking age, you would have to go and physically pay bills with cash. Then as soon as it was possible, Latvians started paying almost all bills through internet bank transfer, long before most Canadians did so. Of course, most people in Latvia also have debit and credit cards now too, as well as the debt that they often bring.

Levels of income and expenses in Dollar/Euro terms are very different between Canada and Latvia. Right now the Canadian dollar is equal to about 0.72 Euros, to give you some context for these figures. For the year 2015, average wages in Latvia were 818 Euro/month gross, which came out to 603 Euro/month net of taxes. That’s the average figure, so the median was almost certainly less than that. There is also a minimum monthly salary for full time work. For 2017 this minimum is 380 Euro/month. For my studies this year I have been taking private Bachelors-level classes with professors at a well-respected degree-granting Public Institution, and I pay 10-15 Euro/hour for those private classes. Yes, all these numbers are amazingly low, from a Canadian perspective.

Most expenses are also much lower than in Canada. The price to buy an apartment in Riga starts at around 20,000 Euros. Renting a two room (1 bedroom) apartment costs 250-400 Euro/month, including utilities, and you can even get a room with a kitchenette for only 150. Food is overall about 30% cheaper than in Canada, with basic local ingredients about 70% cheaper. You could probably make do on 80 Euro/month for food if you had to. Like Ontario, healthcare is covered by government as long as you pay taxes. There are long waits for government-covered services, far longer than in Ontario, so many people choose to pay cash so they can get quicker treatment. Riga’s excellent transit system is not cheap. It’s about 1 Euro per ride, and you need to pay again if you are changing buses or trams. For comparison, you can find cost of living information for Toronto here and here.

I have also found out about the competition to get into JVLMA. It’s actually not so much a competition for entry, but for the limited state-funded spots. Almost all JVLMA students are there tuition-free, and many receive living expense stipends as well. If you’re willing to pay for tuition, it’s apparently not that hard to get in. JVLMA seems to be a special case. At most other universities, only around 10% of the students are state-funded and attend for free. For everyone else the regular cost for full time studies is around 2500 Euro/year.

Latvia’s cultural life is also heavily supported by the state, including salaries for the directors of many choirs. The choirs have a “skate,” a review, once a year where they sing 3 songs for a panel of judges. On the basis of that review, the choir is funded by the state, which pays a salary to the director, and perhaps an accompanist or vocal coach if the choir needs or uses one. The review for Dzintars women’s choir, of which I’m currently a member, is in early April. Unfortunately I will miss it, as I will be out of the country.

Despite the numbers all being lower, you can probably imagine how financial life works for the average Latvian. If you clear 600, but your rent is only 250, then you’re basically okay. Yes, it does all work, except for one group: the pensioners, who really do live very close to the bone. Although many like to complain about it, Canada has an excellent pension and elder support system. No matter how much or how little they have worked or paid taxes, with a combination of CPP, OAS and GIS the absolute minimum that a Canadian resident age 65 or over will take home is about $1400 Canadian dollars per month. I have friends who laugh at me over this, but I think that this amount is quite generous. I myself have lived on far less for extended periods of time. Check out my favourite blog here if you can’t imagine how this could possibly work.

Latvia also has a minimum pension level. It’s 70 Euros/month. Yes, 70, I’m not missing a digit somewhere. Ouch!… In 2015 the average Latvian pension was 288 Euros/month. The average eligibility age to start receiving the pension is around 61, but that is set to rise to 65 in the coming years. It can’t really go much higher than that, since the average Latvian man only lives to age 70 (79 for women). Information can be found here and here. That $1400/month minimum that Canadians get looks pretty good now, doesn’t it?

Unfortunately, the low age expectancy also means that my friends don’t worry too much about saving for retirement. I pointed out that many Canadians aim to save 10% of their income for retirement, and they just laughed. They consider that completely impossible with their salaries. Yet, somehow, they do seem to be able to afford ski trips to Italy. Same old story about priorities, the world over!  However, with no “cushy” minimum like Canadian seniors get, retirement savings are actually far more important in Latvia. Seniors in Riga do get a bonus though, instituted by mayor Nīls Ušakovs: they ride public transit for free.

While it’s great that the state pays for a rich array of cultural programs and enables so many students to attend university for free (and then, all too often, leave the country shortly afterwards), I can’t help but think about the starving seniors who are, in a way, paying for it all. Every person and every country has their own priorities about how to use their money. However, when it comes to taking care of the less fortunate, this is one tough place.

One thought on “Money

  1. Good blog! Probably most people haven’t thought along those lines. Hope it leads to some introspection and appreciation.

    Like

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