Personal savings in a country is equal to personal disposable income minus personal consumption expenditures. It has been witnessed that the Japanese people have a lower degree of tendency for consumption in comparison to the people in the United States. This also proves that the people in Japan are more inclined towards savings. Per household savings in Japan has demonstrated a continuous increase for a number of years on a regular basis till the year 1998. The average savings per household amounted to 76,637 yen in the year 1984 and in the year 1998, it was 142,335 yen. At this time, savings had risen on an average of 3.5% every year. During the period of 1998-2001, the per household savings went down from 142,335 yen to 129,681 yen and it diminished at a mean of 3% every year.
This fall in savings happened simultaneously with a same kind of percentage fall in disposable income during the same time. In Japan, the ratio of household savings to household disposable income indicates towards the high propensity of savings of the Japanese people. The people in Japan have a fairly large comparative savings rate and it has demonstrated a steady rise from 21.3% of disposable income in the year 1984 to 28.7% of disposable income in the year 1998. In the period of 1998-2001, there was a small fall of 0.8% in the absolute savings, which coincided with the decreased disposable income at that time. This savings amount is quite larger than the savings amount of the consumers in the United States.
In terms of a reciprocal relation with the saving in Japan, a larger percentage of the income of the Japanese people has also declined. As a result, the ratio of expenses to saving has diminished. In the year 1984, the ratio of expenses to savings figured at 369% and it diminished at a mean of 8% every year and figured at 248% in the year 1998. During the period of 1998-2001, the ratio went up at approximately 10%, which is anticipated from the small decline in the savings rate. These figures are significantly lower than the similar ratio in the United States.
In conclusion, it can be said that the Japanese have a high savings rate and it is increasing. Their expenditure habits are steady in nature. The ratio of expenditure to savings is also diminishing.
