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ButYoutuber Humphrey Yangpoints to a shocking savings disparity in China, whose average savings rate is 45.9%.
Why do Chinese workers save at more than ten times the rate that Americans do?
More importantly, how do they do it, andhow can you boost your savings rate?
First, the typical Chinese consumer doesnt indulge in luxury goods.
Rather than flashing status symbols, they want to appear humble to their friends, family, and neighbors.
According to Yang, most want to fly under the radar an understandable impulse in a totalitarian country.
In other words, they aim for a 90% savings rate.
It also lays the foundation for ascarcity mindset, but thats a challenge higher up the socio-economic ladder.
Third, Yang observes that most Chinese people focus on needs over wants.
When they do splurge on wants, they look for the best value over the long term.
In other words, they aim to be frugal rather than cheap.
That alone can save huge sums each month.
On the simplest level, Yang points out that many Chinese consumers have an aversion to financing.
They hate debt and prefer to pay in cash which requires only spendingmoneyyou have already saved.
So, they squirrel away more of their own money to hedge against poverty in retirement.
At a tactical level, most Chinese also follow a zero-based budgeting system.
They track where every yuan goes each month, and prioritize savings as the first expense.
Some cultural and demographic differencesenter the calculus as well.
Yang also notes that Chinese culture views saving money as honorable.
Children given red envelopes with money on New Years or birthdays are encouraged to save much of it.
The culture views wealthier people as successful rather than with theantagonism and angeroften seen in the United States.
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