Image by kenteegardin
Saving is about the future. It’s about planning ahead and getting ready for something that is yet to happen, something out of sight and maybe even out of mind. If that seems obvious it might be something to do with the fact the idea is coming to you in English.
Recent academic research by behavioural economist Keith Chen has shown that the way we talk about the future has a dramatic effect on how we think about it. And that in turn makes a massive difference to how we go about preparing for a rainy day. This has made reading a report on savings from HSBC that was released recently doubly interesting.
It turns out that there is a correlation between populations that save a lot and how their language describes the future. So languages like Mandarin, Estonian and German just happen to map onto populations that show a markedly high level of personal saving (as measured against GDP). In contrast, languages like English, Greek and Indian variants save proportionately much less – the distinction is 10% between English and German, and as much as double that between the main Chinese and Indian languages and Estonians and Greeks.
There are other factors in play, of course, but Chen’s research convincingly shows that what is common to those populations that tend to save proportionately more is that they use grammatical forms to describe the future which represent it as closer to the present than those that don’t. So in English a different tense marks the future as separate from the here and now. In German, for example, that doesn’t happen – or at least it happens less. In effect the future is psychologically closer to Chineseand German savers than it is to British ones.
Against that backdrop it’s interesting to note that HSBC found recently that average personal savings in the UK have risen by as much as 15% since 2013. The same report found that 51% have added more to their savings pots over the preceding twelve months than they have withdrawn from them, up from 39% in the previous period.
The local economic conditions in the UK are clearly the driving factor in this as the British economy continues to move out of of formal recession, but it has to be said that similar conditions are affecting comparable economies elsewhere.The UK GDP growth figure is estimated at 3.2% by the IMF. There is clearly some flex in Dr Chen’s model, but even so it gives saving for the future a whole new dimension.
For the record, Dr Chen’s argument extends beyond our specific concern with saving. Speakers of languages that make thatpresent/future split not only tend to save less, they also retire with less wealth (perhaps not unrelatedly), they smoke more, practice more unsafe sex and are more obese.
For those of us who think this way (i.e. those of us speaking English!) way the idea that ‘tomorrow will take care of itself’ maybe has more far reaching consequences than we might imagine.
