National savings is the aggregate of a country’s household savings, corporate savings, and government savings. Analyzing household savings provides valuable insights into the saving behaviors of ordinary households. The term "household savings" refers to the remaining balance of a household’s disposable income after deducting the final consumption expenditure. The ratio of household savings to disposable income is known as the "household savings rate".

The graph above illustrates household savings in Taiwan. Over the past twelve years, the average household savings rate was 22%, with an average savings amount of roughly NT$220,000. The average savings rate was derived from a nationwide analysis of millions of households. Generally, wealthier households with higher incomes tend to have higher savings rates, while economically disadvantaged households may struggle to accumulate any savings at all. During 2020 and 2021, the household savings rate in Taiwan reached a 12-year high at 24.5% and 25.2% respectively. This increase can be attributed to the impact of the COVID-19 pandemic, which prompted people to cut down on travel, leisure activities, shopping, and other expenditures. The graph also demonstrates a similar trend in OECD countries, where household savings rates rose during the pandemic relative to pre-COVID years. In 2021, Switzerland ranked first among OECD with a household savings rate of 21.9%, followed by Ireland (20.2%), the Netherlands (17.5%), Mexico (16.7%), and Sweden (15.5%). Japan and South Korea had savings rates of 7.8% and 13.8% respectively.

It is important to note that the household savings rate mentioned above differs from the commonly understood concept of savings reflected in a bank passbook. Savings in a passbook represent accumulated wealth and denote a stock quantity. Conversely, household savings are considered a flow quantity, representing the surplus money from disposable income after deducting consumption expenditure within a given year. Household savings play a major role in capital investment and serve as a key driver of long-term economic growth in Taiwan. However, an excessively high savings rate may not be conducive to economic growth. If everyone saves without spending, it can lead to insufficient domestic consumption, hindering overall economic growth.

Household savings not only enable families to accumulate wealth. They also provide a safety net in the case of an unforeseen circumstance. A life without saving may jeopardize one's ability to lead a carefree life.