As a general rule, when people are afraid of losing their job they increase their savings rate and when they are confident about keeping their job they reduce their savings rate. This occurs across cultures and countries. When a country goes through a severe economic crisis, then the savings rate makes a permanent increase from psychologically-scarred survivors. For example, the Great Depression, areas destroyed in World War II, countries hit hardest with the 2007 financial meltdown, all of these places change attitudes that you must rely on your own savings.
China is a country with little social safety net and the common saying is, “If you do not work then you do not eat”. As a result, they have one of the highest savings rates in the world, 38%. Ireland has a savings rate that quadrupled after getting hammered by their government and bank losses of 2007; their savings rate has now calmed down to 7.3%. Each country has its own tax structure, safety net, and economic memories that combine for a savings rate. The savings rate in the U.S. today is 4%, down from 5.5% during the financial crisis a few years ago.
What is the lesson? Do you want to wait until after you lose your job to consider saving more money or do you want some savings in a secure location before there is a problem? The ancient money adage to save 10% is a fine starting point, but have you mapped out all of your savings needs to know if this number is adequate for you? Retirement needs? The sooner you do this the more stable your financial future will become.