Cultural Differences in Saving

Saving and spending as learned behaviors

by Chia-Li Chien | June 06, 2011

Recently, I was pleased to be one of the panelists for “The Financial Outlook for Women Across Race and Culture In Today’s Economy” by the Women's Inter-Cultural Exchange. I was delighted to see over 200 participants at Queens University attending this interesting look at this topic.

Here are some of the questions and answers we took during my panel discussion:

Question 2: What is the difference when it comes to money – both saving and spending – in women-owned small businesses?

Chia-Li’s Answer:

Let’s take a look at retirement savings behavior in small business:

Chia-Li Chien's WIE Presentation


Business owners are more likely to own tax-deferred IRAs if they are older, female, white, non-Hispanic, better educated, and married. Women are more likely than men to own an IRA, while men are more likely to own Keogh accounts and participate in 401(k)/Thrift plans. Some 56% of small business owners have retirement savings accounts. One-third of those who have an IRA don’t contribute regularly or at all.

The IRA ownership rate for business owners is only about 36 %, and only one-third of business owners with an IRA contributed for the 2005 tax year. Less than 2% of business owners have a Keogh plan. Only about 18 % of business owners participate in a 401(k)/Thrift plan.

Chia-Li Chien's WIE Presentation

Small businesses accounted for half of all U.S. private-sector employment. To fuel their small businesses growth, many business owners turn to banks or investors for financing. There are six types of private capitals available to small businesses. However, the majority of small businesses use only 1 out of 6 private capital options available to them. According to the Small Business Administration, 60% of small firms use credit (loans or lines of credit) or use trade credit (from suppliers). This interesting study concluded that minority-owned (Asian, black or Hispanic), located in rural areas, with owners with less experience and less education are unlikely to use any sort of credit (bank or trade) when it comes to financing.  About one out of five firms will use both banks or trade credit as a financing tool.

For more information read my article Need Money? Think Private Capital Markets


  • Small Business Retirement Plan Availability and Worker Participation, Kathryn Kobe, Small Business Administration, Office of Advocacy. March 2010.
  • Bank Credit, Trade Credit or No Credit: Evidence from the Surveys of Small Business Finances, Small Business Administration, Office of Advocacy. June 2010.

Other related questions:

Question 1: What are the differences when it comes to money and savings among Asian Americans, Native-Americans, Caucasians and why?

Question 3: What does retirement, business exit or cashing out mean to women business owners?


Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li "like JOLLY!" Passionate leader of small business strategic value creation and implementation Mastery. She is CEO and chief strategist of Value Growth Institute –Creating business value that transforms your world. She is the Award-Winning author of "Show Me the Money." Grab a free sample of "PROFITS MATTER® 1GAP" to grow your business at


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