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

Are you financially literate?

On August 1st, ASIC launched its National Financial Literacy Strategy for 2014. See press release

According to the article, financial literacy is about having the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial wellbeing. It is considered by many as a ‘core life skill for participating in modern society.’

I personally think it is a fantastic move that, if implemented correctly, will have huge future benefits for not only the individuals that embrace the education, but for the prosperity of our nation as a whole.

‘With almost every Australian owning one or more financial products, improved financial literacy can benefit anyone, regardless of age or income, in term of having greater understanding of financial matter and the ability to meet financial goals for the future.’
ASIC’s strategy is being deployed using all the latest technology. They have a dedicated website with loads of useful tools and calculators.

Odyssey is also at the forefront of money management having recently released its Odyssey Smart Money offering using cutting edge Moneysoft software. We take a step further from ASIC’s initiative, by helping you manage your money in real-time, with automatic bank feeds and pro-active tracking processes. Managing your household finances has never been so easy – or accurate! Check it out here

I truly believe that good money management will beat any ‘get rich quick’ scheme over the long run and I look forward to seeing the results pan out in this space!

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

 

Discover how the inner circle can help you. Contact us today for a financial consultation.

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.