Could we have trouble saving – just because we speak English?

I recently watched one of Ted’s most popular Talks, in which economist Keith Chen poses an interesting question: Is there a connection between language and how we think and behave? And in particular: does our language affect our economic decisions?

Chen’s raised this question after an observation he made:

To say, “This is my uncle”, in Chinese, you have no choice but to encode more information about said uncle. The language requires that you denote the side the uncle is on, whether he’s related by marriage or birth and, if it’s your father’s brother, whether he’s older or younger. All of this information is obligatory. Chinese doesn’t let me ignore it,” says Chen. “In fact, if I want to speak correctly, Chinese forces me to constantly think about it.”

Chen designed a study — which he describes in detail in this blog post— to see if language indeed affects an individual’s ability to save for the future. According to his results, it does — and quite significantly so.

Chen explains:

“While futured languages, like English, distinguish between the past, present and future, futureless languages, like Chinese, use the same phrasing to describe the events of yesterday, today and tomorrow. Using vast inventories of data and meticulous analysis, we found that huge economic differences accompany this linguistic discrepancy. Futureless language speakers are 30 percent more likely to report having saved in any given year than futured language speakers. (This amounts to 25 percent more savings by retirement, if income is held constant.)”

When we speak about the future as more distinct from the present, it feels more distant — and we’re less motivated to save money now in favour of monetary comfort years down the line.”

Don’t be fooled by language, make the conscious decision to start thinking about the future. Contact one of our advisers today to discover how you can make your desired lifestyle a reality.

Written by Silke Poortman – Sales & Marketing Manager, Odyssey Financial Management

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Check out more interesting research on the link between language and both psychology and behaviour here

Source: http://www.ted.com/talks/keith_chen_could_your_language_affect_your_ability_to_save_money

ODYSSEY Magazine – Summer Edition

In this edition we look at some hints and tips that can help your business manage cash flow better in 2015 and beyond. We also look at ways to ensure you are financially prepared when starting a family. Our regular feature from Piers Bolger, Head of Research & Strategy at BT Financial Group, delves into investment sentiment in markets from around the world for the past quarter. And finally we discuss ways to ensure you don’t fall victim to fraudsters this year.

From our team, we wish you and your family a safe and happy new year. For a full version of our newsletter, please click here. Until next time – happy reading.

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This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.
Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.
Odyssey Financial Management is an authorised representative of Total Financial Solutions Australia Limited.