Should we re-evaluate our saving habits by 'going Dutch'?

03 August 2018


David Douce
David Douce

There is a fair chance that there is something in your life about which you are ridiculously, unnecessarily stingy.

In our house, washing-up liquid bottles are suspended upside down in weird devices so that we get every last drop of precious liquid out of them.

A friend lives in almost total darkness in order to minimise his electricity bill, prowling around the house switching off lights behind people - his job is looking after energy use in office blocks.

The multi-millionaire Jean Paul Getty famously had a payphone in his hall for guests. None of these are really rational, and the effort could be put to better use elsewhere.

People sometimes save money towards specific purchases – a car or a holiday, for example. But some people simply save because it is a habit they have, and makes them feel comfortable, just like our obsession with washing-up liquid. In the UK we aren’t so good at saving for its own sake, or putting things aside for a rainy day - perhaps it’s time to take inspiration from further afield?

Following The Netherlands’ lead

At the moment, the UK is not very savings-conscious. We seem better at spending than saving, and a whole series of factors push us towards this behaviour.

We were early adopters of credit cards, for example, and the current trend of leasing new cars encourages us to spend constantly. In my distant youth, our primary school used to sell National Savings stamps on Friday mornings, and in the mining village where I lived just about everyone bought them. Saving was seen as a good thing for the nation and for the individual, whereas now we are told to worry when high street sales are falling. Spending is presented as one of the key measures of a healthy economy.

Talking to some Dutch students about how they financed their studies recently, it was clear that their attitude towards savings was far more in the emotional/irrational corner. They just assumed that you should save, and while their courses are vastly cheaper than those in the UK, they used that fact to help them save rather than to allow them to spend more.

One of them had finished a first degree, and then decided to do another course, and just had the 4k euros in his savings account to pay for this. He lived a super-economy lifestyle, had a basic mobile phone, a bike inherited from his grandfather. His pizza diet was homemade, not delivered.

He was surprised that I was surprised – all his friends had savings too. That was just what they did.

‘Saving by children’ or ‘saving for children’

This made me look at savings products for children in the UK. In nearly all cases, it seemed like these were built on the assumption that parents or grandparents actually do the saving, and it’s just the account that is in the child’s name.

So, rather than children learning to save for themselves, money in these savings accounts will simply be cash available for spending by the children at some later point in life - so saving for children rather than by children. The way these accounts are used currently doesn’t encourage children to develop saving as a habit, but to splash out when they’re older.

It might be worth re-evaluating the way saving is presented and encouraged, to give back its emotional weight and make it more part of normal, habitual behaviour. The chances are that the earlier this starts, the more likely it is to develop into an emotionally-driven habit.