The Culture of Saving Money Around the World

If you’re pulling out more from the ol’ piggy bank than you’re putting in, you might appreciate some international insight into saving money.
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The Culture of Saving Money Around the World

Welcome to Resolution Week! All this week, we’re highlighting how countries around the world tackle Americans’ most popular New Year’s resolutions.

It’s a familiar feeling for many Americans: checking your bank account after a week of hard work only to wonder, “Where did my money go?” How many times have you told yourself that you really need to stop going out for that happy hour drink (or three), that you shouldn’t have taken an Uber when you could have taken the bus? All those miscellaneous expenses can really add up. Maybe this year’s the year, you tell yourself, when you finally get your spending under control and start saving money.

The numbers show that by and large, Americans aren’t so good at saving. A 2013 survey by the Federal Reserve claimed that 47 percent of Americans wouldn’t be able to cough up $400 in an emergency. And the country has more than once ranked 19th in global retirement security. American capitalistic culture doesn’t do much to encourage tucking away money for a rainy day.

But for a country that loves to spend, spend, spend, the United States is not without its thrifters. For many Americans, saving money can be an art form. Clipping coupons, packing lunch from home and taking public transit are among the countless ways spending-conscious Americans try to curb their spending. That’s why saving money is such a popular New Year’s resolution (even if it’s not always followed through on in the end). Around the world, thriftiness is more ingrained in everyday culture, and many other countries fare much better than the United States when it comes to saving money. Here’s a look at spending and saving culture around the world.

Strength in Numbers

A communal money-saving method that many Americans would consider novel is the tanda, which is popular in Latin American countries and the Caribbean. It’s known by different names around the world, but its basic underlying idea is the same: when people work in tandem to save, everyone benefits. The system works in turns; a group of people each pitches in an agreed-upon amount to a collective pool during each turn on a specific day, which can be a payday, the first of the month, or any other stipulated time. Then, during the first turn one member of the group receives the pooled money as a payout, and then the next member receives all the money during the next turn, and so on. More money isn’t created, but it gives each person a boost every once in a while.

The notion of communal financial planning is not foreign in Kenya, either, where the harambee (Swahili for “all pull together”) is a popular tradition of community improvement. It works through a group contribution to a common cause or goal like education and resourcing — all projects that benefit the community as a whole. It may not be “saving” in the purest sense of the word, but by crowdfunding money, people hold each other accountable and can see the tangible effects of their investments.

Thinking Bigger, Farther Ahead And Beyond Oneself

Indian culture — less individualistic than that of the United States and much more frugal — typically emphasizes sharing wealth and investing in the financial stability of one’s family. Parents often support their children financially even after they leave home, and the cost of weddings and dowries makes saving up all the more important.

In China, people are more wary of spending money on things they don’t absolutely need, and they’re also more focused on saving for a rainy day in case their government can’t take care of them. According to the Organization for Economic Cooperation and Development, China boasts one of the world’s highest household savings rates at 37 percent, partially because of a lack of public services and developed welfare programs . The saving culture also has a focus on taking care of one’s elders and planning for the future, like children’s education or unexpected health costs that might arise.

That’s not to say that people shouldn’t take care of their own needs, or that the United States has a perfect welfare system that allows its population to throw family values out the window. But reframing your savings to account not only for yourself but also for your dependents and family members might make you think twice about blowing your paycheck on the latest gadget.

Stay Within Your Means

When it comes to saving money, don’t buy what you can’t afford! This might sound too intuitive to even merit putting into words — this mantra became the inspiration for a hilarious and all-too-real Saturday Night Live skit about financial security — but it’s an idea that many other cultures seem to grasp better than Americans do.

Take Germany, for example, where people are so averse to debt that they use cash far more than they use credit cards. The German Central Bank found that 80 percent of its citizens’ transactions are conducted with cash, compared to only 50 percent of Americans’. They’ve even got a saying, Geld stinkt nicht (“Cash doesn’t stink”), to reflect their steering clear of credit. And Germans are among several other European states like Belgium, Italy and Austria, where people try to shy away from personal debt by avoiding borrowing.

Something similar happens in Japan, where money is generally treated with respect and dignity. That means that physical currency gets the star treatment; bills are kept crisp and clean to the fullest extent they can be and are customarily given as gifts in special envelopes tied up in red. In these cultures and others, being able to visualize and control exactly how much money you’re letting go of — and treating that money with care — means there’s a lot of thought that goes into spending and, by extension, saving.

There’s plenty to learn about frugality, saving money and responsible financial planning from countries across the world. If you’re an American looking to spend less for your New Year’s resolution, you might want to take a page out of these cultures’ playbook — or checkbook?

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