5 Proven Chinese Saving Secrets to Build Wealth and Boost Your Finances

The Chinese Secret to Saving Money: Easy Tips to Boost Your Savings

In today’s world, it can feel like everyone is focused on spending rather than saving. Yet, the Chinese are known for their excellent money-saving skills. Their household savings rate is one of the highest globally, averaging 45.9% between 1952 and 2021. But how do they do it? Let’s explore some of their best saving strategies and how you can use them to grow your own savings.

1. Avoid Spending Too Much on Luxury Items

One major reason Chinese people save so well is their smart approach to buying luxury goods. Instead of spending big on expensive items like designer bags or flashy cars, many prefer to save that money or invest it in something useful.

For example, if you’re tempted to buy a $1,000 smartphone when your current one works just fine, ask yourself:

Do I need this, or do I just want it?

Can I afford it without impacting my savings?

Let’s say you earn $5,000 a month. Instead of spending $1,000 on a new phone, you could invest that money or save it for emergencies. Even if you occasionally treat yourself, the goal is to avoid reckless spending driven by trends or social pressure.

Pro Tip: Before making a big purchase, take a moment to reflect. Can it wait? Is there a cheaper alternative?

2. Follow the “10-to-1 Rule”

This simple rule says: for every $10 you earn, save $9 and spend only $1. It might sound tough, but it’s a powerful way to grow your savings fast.

Let’s break it down:

If you earn $2,000 a month, aim to save $1,800 and limit your spending to $200.

If saving 90% feels impossible, start smaller. Save 50% ($1,000) or even 30% ($600).

The key is to save more than you spend. For example, if you can stick to a ratio like saving $7 for every $3 you spend, you’re already on the right path.

Why It Works: This method helps you build a habit of saving. Even small savings add up over time and create a financial safety net for emergencies or future investments.

3. Invest in Real Estate

In China, real estate is a popular way to grow wealth. People see buying a home or property as a smart investment because it can increase in value over time.

Here’s an example:

Suppose you save $30,000 over a few years. Instead of letting that money sit idle, you use it as a down payment on a property worth $150,000. Over time, if the property value grows to $200,000, your investment has earned you $50,000.

Why is real estate so important? In Chinese culture, owning a home is seen as a sign of success and security. Plus, it’s a safer investment compared to stocks or other options that can be more unpredictable.

If you’re thinking about buying property, do your research and consider:

Can you afford the down payment and monthly costs?

Is the location likely to grow in value?

4. Rely on Family Support

Family plays a big role in saving money in China. Parents often help their kids with big expenses, like education or buying a house. In return, kids might help their parents financially when they’re older.

For example:

If a young adult earns $3,000 a month, they might save $1,000 by living with their parents instead of renting an apartment. This shared living arrangement cuts costs for everyone in the household.

Families might pool resources to buy a home or support a family member starting a business.

Even if you don’t live with family, you can still use this idea by sharing costs with roommates or collaborating on expenses with friends.

Tip: Talk to your family about ways to share financial responsibilities. It could help everyone save more money.

5. Focus on Financial Education

The Chinese place a high value on education, and this extends to learning about money. Kids are taught how to manage money early on, often starting with small lessons. For example, during the Lunar New Year, children receive red envelopes with money, and parents encourage them to save it instead of spending it all.

Here’s how financial literacy helps:

Let’s say you save $200 a month and invest it in a low-risk mutual fund that earns 5% annually. After 10 years, you’ll have saved $24,000—and earned an extra $7,764 in interest.

Many schools in China now include money management in their lessons, teaching kids about budgeting, saving, and investing. Adults also stay informed by using online tools, attending workshops, or learning from apps that offer budgeting tips.

Start Small: Use apps like Mint or YNAB (You Need a Budget) to track your spending and find areas to save.

Key Takeaways

The Chinese saving strategies might be rooted in their culture, but anyone can use these methods to save more and spend smarter:

Spend Wisely: Avoid buying things you don’t really need, especially expensive items.

Follow a Savings Rule: Aim to save a big chunk of your income, like 50% or more.

Invest in Your Future: Consider real estate or other long-term investments.

Share Costs: Work with family or friends to reduce expenses.

Learn About Money: Keep improving your financial knowledge.