How You Speak Affects How You Save Money

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Does language affect savings? In a fascinating TED Talk, Yale behavioral economist Keith Chen presents evidence that people who speak languages that don’t have strictly future or past tenses are a lot more likely to save money.

Chen’s talk is one of five personal finance-related TED Talks that GoBankingRates.com says “will change how you interpret personal finance.”

TED Talks are relatively short videos covering a broad range of topics from some of the most engaging speakers around the world.

Chen says speakers of languages with weak future tenses, like those in Germany and Finland, are more likely to save money than speakers of languages, like English, with strong future tenses.

“Futureless language speakers are 30 percent more likely to report having saved in any given year. By the time they retire, futureless language speakers – holding constant their income – are going to retire with 25 percent more in savings,” Chen said.

Chen provided the following example of “futured” vs. “futureless” language:

  • English. It rained yesterday. It is raining now. It will rain tomorrow.
  • Chinese. It rain yesterday. It rain now. It rain tomorrow.

Chen theorizes that futured language speakers feel and speak about the future and present differently. The future seems distant; thus, they are less likely to plan for it, and saving money is just one example of that.

He said the opposite is true for futureless speakers, who feel and speak identically about the present and future. Chen said this correlation is not just true for economic decisions; it’s also a factor in smoking and obesity rates.

Sound a little too far-fetched? I thought so too, but Chen makes some rather astonishing conclusions. Check out Chen’s talk, and decide for yourself. Then share your thoughts below or on our Facebook page.

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Comments & discussion

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  • Y2KJillian

    Those who commented below the TED talk and speak other languages don’t generally agree with Chen…some don’t seem to understand quite what he means by “futureless” languages, and others disagree anyway. It’s subtle…and saving behavior is often well-learned by learning from parents, even before a child is fully aware…so saving behavior could be passed on through cultures that also develop “futureless” languages because the attitude toward savings was different all along and the language followed…as one commenter stated, “Correlation is not causation,” which is, of course, true. Chen said investigation in to this continues, and rightly so. Good idea, interesting talk, and he does a good job of it. Certainly food for thought.
    I go yesterday, I go tomorrow, I go today.
    Jillian

  • socrates2

    And all this time I believed it was a function of ADHD and Pavlovian conditioning. Unless the former defeated the latter thanks to a well-embedded “habit,” one pretty much did not give the “future” a second thought…. Ergo, did not save.
    Be well.