Which countries save the most, you know, personal savings accounts, piggy banks, cash under the mattress and all of that financial stuff? It’s a great question. And a serious one at that given the worldwide recession, not to mention austerity and job insecurity we’ve all been experiencing over the last few years. There are lots of reasons to save money. In fact there are as many tips and gurus out there as there are reasons, if truth be told. So you pays your money – make that saves your money – and you makes your choice. The Wealth Professor, for example, urges everyone no matter their age to open a savings account which is as much about the habit of saving as opposed to the actual amount stashed away each week or month.
The Wealth Professor’s top five reasons for saving are:
- It’s good for you, psychologically. Making savings part of the regular cash flow teaches that money is hard to save and easy to spend. Putting money away for a rainy day and seeing how difficult it can be to stick to a savings schedule will show you to better respect the money you work so hard to acquire.
- Savings gives you “wriggle-room” and the confidence to deal with the unexpected, providing the support to effectively manage difficult times.
- No need to rely on stress-inducing credit cards or pay-day loans and the high interest rates charged which could lead to difficulties paying back any money borrowed.
- Having a savings account not only increases confidence and reduces stress but also lowers overall borrowing costs.
- Finally, a savings account helps grow wealth because you’re not spending money on interest. Instead, the money saved could help pay down your mortgage, for example, or help you save more towards retirement.
There you have it, five good reasons to save. So which countries are the best savers? That depends on how you frame the question. If you mean the countries where people save the most money then amazingly Ireland comes out on top. But if you mean countries in terms of both private and public savings then oil-rich Qatar is the world’s leader. Surprised?
In fact many of the countries making up the oil-rich Gulf States figure highly in the International Monetary Fund’s (IMF) list of super savers. As well as Qatar in first place, with a total of $200 billion in private and public savings, equivalent to 59% of GDP, Kuwait comes second ($186 billion and 55%), Saudi Arabia fourth ($718 billion and 48%), the United Arab Emirates (UAE) ninth ($390 billion and 40%) and Bahrain 10th ($28.4 billion and 39%). Iran comes in at 11th place ahead of Norway and Oman. China dwarfs all others in terms of its economy but nevertheless its savings of $8.9 trillion represents 51% of GDP and therefore puts it only in third place.
According to Forbes, the United States, whose economy is nearly double the size of China’s, saves an estimated $2.8 trillion, the equivalent of 17% of GDP. Of the top 15 countries, 11 have economies based on oil. Most of the Middle Eastern countries on the list began saving huge amounts of their money around 2000, at a time when oil prices were spiking. Check out the Forbes story here.