U.S. vs. Asia: Personal Saving Rate

As described by the Bureau of Economic Analysis (BEA), "personal saving" is the amount of money out of your income that you don’t spend and don’t pay in taxes. It’s what you can put in the bank or stock market. The personal saving rate is personal saving expressed as a percentage of disposable personal income.

Despite the U.S. personal saving rate (see graph) is now positive, it’s only been ranging from 0.3% to 4.9% this year. Between the 60’s and 80’s, the saving rate was around 10% on average. This rate has been falling for 20 years. It was 10.8 percent in 1984, 4.8% in 1994, 1.8% in 2004, and 0.4% in May 2005. Are Americans simply spending too much/saving too little and relying too much on debt?

U.S. Personal Saving Rate

Comparing to some major Asian cities, the answer is perhaps yes. A survey conducted by HSBC shows that the people in the six major Asian cities, Taipei (Taiwan), Hong Kong (China), Shanghai (China), Seoul (South Korea), Tokyo (Japan), and Kuala Lumpur (Malaysia), put away 18%-31% of their total incomes. Is there something we can learn from here?

Savings Behaviors for People in Major Asian Cities
Item / City	Taipei	Hong Kong	Shanghai	Tokyo	Seoul	Kuala Lumpur
Average monthly savings (US$)	449	424	86	538	720	99
Savings over incomes (%)	31	25	29	18	29	21
Average amount prepared for retirement (US$10,000), excluding expected pensions	23.2	25.5	2.5	29.2	27.5	4.0
Those confident in achieving expected savings for retirement (%)	44	39	53	34	43	71
Those have sent or intend to send children abroad for study (%)	35	41	17	11	25	48
Average savings for children’s education (US$10,000)	12	8.1	1.7	5.5	8.1	5.7
Those confident in reaching the savings goal for children’s education (%)	45	53	57	60	58	68
Expected savings for purchasing real estate (US$10,000)	17.5	–	6.8	17.5	22.1	9.4
Average years needed to reach goal for purchasing real estate	7	–	7	9	6	9
Those confident in reaching goal for purchasing real estate (%)	52	–	57	57	55	63