The only data I’ve been able to get for all the countries at once, is for the year 2010. Luckily, it isn’t so far off from 2013, and the savings rates at a quick glance, haven’t really changed much from 2010, except in the fractions of percentages:
Here’s the chart I created in order of highest to lowest savings rates around the world for 2010
(Click to biggify anything)
China and India are the two towers of savings you see on the left.
New Zealand and Denmark are the two towers of not-saving you see on the right.
SAVE LIKE A DEVELOPING NATION FOR OPTIMAL RESULTS
It’s cultural as well, I’m sure, but China and India are blowing everyone else out of the water in terms of savings rates.
…OR AT LEAST SAVE LIKE SOME EUROPEANS
Aside from India or China, if we take a look at the next tier of double-digit savers from Turkey, France, Spain, Germany, Belgium and Portugal, their savings rates of 10.20% to 19.50% are nothing to sneeze at.
I received an email from a lovely reader (*waves!*) in Germany who told me that she recently read a statistic that young people (aged 14-25) are now saving about 28% of their income, and 20% of them, have already started saving for retirement, above their national average of 13.6%.
She also goes on to note that they can save 28% because they’re also living at home, so it helps.
AND WHERE DO WE STAND?
Clearly for Canadians and Americans, we’re not doing as well as we could.
The estimated savings rates for 2013 are actually lower than that.
Canada is set for a savings rate of 4.3%, and the U.S. is set for a savings rate of around 4%.
Australia will also up its game at 12.10%.
In detail, here are the specific numbers:
Data taken from: GFMAG, Business Week
ARE YOU KIDDING ME? LESS THAN 5% IS NOT ENOUGH
If we only save about 4.3%, it is for one thing, not even close to the PF maxim of save at least 10%, and certainly not enough to secure your future.
I like 15% – 25% as a new savings maxim for the future.
Let’s say you make $30,000 a year.
Your net income is $25,942, which is about $2161.83 a month.
4.3% for Canada, is about $92.96 a month.
In 30 years, it’d be $93,379.71.
Now it makes so much more sense why the average retirement savings for a person about to retire is only about $100,000.
Furthermore, with 4.3% as the average, it means that there are people saving less or more than that!
WE AREN’T SAVING ENOUGH!
In contrast, if you saved like other countries mentioned above, it’d look like this with a $30,000 salary per year:
Looks like China, India or Turkey would be my role model if I was earning $30,000 gross a year.
Obviously if you earn more, you could afford to save a bigger percentage of your net income, but you’d have to hit at least the same absolute dollar savings of about $10,000 a year to reach those numbers.
It’s why it’s better to look at your net savings per year rather than as a percentage of things.
You can get lost into thinking that you’re doing well, and you can afford to upgrade your lifestyle when you should really be doing much more.
That’s a rather high percentage of savings however, almost 40% is crazy, especially with the higher cost of living here versus a developing nation.
How do you figure out how much to save without starving?
To do all of the above, you need to know how much you spend on average, and where you can cut back on your spending.
If you have NO IDEA where your money is going, you can’t make any changes.
Estimations are for people who don’t have facts.
If I only estimated how much I spend each month rather than really tracking it, I’d be consistently under by a solid 30% – 50%, no doubt, and I would have been hard pressed to remember each category as an average each month.
Plus, I wouldn’t be saving as much as I am today, because I’d be out there wasting my money on crap without knowing where it’s really going.
I’d probably be appalled at my spending once faced with the numbers on some debt show that I would eventually end up on.