According to the state organization VEB.RF, analysts projected that Russian income could dip by 12 percent in 2022 due to sanctions. Olga Milova, who leads the financial literacy department for the Central Federal District under the Central Bank of Russia, outlined five strategies to reduce the negative impact and boost income for readers of socialbites.ca.
Method 1. Open a deposit or review existing rates
Bank deposits saw rapid rate increases after the Bank of Russia raised the key rate to 20 percent on February 28. Some savers seized the moment and secured time deposits at annual yields as high as 23 percent. While such offers rarely appear today, deposit rates remain attractive. If someone has cash idle, the current average rate on short term deposits at the largest banks is around 18 percent per year.
Additionally, in March, income tax on deposits for 2021 and 2022 was eliminated if the interest exceeded the legal threshold. This change helps savers receive larger payments while reducing tax burdens.
Method 2. Slow down loan plans
In March, loan costs climbed as quickly as deposit rates. Even though the key rate was trimmed to 14 percent in April, many banks have been cautious about lowering consumer loan prices. If there was a plan to buy equipment or goods on credit, it is wise to reassess. A Bank of Russia specialist cautioned against overstretching finances.
“Pause before borrowing. Assess how essential the purchases are and whether they can be avoided. The most important part is how to repay the borrowed funds. Consider not only regular income like salary or pension but also potential surprises such as layoffs or health issues. Prepping for loan payments under adverse circumstances is crucial,” Milova explained.
One can also estimate the total cost of a purchase, including loan payments for the expected period. Often it proves cheaper to save and buy later than to buy now at existing lending rates.
Method 3. Review available benefits
Many households can qualify for support, but they may not know where to look or how to apply. Accessing these benefits can ease family budgets.
For instance, in Moscow, families with many children can park in paid lots for free. Other regions may have their own local preferences. Information about needed benefits can be found in a personal account on the State Services portal or at a MFC. If a family has three or more children, or includes retirees, students, or someone with a disability, it is worthwhile to check the list of benefits and allowances. It is possible that utilities were being paid at a higher rate than necessary for years.
Method 4. Claim eligible tax deductions
Costs related to fitness, dental care, or history lessons can sometimes be refunded through tax deductions. With modern digital services, these deductions can be processed quickly via a personal account on the Federal Tax Service website.
Education lasting five years or more, medical care, benefits, sports, and life insurance, including voluntary early retirement, can qualify for a refund up to a yearly cap. For example, refunds can cover private health insurance and prescription medicines for yourself or family members, as well as sports and youth activities.
There are also deductions for investors on certain items such as property. Milova notes that deductions cover land purchases and construction costs, and additional deductions may apply for mortgage interest when buying a home with a loan.
Method 5. Choose a debit card thoughtfully
A debit card is more than a payment tool. It can contribute to savings and rewards. Review what fees your card incurs and whether any extra monthly charges apply for services you do not use. Look for loyalty programs and offers from the card network that supports your account.
Opening a new debit card that accrues interest on the balance can be a smart option. Cards may also offer cash access or loyalty points that can be exchanged for flights, hotel stays, store discounts, or other perks depending on partner programs. Taking time to compare cards and their terms helps keep the account healthy and profitable.