site.btaFinancial Literacy Initiative Director Vartonik: Planning Key as Households Prepare for Euro Switch

Households should start preparing next year’s family budget and try switching it to EUR before Bulgaria officially joins the euro area, Financial Literacy Initiative Foundation Director Rositsa Vartonik said in an interview with BTA on Saturday.

She recommended that September, October and November are the best months to draft an annual family financial plan and suggested trying budget planning both in BGN and in EUR.

Vartonik explained that for those used to budgeting in BGN, the transition to EUR will not change the value of their money, just the currency they use. She urged people who do not currently budget to adopt the habit, noting that prices are already displayed in both currencies and that keeping a family budget in parallel can ease the changeover.

She pointed out that it makes little difference whether families withdraw all their income in cash or manage it via accounts, but research shows people tend to be more aware of their spending when using cash. Still, Vartonik noted, digital payments are now an unavoidable part of life, so families should track their expenses carefully using suitable apps to stay on top of their finances.

When planning an annual family budget, Vartonik advised setting clear financial goals for one, five, or even 20 years, first allocating a share of yearly income: 10%, 20%, or 25% towards savings and big-ticket expenses, before distributing the remainder for regular costs such as bills and groceries.

Vartonik warned against running a deficit in the household budget, unlike with the national budget, stressing that consistent overspending leads to debt spirals. She recommended staying within means after putting aside savings, and being cautious when taking on new loans, noting general guidelines that total debt should not exceed 30-35% of monthly income, with a cap around 50%. Consumer loans, she said, should stay at 5-10% of income.

She acknowledged that younger and middle-aged families are likely to adapt easily to budgeting in EUR, as many already travel or use the currency. However, retirees and those used to managing finances in cash might face more difficulties and would benefit from support from younger relatives during the transition.