Teutonic Frugality

Why Germans Love to Save

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Germans love to save.
  • Why it matters

    Why it matters

    Despite “negative interest rates,” Germans will continue to save. But the urge to save money hasn’t always been typical of German society. In fact, it only became established after the Reformation and the Thirty Years War.

  • Facts


    • Saving in Germany has become part of a deep-rooted, collective mentality.
    • The Pietist theologian August Hermann Francke exorcized the last traces of joie de vivre from German Protestantism around 1700.
    • Finance minister, Wolfgang Schäuble, recently announced the first federal budget in 45 years that will avoid new debt.
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Two years ago, when I first heard that banks might no longer pay interest on savings accounts, but in fact would collect a portion of the deposited money as “negative interest,” my first thought was: This will trigger a revolution.

It immediately made sense to me that the attempt to hide the erosion of money beneath the term “negative interest rate” isn’t such a bad idea. After all, policymakers have noticed in recent years that it brings calm to the collective consciousness when there is talk of “negative growth” in the economy, even though what this actually means is that the economy is shrinking; when our soldiers are not sent to fight in wars, but on “armed foreign missions”; or when public broadcasters do not collect compulsory license fees but “household contributions.” But I would not believe that, when it comes to their savings, my dear fellow Germans would be so naïve as to be fooled by reassuring PR talk.

I now believe that we will have “negative interest rates” – and that the Germans will not take to the streets. In fact, they will continue to squirrel away their money. They will keep saving, even if it’s no longer profitable to do so. The urge to save is more than an economic calculation. It is part of a deep-seated, collective mentality.

A few weeks ago in Berlin, our finance minister, Wolfgang Schäuble, proudly presented the first federal budget in 45 years that will avoid new debt. Here in Germany, the news was overwhelmingly greeted as a message of success.

In previous eras, however – from the Germanic Middle Ages to the early Modern era, Germans were famous for their excessive drunkenness, rowdiness, exuberant joie de vivre and general self-indulgence.

Throughout the entire 18th century, the ethics and morals of the day consistently preached the same triad: order, diligence and thrift.

Even the man who marked this country like no other, the reformer Martin Luther, was far from the incorporation of the thrifty, diligent German.

Following the upheavals of the reformation, the Thirty Years War ravaged much of Germany during the mid-17th century, and left people deeply shaken and fearful of the future. This chaotic, bloody time, lay the foundation for those virtues that would come to define the German mentality.

Then around 1700, the city of Halle became the intellectual and educational center of a new German hope that the world could be made into a better place through order, diligence and frugality. The pioneer of this new movement was August Hermann Francke, a German Lutheran clergyman and one of the fathers of Pietism. He exorcized from German Protestantism the last traces of joie de vivre, which it had still possessed in the days of Martin Luther.

Francke once stormed out of a dinner in the imperial city of Schwäbisch-Hall, to which the city council and ministry had invited him, because he felt that the meal was too lavish.

In 1713, King Friedrich Wilhelm I inherited a ramshackle budget from his father, who had transformed Berlin from a provincial town into a Baroque capital.

The austere son denounced his father as a spendthrift and lived in virtually middle-class modesty, but he also successfully repaired the government’s finances. He is said to have occasionally dismounted his horse to give an idle citizen a taste of the royal riding crop.

But Prussia wasn’t the only place where the Germans were being disciplined. Throughout the entire 18th century, the ethics and morals of the day consistently preached the same triad: order, diligence and thrift.

In 1761, long before the establishment of the first democracy on German soil, Saxon economist Heinrich Gottlob von Justi wrote: “It is in keeping with the essence of democracy that the hearts of citizens are filled with a love of equality; and because this equality could not come about if citizens ruined themselves through extravagance and waste, the virtue of frugality is necessary in most democracies.”


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In 1788, Rudolph Zacharias Becker, a popular writer in the Thuringia region, wrote in his “Little Book of Needful Help”: “Buy not what you need, but only what you cannot do without!” and “Do not base your spending on your income, but on need alone! If I am sated and I have clothing for the day and a bed for the night, what more do I need? Pastries are no more nutritious than plain cooking. A silk tunic is no warmer than one made of wool, and he who is weary sleeps as soundly on a straw sack as on down feathers.”

But didn’t the Nazi era reveal, in the grisliest of ways, what a fatal mistake our ancestors made when they believed that order, diligence and thrift (alone) were the guarantors of a better world?

And haven’t we Germans, ever since we acknowledged this mistake, transformed ourselves from a nation of disciplined workers who diligently make provisions for the winter into a merry country of backyard barbecues, in which we can enjoy the finer things in life to our hearts’ content?

Nowadays, King Friedrich Wilhelm I would never mount his horse again, given the armies of people who sit cheerfully in the sun on workdays, in freezing temperatures, sipping their latte macchiato. He would be spending too much time dismounting and brandishing his whip.

Germans from all regions and income levels go into raptures over the terrific “price-performance ratio” at Aldi and other discount supermarkets.

And even though Germans have recently become willing to spend more money on food than absolutely necessary, it is not in delicatessens but in organic supermarkets.

We Germans are world champions when it comes to saving electricity, water and gasoline. The structural German conservatism is even more vividly expressed in the field of the environment and in “saving the climate” than in our fondness for saving money.

Those who save their money believe in the future. At the same time, they do not believe that this future will be better and more prosperous than the present, thanks to human creativity and productivity, but that our quality of life will diminish because of the finite nature of resources.

The truth is that important advances in environmental protection in recent decades were not achieved through self-restraint on the part of consumers, but through technological innovation. For instance, the invention of the catalytic converter has done more for air quality in German cities than appeals to reduce car use.

The faces of Americans light up when they say: “nothing is impossible.” A satisfied smile appears on the faces of Germans when they talk about the limits of growth.

I can think of only two-and-a-half eras in which Germans were overcome by a surge of Anglo-Saxon innovativeness and a yen for investment: in the so-called Gründerzeit period, immediately following the first unification of German states in 1871, an age of rapid industrialization in Germany; after the country’s complete collapse following World War II; and after the fall of the Berlin Wall in 1989.

Our current age resembles none of these eras.

It is little wonder then, that in the wake of the various financial and economic bubbles that burst at the beginning of the millennium, the Germans are now withdrawing once again into their economic bunkers.


This is an abridged version of a piece by Thea Dorn, one of the most successful German authors in recent years. Her latest book, co-written with Richard Wagner, is “Die deutsche Seele” (The German Soul), published by Knaus – a cultural history of the Germans in 30 chapters. To contact the author: gastautor@handelsblatt.com.

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