Post-pandemic revenge spending is still very much alive, almost three years after the world opened up again.  But in one part of the globe, young adults are embracing the reverse trend – revenge saving.

Instead of shopping online, China’s youth are using the internet to share their ambitious saving goals and rally one another to live well below their means.

“Blame” it on unemployment and slow growth

China may be the world’s second-largest economy, but forecasts point to a continued slowdown.  In its May 2024 report, the International Monetary Fund said China’s economy is projected to grow by 5 percent in 2024, and 4.5 percent in 2025.  Inflation, or the cost of living, is also expected to rise.

The unemployment rate among youths aged 16 to 24 is also reported to be at double digits at 14.2 percent, according to published data by China’s National Bureau of Statistics on its website.

So when you have an economy that is expected to contract, prices of commodities going higher, and dim employment prospects, China’s youth growing their savings is a step in the right direction.  

No to “Dopamine Economy”

One emerging personal finance trend with China’s young adults is saying no to the "Dopamine Economy", which means buying things that make you feel good right away. You are considered part of the "Dopamine Economy" if you’ve made impulsive purchases, such as the latest tech gadgets or designer items that you didn’t really need, but wanted for yourself or to show off.  The growing influence of social media has seen many consumers falling for instant gratification, even if it means going into debt.

Yes to “Reverse Consumption”

As an answer to the "Dopamine Economy", China’s youth are embracing mindful spending or “Reverse Consumption”.  With this trend, followers say no to unnecessary spending, and go to great lengths to be more frugal.  One example is eating at community canteens where fresh meals are cheap because these are targeted for older people.

With “Reverse Consumption”, every expense is reviewed, always looking where to cut back, and excessive purchases are avoided.  Related to this is the buzzword “stingy economy”, where Chinese consumers hunt for discounts and the best deals when shopping.

Setting targets is key

Based on the latest report of the People’s Bank of China, China’s youth may be making impressive saving progress.  Total RMB deposits by households in the first quarter of 2024 saw an 11.8 percent increase year-on-year, according to the China Monetary Policy Report released in May 2024.

Their savings successes are likely driven by setting monthly targets or budgets and sticking to them.  One popular trend is "Saving Gold Beans" which promotes small-scale investments in gold as a means of preserving wealth over the long term.

No “saver” is an island

One strategy that also seems to work for Chinese savers is having “savings partners” or even being part of a “savings circle”.  They can come from your circle of family and friends, or from social media. Whether you have one or a whole circle, your savings buddies can help keep you on the right track, ensuring both or all of you stick with your goals. This also means you have a network that is actively looking for ways to save and can share money wisdom.

You don’t have to live in China and face slow economic growth, higher inflation, and double-digit unemployment rates before you make a commitment to grow your savings. Having extra cash that grows over time is always a good idea.  It’s time to move away from financial indulgence and adopt greater financial prudence.  Your future self (and even family and friends) will thank you.