Greater China’s Young Lives Paycheck to Paycheck

Eric Hsu recalls a time when he was 10 days away from payday and only had $32 left. He had no savings.

“I used the leftover money to buy loaves of white bread and ate it for all three meals until my paycheck came in,” he told CNBC Make It.

“Sometimes I thought I didn’t earn little, I actually thought I earned an upper middle income salary. But I still feel very poor every month.”

Hsu belongs to a group of people in Taiwan, usually young and single workers, called the “yue guang zu” – the so-called “moonlight clan”.

The term describes being broke at the end of each month, or as Hsu describes it, “Money goes in my left hand and goes out my right.”

The term originated in Taiwan but is now frequently used in mainland China and Hong Kong to describe the younger generation, said Chung Chi Nien, a chair professor at Hong Kong Polytechnic University.

A estimated at 40% of young single people who live in Beijing, Shanghai, Guangzhou and Shenzhen are living paycheck to paycheck, according to a local report.

“This behavior is very different from that of their parents, who literally saved every penny they have. But the younger generation is spending every penny they have,” said Chung, an economic sociologist.

The rising cost of living has put more people at risk of becoming part of the “moonlight clan”, especially those with low incomes, Chung said.

While Taiwan’s inflation rate of 2.4% is well below that of many parts of the world, consumer prices and food prices are still on the rise.

For A-Jin, 34, fixed expenses like insurance, utilities and transportation already make up “more than half” of his salary of 30,000 New Taiwan dollars (about $985) a month, he said. she told CNBC Make It.

“I would be left with NT$10,000 a month for food and other expenses. Eating at restaurants now costs about NT$300 a day. There is no way to save,” said A-Jin, who works in the service industry.

“If an emergency happened to me, like a car accident, I wouldn’t have the money to deal with it.”

But for others, it’s the “you only live once” mentality that encourages them to spend what they can, even if it means going into debt.

Since Hsu started working 10 years ago, the civil engineer has struggled to accumulate savings as he tried to pay off his student debts.

“Instead of saving the money I had left at the end of the month, I decided to pay off my debts instead,” according to CNBC’s translation of his Mandarin comments.

But when a serious knee injury left him out of work for two weeks without pay, Hsu found he was unable to support himself.

“I thought, since I can use a credit card to pay for things and make my life easier, why not?”

But before he knew it, he had up to four credit cards and almost 70% of his monthly salary went to paying off those debts, leaving him little to save.

Hsu acknowledged that while half of his debt was for necessary daily expenses, the other half was due to his “lifestyle choices and desires”.

“I let it get out of control and I was like, ‘Since I have a credit card, let’s buy a car while I have it,'” Hsu, 38, said.

“With shopping online you are also exposed to a plethora of things you can buy and the fact that you can shop so easily hasn’t helped.”

The concept of “moonlight clan” reflects the disillusionment that young people feel about life these days, said Chung, the professor. It is as have other terms that have gained popularity in China over the past couple of years, such as “tang ping” and “bai lan”.

According to UN-Habitathousing is considered affordable when the house price to income ratio is 3.0 or less.

In comparison, Taiwan the current ratio is 9.6 and 15.7 in Taipei Cityaccording to his interior ministry.

“The hope of buying your own house, getting married and starting your own family is now far too far to be achieved,” Chung said.

“Young people prefer to give up that dream and spend money on things they are guaranteed to get today.”

These things are called “xiao que xin” – which means “small happiness, but very certain” in Mandarin.

“It could be anything from buying a cup of coffee at Starbucks to taking a trip abroad – things that will give you a small sense of happiness to make up for the loss of an overall goal in life. life,” Chung told CNBC Make It.

Hsu agreed, sharing a common saying in Taiwan that describes the current situation: “Houses are not for living, but for investing.”

“A three-bedroom apartment now costs NT$20 million. How much time do I have to save with my annual salary of NT$720,000?”

“You would really only want to do something if you have a strong goal. Without the ability to buy a house, it’s like, ‘There’s no point in making money if you don’t spend it'” , he added.

A-Jin said she has no long-term financial or life goals and has “completely given up” on buying her own home.

“As long as I have food to eat and my stomach can be full, I won’t die. That’s enough for me,” she said.

“Since everything else is impossible, I’m just thinking about how I can be kinder to myself, that’s all.”

For Hsu, he considers the toughest days to be behind him. After his experience, he canceled his credit cards two years ago and pledged to save a third of his salary each month.

However, he still considers himself part of the “Moonlight Clan” as he still doesn’t know if he would survive another emergency.

“I still don’t have any long-term financial goals… My priority is to clear the rest of my credit card debt. I’m only driven by the fear of being hungry again,” said- he declared.

“Not knowing if you have enough money to eat until next payday was a very scary state, but it was my fault and the punishment fits the crime.”

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