As Poslovni Dnevnik writes, challenges with getting used to the euro as this country’s new currency are partly due to a psychological phenomenon called the ”money illusion”, which isn’t uncommon when changing currencies.
This year, at the moment when the clock struck midnight on the night of December the 31st, 2022, to January the 1st, 2023, Croatia officially got a new national currency. The kuna, which has served us more or less successfully for the past thirty years, gave way to the euro, and since then we’ve all been receiving our salaries, bonuses and other monetary items expressed in euros. Although essentially not much has changed – in most cases Croatian employees continued to receive the same amounts in terms of value as before, just expressed in a different currency – there was some dissatisfaction.
The above was confirmed by a survey conducted by the MojPosao/MyJob portal, in which almost 900 respondents shared their thoughts, according to which as many as two-thirds of Croatian employees feel poorer since receiving their salaries expressed in euros.
The psychological phenomenon of money illusion
Challenges with getting used to the euro are partly due to a psychological phenomenon called the money illusion, which is not uncommon when countries change their official currencies. As psychologists explain, this illusion occurs because numbers are more important to people than the value of money itself, and this results in a sense of dissatisfaction when nominally smaller amounts start arriving in our bank accounts than before. This is exactly what happened with the switch to the euro.
Challenges with getting used to the euro are partly due to a psychological phenomenon called the money illusion, which is not uncommon when changing currencies.
Namely, almost two-thirds of Croatian employees (63% of them) state that they feel poorer since receiving their salary in euros instead of kuna. Now, they explain, they receive their salary in “hundreds of euros, while it used to be thousands of kuna, which has a negative effect on their satisfaction”. Additionally, as a result of inflation, the cost of living has increased, so the salary itself, apart from the nominal amount, has also fallen in real terms compared to before, say the interviewees.
“At first it seems smaller, but it’s the same”
On the other hand, a third of Croatian employees (32%) point out that they haven’t felt the effects of the money illusion for themselves and feel the same as before the currency change. They state that they were afraid that they would be made to feel that they had suddenly become poorer, but that in the end it was a peaceful transition.
Although in the minority, some people (5%) feel richer since January the 1st than before. According to their thinking, the euro is a stronger currency than the kuna, and thus money expressed in euros has a greater value.
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