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The Chinese Secret to Saving Money Revealed

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

In the video titled “The Chinese Secret to Saving Money Revealed” by Humphrey Yang, the presenter delves into the intriguing subject of why the Chinese are so proficient at saving money. With a gross savings rate of 45.9% in China compared to 3.5-5% in the United States, the disparity is significant. This article will explore the cultural, demographic, and practical reasons behind this phenomenon, and reveal the Chinese secret to saving money.

Cultural Influence

Emphasis on Saving

  • Cultural Values: Chinese culture emphasizes saving money and views it as honorable.
  • Avoidance of Luxury: Unlike Western consumerism, Chinese often avoid indulging in luxury goods or status symbols.
  • Lucky Money: Children are taught to save money from a young age, often receiving “lucky money” in red envelopes during New Year’s and birthdays.
  • Success and Wealth: Success and wealth are highly regarded in Chinese society, often linked to social status.

Impact of History

  • Post-World War II America: In contrast, American culture encouraged consumption after World War II, leading to a focus on spending rather than saving.
  • Aversion to Financing: Chinese people often prefer to buy things in full cash, avoiding financing and debt.


One-Child Policy

  • Impact on Population: China’s one-child policy led to a decline in newborns and skewed the population towards more males.
  • Supply and Demand: More men chasing the same number of women led to a need to stand out through success and wealth.
  • Savings for Desirability: Men saved money to become desirable, and families saved more due to having fewer children.

Lack of Retirement Accounts

  • Pension System: China lacks 401K or IRA options, relying on a pension system that many are wary of.
  • Concerns about Future: Concerns about healthcare, education, and pensions lead to increased saving.

The Chinese Money-Saving Secret

Zero-Based Budgeting System

  • Accounting for Every Dollar: The secret lies in the zero-based budgeting system, where every dollar is accounted for, and income minus expenses equals zero at the end of the month.
  • Understanding Expenses: This system helps in understanding and categorizing expenses, allowing for better control over spending.

Four Main Factors

  1. Avoiding Luxury Goods: Staying humble and avoiding status symbols.
  2. Living Off a Small Percentage: Trying to live off as little of the income as possible.
  3. Focusing on Needs vs. Wants: Spending on needs, especially health-related, and being reasonable with wants.
  4. Eating at Home: Advising to eat at home to save money.


The Chinese approach to saving money is rooted in cultural values, historical context, and practical wisdom. From understanding the importance of money to employing a zero-based budgeting system, the Chinese have developed a comprehensive strategy to manage their finances effectively. The lessons drawn from this approach are universal and can inspire individuals worldwide to adopt more frugal and thoughtful spending habits. As the Chinese would say during New Year’s, “Gong Xi Fa Cai,” which means “I hope you get rich.” The wisdom shared in this video offers valuable insights into achieving financial success through disciplined saving and spending.

Note: The article is based on the video by Humphrey Yang and includes insights, statistics, and cultural observations shared in the video. The video can be viewed here.

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