Guest Post: How Culture Affects Money Habits

Since I’m on vacation this week (today is my last day), I thought I’d use the time to showcase some guest bloggers. Today’s blogger is Dannielle, a new personal finance blogger from Barbados. Her blog Odd Cents is a mixture of personal finance and lifestyle, featuring exciting articles, tips and suggestions.

How do you view money? Do you see it as something which is meant to be spent here and now, and as soon as it is received? Or is it a commodity that is meant to be enjoyed, but can be passed down from generation to generation hence creating wealth for those to come after you? Personally, I think it’s a bit of both. Money is relevant “now”, but can be of value in the future.

The way that you view money can be influenced by your culture. An old teacher once described culture as the way of life of a people which is usually passed down from generation to generation. In many cases, the way that you are socialized can determine your attitudes towards money. My parents do not spend wildly – they are very level headed and cautious when it comes to money, and I have those same traits. Their parents also lived by these rules and now they have been passed on to me.

A couple weeks ago I watched a documentary which compared the money habits between the western world and the eastern world. One of the points I noted was that the Chinese saved approximately 20-40% of their income as compared to us in the west, who save only 5%.

For example, let’s assume that your salary is $1000. The documentary is basically saying that the western world saves between $200 and $400, whilst those in the eastern world, save a mere $50. I’m not sure what statistics would have been used to come up with such figures, but that’s a pretty big difference.

One possible reason for this difference in saving habits was perhaps alluded to in an article written by Xin Lu, which is a perfect example of how culture affects money habits. She explains how her Chinese culture influences her attitude towards money. Her principles were based on age old Chinese traditions of frugality, saving, paying for items with cash and looking for a bargain.

Unfortunately, not all of us have positive cultural influences which affect how we view money. But, there are some people, who have chosen to turn that into a positive effect and create their own cultures which encourage good money habits. I’ve read many stories where people admit that their parents and guardians were horrible with money and are in dire financial situations. They in turn use the mistakes as life lessons on what not to do.

How does your culture affect your money habits?