'Swedbank conducted a study comparing the average household income and the three main fixed expenses – food, utilities and public transport – in the capitals of the Baltic states, to determine which capital leaves families with the most money after these costs. The study was based on a family living in an unrenovated apartment building with 70 square meters of space in the capital city, where there are two underage children and both parents earn the average salary for that city.

Since 2021, the average net salary has significantly increased in all three capitals. The net salary of the household used for the study has grown the most in Vilnius, by an impressive 42 percent. During the same period, the net salary rose by 29 percent in Riga and 24 percent in Tallinn.

The monthly income of families is also influenced by child benefits. Among the Baltic states, Lithuania offers the highest child benefit, with a monthly sum of €192.5 for two children. Estonia follows with €160, and Latvia with €100.

"When calculating the total net income of the household used for the study and the child benefits received by each country, the family's income totals are €3,576 in Tallinn, €3,126.5 in Vilnius, and €2,655 in Riga," said Mari-Liis Jääger, head of Swedbank's Institute for Finances.

Food the most expensive in Tallinn

To compare which Baltic capital has the best balance between income and expenses, Swedbank assessed the cost of living in three categories: food, utilities and public transport.

The results of the study showed that the most expensive food basket is in Tallinn, where a four-member household spends €737 per month on food, which accounts for 21 percent of the family's income. According to the Statistics Office, food prices in Estonia have risen by 43 percent over the past three years.

In Riga, the necessary groceries for a family cost €640 per month, representing 24 percent of the family's income, and in Vilnius, it costs €544 euros, which accounts for 17 percent of the family's income.

In the 2021 study, the comparable food basket was also the most expensive in Tallinn, costing €536 and constituting 18 percent of the income. The cheapest food basket was in Vilnius, where a four-member family spent €442 per month, followed by Riga with a cost of €483.

"The steep rise in food prices over the last three years has been felt by absolutely all residents of the Baltic states. Since it represents one of the largest expenses for families, its impact on the budget is significant. Additionally, food selection is not always optimized, often resulting in a much higher amount spent on food. As can be seen, the increase in food prices has had the greatest impact on the wallets of Tallinn's families, and thus Tallinn's highest income does not necessarily provide the most affordable living conditions," said Jääger.

37 percent of income spent on fixed costs in Riga

Families living in Riga must contend with the highest utility costs (excluding rent or loans) – €288 per month.

In Tallinn, these expenses reach €260, and in Vilnius, they are at €209 per month.

Compared to 2021, the costs for residents of Riga have increased by more than half, or €108, while in Tallinn, expenses have risen by €87 over three years, and in Vilnius by €85. Heating costs have seen the highest increase across all cities.

Assuming that families use only public transport for movement in the capital, a family living in Riga spends €60 per month on it, and in Vilnius, €64, whereas Tallinners still benefit from free public transport.

However, the study's findings reveal that families living in Tallinn experience the most expensive daily life. The three main fixed costs – food, utilities and public transport – total €997 per month for Tallinn families, followed by Riga with €988.

Life is cheapest in Vilnius, where families spend €817 per month on food, utilities, and public transport.

Thus, after covering their main fixed costs, Estonian families retain 72 percent of their income, families in Riga keep 63 percent, and those in Vilnius have 74 percent of their income remaining.

"This year, Tallinn over took Riga as the most expensive capital, but at the same time, families in Riga are left with the least amount of money after paying for food, utilities and transport costs," said Jääger.

Swedbank based its calculation of the market basket on the lowest prices of the same or similar goods from the three most used online grocery stores. The data collection for the analysis occurred in all Baltic capitals from March to April 2024. The income data is from 2023.

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