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How UK and US saving habits differ across The Atlantic

Separated by a common language, Americans and Brits have a lot of things in common, with a ‘special relationship’ that binds us together. However, there are some things – especially they way we talk about money, and our financial habits, that differ entirely.

In fact, our friends across the pond have a unique way of approaching money to the rest of the world. Perhaps because of the environment in which Americans are raised, whereby entrepreneurship is supported much more than in the UK. Building a business that reaches the heights of Facebook or other Silicon Valley tech companies is tangible, because some of the biggest success stories happened on American soil.

With this in mind, we wanted to understand how the saving habits of Americans and Brits also differ. Using Relative Insight’s qualitative analysis technology, we compared personal finance forums from the UK and the US. Geographical comparison such as this can bring to light consumer spending and saving habits which marketers can exploit when creating campaigns.

 The saving habits of Brits

“Look after the pennies and the pounds will look after themselves”
Are Brits more frugal? Famously – but from analysing forum conversations, it’s certainly skewing in that direction. When discussing money saving tactics, it seems that Brits are all about finding a cheaper alternative. From ‘bulk buying’ and buying ‘second-hand’ to searching for ‘discounts’, Brits are clearly cost savvy when it comes to saving.

As careful spenders, Brits are more 7.4x likely to suggest saving money on meals than their American counterparts, discussing ‘meal prep’ and how freezing batch cooked meals can help cut costs. Interestingly, recipe subscription boxes such as Hello Fresh also appear in Brits’ conversations, which are absent from the American data set.

A breakdown of savings
In comparison to Americans, it seems that Brits need some convincing to spend their hard earned cash. This is evident in Brits’ use of the word ‘per’ throughout forum data, which appears 5.4x more. Constantly, Brits can be seen breaking down costs and savings, working out how much they spend per day, per week or per month as a means of budgeting.

Brits in forums often talk about using challenger brand banking app Monzo to keep track of their finances. Discussing the features of the app, Brits mention that Monzo makes it ‘easy to track non-essential spending’, making people ‘aware of how bad my spending habits are.’ By applying a comparative approach, qualitative analysis can generate unique competitor benchmarking insights such as this.

Pessimistic or pragmatic?
Brits are often stereotyped as being reserved, pragmatic and sometimes pessimistic. Savings are obviously important, whether it be for rainy days, emergencies or investing in our futures. However, Brits put life into perspective. Using words such as ‘independence’ and ‘freedom’, Brits are more likely to look at savings as a fine balance suggesting you should live your life as well. What’s the point saving for the golden years that never come?

The saving habits of Americans

Financial experts
One of the biggest differences we found was how comfortable Americans are about talking about their personal investments and the stock market in general. Americans were 13.3x more likely to discuss the topic than Brits, showing how they understand the concept of investing and are happy to participate in conversations about it. While Americans speak about investing in stocks and shares, the British are found discussing their small savings that they’ve made with discount codes or vouchers!

There is a clear gap in the UK when it comes to investing savings; and lots of untapped potential that is yet to be unlocked. Iqbal Gandham, UK managing director of eToro, said to Forbes that it’s ‘primarily down to the stock market in the UK. and its opacity. Brits aren’t interested in what the FTSE going up or down means because it doesn’t relate to their everyday lives’. Clearly, there is an opportunity here for UK banks to open up the conversation around investing, educating their customers and making it an everyday discourse.

Looking to the future
Whereas Brits are often pessimistic about the savings, Americans are the opposite. They are more likely to discuss ‘long term goals’ such as retirement and saving for their ‘emergency fund’. While optimistic in their financial pursuits, the fact that Americans talk about ‘emergencies’ shows they anticipate the future much more the Brits. This could perhaps be put down to the lack of national health service and other social initiatives in the US.

Saving strategies
While Brits are more likely to save money on cheaper alternatives and small changes, Americans adopt a saving strategy that paints a much larger picture. Americans use words such as ‘method’ and ‘strategy’ 5x more that Brits, showing a methodical approach to savings.

Within their saving strategies, Americans are more likely to discuss opening multiple checking and savings accounts. Interestingly, the words ‘auto’ and ‘automatic’ also appear 6.4x more in the conversations of Americans. By automating transfers between everyday accounts and savings accounts, Americans ensure a steady increase to their funds. It seems that Americans strategic approach to savings is a lot more developed that the average Brit’s.

Although we share the same language and many of the same customs, our qualitative analysis emphasises the stark differences in how Americans and Brits save money. This language comparison shows that Brits lack the confidence and understanding to invest money. While Americans adopt a macro approach and look to increase their saving funds, Brits simply aim to reduce spending costs, rather than looking at savings as an investment into the future.

Don’t miss our next Spotlight Series webinar: Has coronavirus stolen Christmas? Join us on December 17  to discover how agencies and brands have been challenged this year, and to find out whether, despite all odds, there will be magic this Christmas.

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