Frugal living – the “recessionistas” in China

Can you be hip and frugal? That’s the challenge many people are taking up in the United States. Cutting out subscriptions, movie tickets, eating out, and other discretionary purchases, while learning new ways to cook with cheap ingredients at home and how to reuse old stuff (see the recent explosion in blogs on living cheaply and surviving job losses).

In February I heard about students and young professionals in China who try to live on ¥100 yuan a week, which is about $15 (really more like $30-50 when factoring in the higher purchasing power of yuan or dollars in China). The ¥100 challenge excludes housing costs.

I thought I lived cheaply until I heard of the ways people spend a good part of ¥100 to buy food in bulk and trying to eat that for a week, while doing away with all but the most essential public transportation and entertainment expenses. It’s kind of old news, but I just came across an article about this trend in an British paper.

It’s not easy to do. Even though I live pretty cheaply and keep track of every yuan I spend, I don’t even come close to ¥100 a week (my target is ¥50 a day or about ¥1,500 over a month). Excluding housing, my most frugal month was November 2007, when I spent only ¥905, which comes out to around ¥210 a week (and I had free housing, so that’s all I spent). Last month I spent ¥1,546, or about 3½ times the ¥100 a week challenge. My most expensive month was August 2008 (¥3,969), when I bought Olympics tickets, train tickets, a cycling kit, a big suitcase, and went out a few times in Beijing. My average monthly expenses over the last 19 months, which includes virtually everything - food, transportation, entertainment, phone, Chinese health insurance - but excludes the rent and tuition I’ve paid in Beijing and Nanjing, has been about ¥2,000 (just under $300).

It’s nice to be young and single (no family to support) and living in a country with such a low cost of living. Life will never be this cheap again!

And if you don’t keep a detailed personal budget, you should start one today. It’s enlightening to see clearly what you do actually spend in a month or a week, then to plan ahead, set goals, and try to see how much self control you can muster to reach your spending/saving goals. It’s actually fun.