3 Differences in Attitudes to Financial Matters

Historical and other reasons for the differences in attitude to money matters

For Russian-speaking people, attitudes towards money are deeply influenced by historical factors and differ significantly from Western perspectives. When reading about Russian culture, one might encounter references to Russian sayings and idioms such as “Money doesn’t bring happiness” (не в деньгах счастье) or “Money is like water: they come and go and we don’t see them” (Деньги — что вода: пришли и ушли, только и видели), which demonstrate that money holds less importance for Russian people. Often, these sayings can be taken literally – that people prioritize other things over money – which, to some extent, holds true. While people from Russian-speaking cultures are as money-driven as many other people in the world, they often place greater value on factors beyond money, which can surprise foreigners with what might seem like irrational or illogical decisions.

In Russian culture, personal connections often hold greater importance than money. For instance, if a person asks their best friend for financial help, the decision will be based on loyalty to their friend rather than on financial considerations, as might be typical in American culture. Americans are likely to assess their financial situation before responding. Russians, on the other hand, are more inclined to say “yes” to their best friend simply because their friend is in need. Similarly, individuals from Russian-speaking cultures might turn down a higher-paying job offer to remain loyal to a company where they formed close relationships with their colleagues. In the United States, however, people tend to weigh financial aspects against other considerations, often valuing a higher salary as taking precedence, despite any sentimental attachments to a previous team. Another example of different attitudes to money matters concerns the comfort levels with which creative artists price their works. While in the United States it would be logical for creative artists to set a high price on their works in an attempt to make good money, artists in the Russian-speaking world tend to be almost ashamed to connect art with the desire to make money. While they certainly aim to earn money, they are reluctant to openly admit it and frequently undervalue their work or skills.

The reasons for these differences in attitudes towards money, especially the fact that Russians might not prioritize financial aspects when weighed against other categories, stem from both the collectivist nature of its national character and a historical context that prioritized survival over prosperity. Historically, we can point to two reasons for the differences in attitudes towards money compared to the Western mindset. Peasants, who constituted the largest class until Soviet times, also endured centuries of poverty. Feudal society and serfdom (abolished much later than in Europe, in 1861) provided few opportunities for entrepreneurial development. Heavy taxation and the inability to leave the land forced peasants to work for survival rather than wealth accumulation and investing in the future. To keep dissent low, the church – closely aligned with supporting monarchies and landowners’ interests – preached for centuries that money was not important. When Soviet rule replaced monarchy in 1917, economic challenges, radical social changes, and civil war made the poverty even worse of majority of people, but socialist ideology further discouraged the emphasis on materialistic values. The insignificance of money became a cornerstone of socialist ideology, shaping people’s mindsets for seven decades.

Differences in the concept of saving for the future

Centuries of imposed disregard for wealth, frequent wars and terror waves of the Russian Empire, as well as the state-dominated system of the Soviet Union that rose and fell during the 20th century created a mindset marked by a strong sense of futility about saving for the future. Spending primarily focused on fulfilling basic needs for food and shelter became habitual, while saving for the future or investing in improvements became increasingly uncommon.  It should be mentioned that the post-Stalin period of Soviet life saw more stable economic times, and the 1960s and 1970s are often remembered as the “good times” by older generations. This period marked slow economic stagnation with the availability of everyday necessities but a scarcity of luxury items. Coupled with the lack of large-scale military operations, life seemed normal to Soviet people who had just survived the terrible consequences of the Great Patriotic War and Stalin’s rapid country restoration – at the expense of people’s health and livelihoods. Complete isolation from Western influence and information prevented people from realizing that their normality was far behind the comfort of Western life. Still, the lack of comparison and the satisfaction of basic needs made people more inclined to think about the future. During this time, it became possible for people to put money aside for future purchases of such items as refrigerators, furniture, and cars.

Centuries of economic and political instability have ingrained in Russian culture the belief that money and wealth are futile, dependent more on political circumstances than individual effort.  Focused primarily on survival spending, Russians and other Russian-speaking people generally do not prioritize saving money in terms of building life savings or making investments. The concept of saving as an investment for the future is less common, largely due to a historical context that has made long-term financial planning seem unreliable. Nevertheless, they are keen on saving money in everyday situations, such as finding cheaper alternatives when shopping, reusing items, keeping things “just in case,” and limiting non-essential spending.

Interestingly, people from post-Soviet countries are sometimes seen by foreigners as impulsive and extravagant spenders, which may seem contradictory to the above. However, this behavior is also a consequence of the fatalistic “seize the moment” outlook on life that is based on the unpredictability of the future. This outlook on life explains the post-Soviet people’s preference to occasionally spend money on memorable experiences or luxury items over practical necessities. A common example illustrating this attitude is the stereotype of Russian students eating ramen while owning iPhones – a reflection of a cultural tendency to prioritize immediate enjoyment and status luxuries over improving everyday living conditions. The “you only live once” mindset is a significant part of the Russian national character and shapes the approach to money and spending amidst the uncertainty of the future. 

The changes in attitudes to money since perestroika

The Perestroika of the 1980s was a necessary step to lift the country out of spiraling stagnation. The need for it for obvious to country leadership and specialists, but not always by the general population. Many people could not fully comprehend the extent of the Soviet Union’s financial troubles at the time, fueled by persistent Soviet propaganda contrasting the prosperity of Soviet citizens with the “decaying West”. Perestroika, which began in 1985 as a set of economic reforms to introduce elements of the market economy into the state-controlled Soviet system, could not succeed without Western financial assistance. This Western help came with conditions demanding a more transparent political system reflecting Western values. Thus, glasnost became an integral part of perestroika bringing more freedoms to heavily regulated Soviet life.

The onset of glasnost, coupled with changes in Soviet economics, sparked a chain reaction eventually leading to the dissolution of the Soviet Union. Modern Russia and 14 sovereign countries began their existence in 1991; what used to be domestic policy became foreign policy for these countries overnight, logistical ties were broken, and countries were plunged into the “wild 90s”—a turbulent period marked by significant social, political, and economic chaos. Towards the end of the 1990s, as life normalized and people began saving money again under a capitalist economic system, Russia was hit hard by the 1998 global crisis: it defaulted on its debt, leading to a severe economic crisis with rampant inflation devaluing all savings.

Since 2000, living standards in Russia and other post-Soviet countries have steadily improved, becoming comparable to Western lifestyles for at least a portion of the population. However, political turbulence continued, strengthening autocratic regimes in some of these countries. The Russia-Georgia war, conflicts between Armenia and Azerbaijan, Russia’s annexation of Crimea, and the Donbass war, along with political tensions, have disrupted the lives of people over the past two decades. The war initiated by Putin’s Russia against Ukraine in 2022 marked a new era for the region, with unpredictable and extremely negative economic hardships foreseeable for all involved.

Views on achieving success and getting something for free

Another consequence of Russia’s troubled economic history is the lack of faith in something the Western world – especially Americans – strongly endorses: the idea that anyone, regardless of their background, can achieve success and upward social mobility through hard work, determination, and initiative. The “American Dream” is centered on the idea of pursuing goals and aspirations through personal effort. American history and administrative setup have always supported the notion of the United States being a land of opportunities where personal effort and ambition can lead to prosperity and fulfillment. As you can see from the information above, this historical path differs significantly from that of people in the former Soviet countries.

The lack of support for personal success through hard work and determination, coupled with the survivalist mindset amidst the scarcity of goods, has led to the Russian appreciation of “халява” (‘khaliava’). This term, denoting something obtained effortlessly and without cost, is a deeply ingrained aspect of the national character. This love for freebies is universal, but in Russian or similar cultures, the love for khaliava is not merely about material gain but is intertwined with fatalism: such windfalls come unexpectedly, almost as pleasant surprises. This notion is reflected in Slavic folklore through elements like the “self-setting tablecloth,” where food appears magically, or the legendary goldfish that grants wishes. Since historically this preference for freebies has been amplified by the socio-economic reality that building wealth from scratch was often seen as unrealistic, the love for khaliava encapsulates a unique blend of cultural fatalism and practical response to historical economic uncertainties.

Love for freebies is associated with a willingness to take risks. Periods of economic instability and scarcity have ingrained in people the habit of seeking opportunities to get something for free or at a lower price, and such opportunities are often tied to a degree of risk. However, economic necessity makes these risks justifiable. The greater the instability of the economic situation, the more people are willing to take risks to compensate for the lack of control over their life circumstances. Practically, people seeking freebies become prone to participating in questionable promotions and lotteries and often fall victim to fraud.

Investments into children’s education

Finally, another notable difference between the cultures lies in the investment in children’s education. Surprisingly, the reasons are similar to those mentioned above, even if they might seem illogical at first: the lack of faith in self-made success and a survivalist mindset when it comes to money. While there is a lack of planning for the future, Russian-speaking people in general have high hopes for the future, particularly for their children. In Soviet times, the idea of the “bright communist future” was commonly used in propaganda to describe the envisioned future society under communism. It promised a utopian vision where all societal problems would be solved, leading to prosperity, equality, and happiness for all citizens. But even beyond the effect of Soviet propaganda, the constant struggle through political and economic hardships instilled people with a belief that their efforts were not in vain, even if only their children might reap a better future. Soviet times also placed a major emphasis on the importance of education: high literacy rates and widespread college education became themes of national pride for a long time. The Soviet educational system placed a strong focus on rigorous academic standards, particularly in sciences and mathematics; jobs connected with hard sciences, engineering, and medicine were sought-after professions for the Soviet people. Despite personal success during Soviet times being strongly influenced by political factors, receiving a good education was widely seen as an opportunity to secure a good job and social standing. This legacy continues to influence Russian-speaking families, who often view education as a critical investment in their children’s future.

American families also invest in their children’s future, but the approach and level of investment can vary widely. The American education system often emphasizes well-rounded education, encouraging participation in a broad range of activities. However, the degree of investment in supplementary education may not be as intensive or uniformly prioritized as in Russian-speaking communities. American families may show relatively higher investment in sports, reflecting the cultural importance of athletics in the U.S. While Russian-speaking families often emphasize educational activities, such as supplementary tutoring and music education, reflecting their cultural emphasis on academic achievement and classical education. Depending on their means, a child of Russian-speaking immigrants is likely to have math or programming tutors, take piano or violin lessons, and – depending on gender – participate in either ballet or competitive sports. Russian-speaking parents tend to invest money only in extracurricular activities that help their children excel in core subjects, traditional music and dance, and traditional competitive sports – aiming to develop marketable skills so that their children can rely on these skills as tutors, coaches, etc., in case of worst-case scenarios in the future. This rationale also reflects the survival mindset of Russian-speaking people, who push their children toward choices that improve job security rather than developing other interests.

In summary, Russian-speaking people exhibit attitudes towards money that are rooted in a history of economic hardship and a survival-oriented mindset, leading to a disbelief in investment, wealth accumulation through hard work, and reliance on personal connections in financial matters. In contrast, the American mindset, shaped by a history of supported entrepreneurial efforts and the belief in the American Dream, emphasizes long-term financial planning, personal success, and wealth accumulation through hard work and strategic investments.