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 and found that many people regret not saving more money.

People typically attribute their low savings to their career choices, employer or the economy; however, the language they speak is likely the true driver. As Keith Chen illustrates in his famous Ted Talk, the language we speak impacts our ability to save.

He discovered that Americans save less money compared to people from other countries because they speak English. The English language relies heavily on the future tense and strengthens present bias. Because the language separates the future from the present, the future seems farther away and less relevant. So, the way Americans focus on the present says we prefer money now over the distant future.

Diving deeper into Chen’s Ted Talk (2013), he analyzed 76 countries and discovered a pattern between a country’s language and its savings rate. The countries saving the least amount of money — Greece, United States, United Kingdom and Israel — speak languages with strong future tenses (futured languages). The countries with the largest saving rates, on the other hand, speak in languages with weak or no future tense (futureless languages).

For example, Germany’s saving rate (about 25%) is larger than the United States’ (about 20%), which is saying that Germans save significantly more money than Americans. 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. The way we speak in English focuses 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 a timeframe to events. “Will rain” says future and can be distant from the present (futured languages), while saying simply “rain” without a context of time shows the event is the same whether it is in the past, present or future (futureless languages).

In regards to money and saving, if the future seems farther away from the present, those who speak futured languages will believe saving money can take too much time, compared to those speaking futureless languages who view the present and future as the same.

Another example, the Japanese, who live in a high savings country (about 30%), would also describe the weather similarly to the Germans. 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.

People tend to have a strong present bias, which is the human tendency to value smaller present rewards over larger future rewards. In other words, we want rewards now vs. later. Our present bias makes it difficult to save money for Americans or futured language speakers because the benefit arrives in the future.

Chen found 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.

Conversely, Americans and heavy future-tense speakers value present rewards more. Chen also found that 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.

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.