(B) The Households and The Crisis (blitz interview - Dnevnik daily)

How will the financial crisis affect the household budgets?

Having downward sticky wages, the employers have practically two tools to cut the payroll with: the laying off and the reduction of perks. The lack of bank financing together with the inflation will definitely increase the expenses percentage in the households’ budgets.

Do you expect lower demand of consumer goods? If yes, which ones?

I sure do. Most of the essentials and the basic commodities will probably be unaffected. The same applies for the luxury goods. All the rest of the goods demand will be strongly affected. I do expect a price-seeking refocus of most of the consumers.

Would you recommend how our readers should manage their own budget and optimize their expenses with the constantly rising costs (interests, utilities, leisure)?

The answer to this question depends quite much on the personal needs and budgets of the households. However, there are certain simple rules such as: eliminating the credit card loans, optimization of transportation costs, energy efficiency, placing limits on telecommunication accounts, partial or complete loan repayment if any excess savings are available.

Should the people refrain from the relatively high expenses on some goods or trips abroad?

I believe that the irrational purchases and exuberant trips will be first victims of the crisis.

Would you advise the people to work more and harder in order to get a pay-increase?

I am a strong supporter of the added value in the economy. This added value comes also from higher qualification, not just more work. The human factor should be developed and this is the chief prerequisite for the success of the individual and the economy as a whole.

Where those holding some savings should invest ?

The investment process should never be spontaneous, sporadic or driven by exogenous factors. The investing is a constant, well designed and controlled by the individual process.