Financial Advisor Shares 4 Chinese Money Principles That Can Help You Boost Your Savings

Humphrey Yang is a former Financial Advisor and YouTuber with an estimated net worth of $2 million. Yang profits from his nine passive sources of income, including his Patreon page, real estate, content writing, stocks, Turo car rentals, digital marketing, and cryptocurrency staking.

As a finance influencer, Yang predominantly uses his TikTok platform, which boasts around 3.3 million followers, and his YouTube channel, home to over 1.2 million subscribers, to educate his audience on money management and financial literacy.

Yang, who is of Chinese descent, discusses four Chinese money saving principles in one of his videos. He even says that Chinese people are "so good at saving money" because of cultural differences (compared to Americans), including a lack of discounts and payment loans to avoid debts.

As of December 2021, according to CEIC Data, China's Gross Savings Rate was measured at 45.9 per cent – equal to more than $45 for every $100. As of December 2022, CEIC Data also reported that the Gross Savings Rate in the US, where consumer culture dominates society, was measured at just 17.8 per cent.

"Money is so important" in China, the financial advisor added, noting that the phrase "I hope you get rich" is used as a greeting during Chinese New Year. The four money principles discussed in his video are:

Not Purchasing Luxury Items

According to the financial influencer, Chinese nationals are renowned for "wanting to stay humble" and avoiding consumerism. This may be easily disputed by recent studies that show that by 2030, 40% of luxury goods consumers will be Chinese - however, it is a principle that dates back to farther than the last two decade's of the country's spending habits.

For more senior Chinese citizens, thrifting and clinging onto conservative spending habits are instilled as a result of growing up during period's of the countries economic hardships in the 1950's to 1970's. Under the Cultural Revolution and Great Famine, government policies discouraged consumption - policies that are now being reversed to accommodate the younger generations born during the boom of iPhones and luxury brands.

The Number 10 Rule

Yang noted that Chinese nationals are known for "living off a very small percentage of their income," explaining: "My dad grew up with very little money as a child in Shanghai. Some days, he couldn't even afford food and would go to sleep hungry. When he could afford food, all he could buy at the time was a plain pastry called a 'mantou' – a tasteless white bun you could buy very cheaply. Because of this tough childhood, when my dad started his career, whenever he earned $10, he tried to live off of one dollar."

While living below your means is a popular way to save money, the financial advisor warned that this behaviour could lead to spending fears as it creates a "scarcity mindset about money."

Prioritising Needs Over Wants

To save money, people need to be "reasonable" with themselves, Yang advised. "Spending money is inevitable, and everyone will have to spend money at some point, but the lesson here is to be reasonable and frugal with most of your decisions... You can still buy something that you want, but make sure you will get really good value out of that."

On the other hand, in the pursuit of "living life," research shows that Americans are willing to take on debt for "the sake of fun this year". 27 per cent say they're willing to go into debt for travel, 14 per cent to dine out and 13 per cent to attend live events or performances.

Not Dining Out

Official figures published by Gitnux show that a staggering 34 per cent of American nationals eat out at least once a week, with around 20 per cent of their total food budget being spent on food away from their home.

Research also shows that the average US household spends roughly $3,000 on dining out yearly. In China, Yang said that eating out is saved for "special occasions", as families often prioritise having group dinners with friends and extended family members at their homes instead.