A study comparing household savings in the United States and China finds 59 percent of Chinese urban households save for education, compared to only 19 percent of US households.

In fact, urban Chinese households, on average, save much more than American households. The difference stems from saving motives, says Rui Yao, an assistant professor in the personal financial planning department at the University of Missouri.

“Saving is one of the critical tools that households utilize to achieve financial goals and to improve financial well-being,” Yao says. “By looking at saving motives for households in each country, we hope to explain the difference in saving rates across these two countries.”

For her study—which will be published in the Family and Consumer Sciences Research Journal—Yao looked at three common savings motives: precautionary, education, and retirement. By studying and comparing results from the American 2007 Survey of Consumer Finances and the 2008 Survey of Chinese Consumer Finance and Investor Education, Yao found nearly 60 percent of Chinese households save for precautionary reasons, while only 35 percent of American households have similar saving motives.

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