Synovate In:fact May 2005 - Save it, spend it, or throw it away

Money makes the world go round. To learn more about people's attitudes to money around the world, we recently surveyed 5,627 people in the US, France, Portugal, Romania, Germany, Spain, Serbia, Bulgaria, Singapore, China and Taiwan.

This study offers marketers some useful insights. Among other things, we learned that a significant percentage of people literally throw money away...

Who gets it, who gets to keep it...

Many financial pundits recommend putting aside 10% of everything you earn. Only in Asia is this recommendation followed by the majority of respondents. In other countries, more than half the respondents said they save less than 10% or nothing.

On the whole, Americans, Germans, Taiwanese and Singaporeans are the biggest savers. Around 80% of respondents in these countries said they save some money.

Unsurprisingly, given their economies, Serbians and Bulgarians save the least. Despite similar income levels, the nearby Romanians are significantly thriftier.

Among wealthier nations, the French appear to be the biggest spenders, with 38% saving nothing, and only 21% saving 10% or more of their income.

Essentially, non-essentials are essential

In all countries, around 90% of respondents said they spend money on non-essential items.

We've already seen that Bulgarians aren't big savers. One reason perhaps is because nearly all of them report spending money on non-essentials. Furthermore, they spend relatively a lot in proportion to their income.

That's quite the opposite to Germany and Portugal. In both countries, 13% of those polled said they spend nothing on non-essentials. Germans and Portuguese also spend relatively little in proportion to their income.

Gimme a break (I don't mind paying for it)

Holidays and clothes turned out to be the non-essential items most preferred to splurge on overall.

Respondents in the US, Germany, Spain and Singapore put holidays before clothes. The French, Portuguese and Chinese put clothing, accessories and shoes before rest and relaxation.

Consumer electronics marketers should take note that technology and electronics items are the non-essential indulgence of choice for about one in five of our East European subjects.

And anyone who is marketing knowledge should head for Spain, Bulgaria, China or Taiwan where a well-above-average number of respondents said they liked to splurge on education or training.

The French, Americans and Taiwanese were the most likely to lash out on a great meal and jewellery, the Serbians on sporting equipment, and the Portuguese on a ticket to a sporting or cultural event, or on an "adventure" such as skydiving.

Ultimately, savings are for spending

We asked respondents if they ever dipped into their savings. And if so, why. At least 60% in every country said they had. Marketers in Taiwan face the biggest challenge when it comes to enticing savers to spend. And Serbians are the most likely to dip into their savings, but mostly to lend to a friend or relative.

In general, 29% of respondents admitted turning to their savings to fund some extravagance. This was true of more than a third of Romanians, Germans and Spaniards polled.

Bulgarians don't mind hitting their savings in an emergency. But they were the least likely to lend out their nest egg or blow it on some extravagance.

Habits you can bank on

We probed respondents' money habits and attitudes by asking if they agreed or not with a variety of statements. Among our findings: fewer than half of all respondents automatically put aside money on a monthly basis. That indicates there's plenty of scope for managed investment services.

We also learned that in the US more than in any of the developed countries surveyed, people agree that a significant percentage of their monthly salary goes towards monthly debt repayment. Respondents in Asia and France were the least likely to be paying off big debts.

There's nothing quite like retail therapy when you're feeling down. Agreement with this statement was strongest in Romania (42%), Serbia (39%) and Bulgaria (44%), least strong in China (16%), Taiwan (19%) and the US (20%). This considerable variety in attitudes appears to be related to cultural differences.

Overall, 27% of people will contribute more than the minimum requirement to the company pension plan. People in China, Taiwan and Germany appear to have the longest outlook in this regard.

Generally, very few people agreed that they didn't need to save because they expect to inherit money.

Keep the change? No, throw it away

Tossing your low value coins into a big pot is a very ancient habit — so much so, ancient coin hoards found in archeological digs are almost invariably of low denomination.

We asked our subjects what they did with small change. Overall, 47% use it as soon as possible, 42% save it (presumably in a big pot) and 8% just throw it away!

Bulgarians were the most likely to use up small change, Americans, the least likely. And with 75% of Americans saving their small change, future archeologists can look forward to bumper stocks of US coins.

So who exactly throws money away? The following table reveals all.

Did you know that if you saved $1 per day and invested it at 10%, you'd have almost $200,000 in 40 years? Logically, almost everyone should be able to accumulate at least some savings.

Of course when it comes to money, logic is no match for emotion — which is why marketing that's effective will almost invariably appeal to both.

Thank you for reading Synovate In:fact. This issue of In:fact was based on information gathered from a TeleNations Global telephone omnibus survey. These are regularly conducted in over 30 countries across the Americas, Asia, Europe, Africa and the Middle East.

If you'd like more information about this study, please email infact@synovate.com.

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