Since the outbreak of the war, Ukrainians have faced significant upheaval in nearly every aspect of life, especially concerning the economy and personal finances. As the country continues to navigate these uncertain times, questions surrounding employment, savings, and the future of financial management are at the forefront of the public’s mind. This article delves into how Ukrainians adapted financially through critical insights into the job market, household savings, and the rise of cryptocurrency.
In the early days of the conflict, the Ukrainian job market was severely disrupted. As one Ukrainian recounts, "At first it was very difficult. The prices rose, and there was no work. Many people lost their jobs, especially in the east." The initial shock led to widespread unemployment as millions of Ukrainians moved West or sought refuge in other countries. This had a tremendous impact on the economy, halting business operations and creating rapid inflation.
However, after the first two to three weeks, the war effort stabilized the economy, restoring aggregate demand. "After 2-3 weeks, everything returned to normal," another source shares. Many businesses in safer regions, particularly in the West, found ways to adapt and resume operations. Although the East continues to face significant challenges, many areas of Ukraine have seen a return to a semblance of normalcy in employment. This trend continues as President Zelensky decreases the draft age.
Many Ukrainians find work again as businesses reopen and adapt to the wartime economy. The job market has adjusted as more people seek work in safer parts of the country or shift to roles that can be performed remotely, ensuring some continuity in income despite the turmoil.
With the Ukrainian Exchange, the country’s equivalent of the New York Stock Exchange (NYSE), suspended due to the war, households have had to rethink what to do with their savings. For those in the East, the story has been one of survival. "People from the east either lost or spent all their money when they moved to safe places," said one individual familiar with the situation. Displaced households often found themselves using their savings to cover the costs of relocating and basic living expenses in safer regions of the country.
For most Ukrainians, especially those further away from the front lines, saving has become the default mode. "In general, everyone just saves money," another person notes. With uncertainty lingering, many households are holding onto whatever financial resources they have, keeping their money safe and liquid to ensure they can manage any unforeseen expenses that arise.
Given the volatility in Ukraine's economy, this widespread tendency to save reflects both caution and a lack of attractive investment options. Traditional investments like stocks are unavailable, and bank savings offer little confidence, so most people opt to keep their funds close to home.
Despite the instability, Ukraine's main banks have remained functional, offering a vital lifeline of financial services during the crisis. "The main banks have always worked without problems," one source reassures. Unlike in some other crises around the world, Ukraine has not seen widespread bank runs, a testament to the strength and resilience of its financial institutions in the face of war.
That said, trust in banks remains tentative. "I think people do not save money in the bank, but simply somewhere in the house in the form of a monetary unit," another Ukrainian shares. For many, the safest option feels like keeping cash on hand rather than entrusting it to the banks, even though they continue operating smoothly. This preference for physical cash reflects a more profound uncertainty and the need for liquidity in an unpredictable environment.
One notable trend, however, has emerged among younger Ukrainians—cryptocurrency. As traditional financial systems falter under the pressure of war, many young people turn to digital currencies as both an investment and a hedge against economic instability. "Many young people are interested in cryptocurrency and invest in it," one person notes, highlighting Ukraine’s position as one of the top five countries in the world by percentage of cryptocurrency ownership.
Cryptocurrency offers an alternative to conventional banking and investment systems, and its decentralized nature appeals to those looking to protect their assets from external forces. However, this new wave of digital investment hasn’t yet reached the older generation. "You can’t prove anything to the older generation," the source adds, indicating that while young Ukrainians embrace crypto as a future-proof investment, older Ukrainians remain skeptical of this digital frontier.
Ukrainians have shown remarkable resilience in managing their finances amid the war. While unemployment and displacement continue to pose challenges, many have found ways to stabilize their income and secure their savings. With traditional investment avenues like the stock market closed, households save cautiously, often keeping cash at home. Meanwhile, the younger generation is exploring new financial opportunities through cryptocurrency, marking a shift in how money is perceived and managed in Ukraine during these uncertain times.
As the war continues, the future of Ukraine’s economy remains uncertain. Still, its people's adaptability and ingenuity suggest that they will continue to find ways to preserve their financial well-being in the face of adversity.
*Quotes are taken from interviews with Ukrainian students
Written By: Jonathan Plavnik
Image Credit: Michael Wuensch
