Are Native-English Speakers Worse Savers? How You Speak Can Affect Your Views on Money

In his book, The Power of Regret: How Looking Backward Moves Us Forward, Daniel Pink surveyed 4,500 Americans in the most extensive regret analysis in history. His participants shared numerous remorses (over 15,000 regrets), but one repeated like a broken record, “I wish I had saved more money.”

Pink’s participants attributed their saving behaviors to career choices and economic factors. But they’re missing one key reason, says Keith Chen. In his famous Ted Talk, Chen shares that Americans save less not due to poor economic conditions, but because they speak English. The language we speak impacts our ability to save.

Americans are not the only ones with poor savings habits. Chen (2013) analyzed the savings behavior of 76 countries and discovered a pattern. The countries saving the least amount of money — Greece, the United States, the United Kingdom and Israel — speak languages with strong future tenses (futured languages). Conversely, the countries saving the most — Luxembourg, Japan and Germany — speak languages with weak or no future tenses (futureless languages).

For example, Germans save significantly more money than Americans. The savings rate in Germany is 25% compared to 20% in the United States. According to Chen’s findings, Germans save more because they speak a futureless language. To illustrate his point, let’s break down the German language and compare it to English using weather as an example: An American would describe tomorrow’s rainy weather as “It will rain tomorrow.” Now, a German would describe the same event as “It rains tomorrow.”

Notice how the German phrase does not conjugate the verb “rains” to the future tense. The English phrase not only conjugates “rains” into “rain” but adds the word “will” to distinguish the future from the present. English is structured to focus on time: we have past (“It rained yesterday”), present (“It is raining”), and future tenses (“It will rain tomorrow”). As we view the world in these tenses, we subconsciously add timeframes to events.

Futured speakers save less money because the future seems far away. English speakers only value short-term rewards and cannot see the benefits of saving. In their minds, why not push to later?

Futureless speakers, on the other hand, view the present and future as intertwined; they understand that saving now yields future benefits.

Like the Germans, the Japanese speak a futureless language and save more money (about 30%) than most people in other countries. The Japanese would describe the weather by simply adding a temporal phrase like “tomorrow” instead of conjugating “rain” into the future form. Because the Japanese view the future and present in the same way, they are more likely to save significantly more money than Americans or futured language speakers.

Futured language speakers spend larger percentages of their income because of the present bias, which is the human tendency to value smaller present rewards over larger future rewards. In other words, futured speakers want rewards now vs. later. This is why Americans find it difficult to save enough for retirement.

Chen found that the present bias transfers to other behaviors. In his research, Americans, Greeks, Englishmen and Israelis not only save less money but they view health similarly; they tend to exercise less and smoke more cigarettes. These activities offer a small reward now, but become hurtful in the future, such as being in debt or having serious health issues. For example, if Americans aren’t saving for retirement now, they may continue to work far beyond retirement age.

Chen also discovered that people speaking futureless languages (similar to German and Japanese) perceive no difference between the future and the present. Their frequent use of the present tense reduces the psychological distance from the future and current reality. People are more likely to save when the future appears closer to the present.

Now that you’re aware that your language is likely influencing how you save money, you can fix it. Here are tips to correct your present bias and start saving more.