Ethnicity and religion: Do they influence whether you can save money?

Knowing what is good for us doesn’t mean we will actually do it.

Do you believe in a higher power? Are you Chinese? If so, you are more likely to save money.

If financial advisers could instil in their clients a set of essential habits to ensure financial wellbeing, it would have to include the ability to save.

While saving isn’t an end in itself – you still need to plan how to use your money – without the discipline to create a nest egg, it’s hard to achieve important life goals.

If only that simple piece of advice, to save a percentage of your income as soon as you can, was as straightforward to implement as it sounds.

Just knowing what is good for us doesn’t mean we will actually do it.

So what is likely to strengthen our saving muscle? A good income helps, but is no guarantee.

“I see some very high income people with great houses and cars, who cannot save,” says Helen Dundon CPA, financial adviser with BaillieuHolst in Adelaide. 

“As income rises, so too does spending. Without any planning you can end up with nothing.” 

Ethnicity, upbringing and belief – their influence on saving

Other factors related to ethnicity, upbringing and belief are also influences, according to new research that explores drivers of savings beyond income.

A three-country study [Australia, Canada and China] conducted by the Krida Wacana Christian University in Indonesia, in conjunction with Sydney’s Macquarie University, surveyed 755 adults, who were classified according to income, religion, ethnicity and immigrant generation: Chinese living in China; first generation Chinese living in Australia or Canada; second generation Chinese living in Australia or Canada, and Caucasian. 

Results show that the influence of ethnicity is especially strong, with people of Chinese heritage saving much more than Caucasians.

Even the lowest-earning Chinese people living in China saved more – 31.3 per cent of their income – than the highest-earning Caucasians, who saved just 15.7 per cent.

This comes as no surprise to keen saver and Sydney finance analyst Jeff Poe of Platinum Professional Training, whose grandfather and wife were born in China.

“The strong pressure to start a family early in life, the absence of a social safety net, and the sheer competition in a country with such a high population, all make saving the most basic thing you do to survive,” he says.

For Chinese people living in China, their savings rate increased with income, reaching 48.9 per cent for the high-income group earning more than A$80,000 a year. This trend wasn’t, however, sustained by first- or second-generation Chinese living in Australia or Canada.

First-generation Chinese saved less than the second generation, suggesting that after the party of living in a wealthy country providing social welfare, more restrained spending resumes.

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The role of belief in savings habits

Whether you believe in a higher power also plays a role, the study found.

Among middle income earners, religious people saved 35 per cent of their income, while the non-religious saved 27 per cent.

Some religious people may spend less and save more because they are pursuing spiritual rather than material goals, the study’s authors suggest.

Among high income earners, however, religion had a very strong but opposite effect, with religious groups saving less (25 per cent) than the non-religious group (36 per cent).

“These results show how complex is the interplay of influences and why it’s important not to make assumptions,” says study co-author, associate professor Chris Baumann from the Faculty of Business and Economics, Macquarie University and a visiting professor at Seoul National University in South Korea.

Languages spoken at home can affect savings habits

Even the language we speak, and how it references time, affects our propensity to save, according to Keith Chen, associate professor of economics at the UCLA Anderson School of Management, Los Angeles.

His 2013 research found that people who speak what he describes as a “futureless language” that blurs today and tomorrow, such as the Malaysians and Chinese, are 30 per cent more likely to save in any year than those who speak a language that grammatically separates the future from the present, such as the English and Greeks.

Dividing the future and the present makes saving harder by making the future feel more distant, Chen proposes.

With so many factors and nuances at play, what does this mean for practitioners who want to influence their client’s behaviour?

While we can’t change our native tongue, our cultural heritage or our conditioning around money, we can change our attitude. 

Dundon finds that the best way to create a positive mindset about saving is to have a good reason to do so.

“The most important thing is having a goal,” she says. 

“Most people are good at saving if they have a reason to. I never see saving for saving’s sake.”

Melbourne-based CPA and Financial Planner Paul Kearney, of The Kearney Group, knows that motivating clients to follow a financial plan is key to being an effective finance professional.  

“Over the years, I’ve learnt not to make assumptions about a client and what’s important to them,” he says.

 Before seeing a new client Kearney makes a conscious effort to clear his mind of any preconceptions – a practice that Baumann’s research, which highlights the complexity of saving behaviour, supports.      

 Source: Means extracted from Table 3.  Hamin Hamin, Rosalie L. Tung, Chris Baumann & Susan Hoadley (2016): Customers’ savings rate and share of wallet: the moderating role of religion and ethnicity/ immigrant generation vis-à-vis attitude as mediator, Journal of Strategic Marketing,DOI:

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