All around the world, people are struggling to save money. Of course there are a few tips and tricks everyone is familiar with, but a treasure trove of money saving tips are hidden away in other countries.
Countries like Switzerland, which has a lower household income than the US but saves the most money globally, could have the budgeting tips and tricks to put you on track to achieving your own savings goals. Other money saving tips from the Middle East, Asia, and Scandinavia have helped generation after generation pay for new homes, shcools, and unexpected expenses. While these money hacks come from very different cultures, they can apply to almost anyone’s financial situation.
Zero Based Budgeting
For many Americans, its no surprise that Chinese people save more than Americans. But it could be surprising to learn that Chinese people save almost ten times more than Americans thanks to several cultural values and practices.
The focus on saving instead of consumption is deeply embedded in Chinese culture as illustrated by traditions like giving lucky money during the Chinese New Year. So much so in fact, that a common greeting during the holiday is “Gong Xi Fa Cai,” which means “Wish you enlarge your wealth.”
Given how important saving is in this culture and how well they do it, it makes sense to look at the special budgeting system many Chinese people have perfected and use even today.
Zero-based budgeting or ZBB, encourages you to spend your entire monthly income. Still, you need to give every last cent a purpose, with a main focus on prioritizing important financial goals for long-term savings.
This works because when you prioritize important goals, such as paying off debts, a psychological aspect is added to the process of saving money. Paying off your important payments first will remove the heavy burden of debts and bills, making it easier to save money after paying for your necessities.
These necessities include things like rent, bills, and loan payments. What remains is then put into savings plans like a retirement plan or emergency funds, leaving you with nothing at the end of the month.
Zero-based budgeting is useful because it makes you aware of how much money flows in and out of your accounts. If you’re new to managing your finances or have a lot of credit card debt, this method could be especially helpful for preventing you from using credit.
Drawbacks
While zero-based budgeting is one of the most useful money saving tips to practice saving, it does have several drawbacks. For one thing, its very time consuming. You’ll need to closely and consistently monitor your spending to hold yourself accountable for every expense, which can be difficult when you’re juggling a number of other responsibilites too.
Unfortunately, if you are part of the gig economy with unpredictable income then this saving method is almost impossible to implement. Even hourly workers with changing schedules can encounter this disadvantage.
Money Circles
One of the most popular money saving tips across Africa, the Middle East, and Latin America is money circles. While its known by a number of different names like gam’eyat, pandeiros, tanda, hui, or susus, it works the same in practice across all these countries.
Money Circles actually originated in Africa centuries ago. It involves individuals, usually family or friends, who each contribute to a common fund on a regular basis. Then at an agreed upon interval, one member receives a payout equal to the whole fund.
For example, a group of 10 members all agree on the amount, let’s say, $1,000. Then, each member in the group contributes $100 to the pool of funds every month, and one member gets the full $1,000 each time.
The order of payouts is agreed upon between the members before the pooling starts, but they can change the order in case someone has an emergency. This way, by the 10th month, all participants will have received $1,000.
For people who struggle with other money saving tips because they can’t hold themselves to the regimen, money circles could be ber helpful. By forcing you to make the payment each month and being held accountable by a group, money circles solve many of the problems people experience when trying to save money.
If you’re really bad at saving money, then you can ask to be the last person in the circle to receive money. This extends the time you commit to saving and limits the possibility that you will use the payout to splurge if you recieve it too soon. On the other hand, if you need money to start a business or pay off a loan soon, then you can ask to receive the payout first.
Because you don’t need application forms or credit checks to participate in money circles and there are no extra fees or interest, they are very accessible. As long as you have a source of income and a manageable amount of debt, you can use this money savingtip among your friends, family members, and colleagues.
Drawbacks
However, money circles have drawbacks you should consider before starting one with your family and friends. For starters, money circles don’t account for the time value of money since they don’t generate interest. This effectively means that the $1,000 you pay may be more valuable than the $1,000 you receive from the money circle.
They are also risky. Money circles depend solely on how much you trust the other members of the circle, which is why its important you choose individuals who you have a closer personal relationship with.
Most informal money circles aren’t protected by financial authorities. If someone leaves after recieving their payout, not much can be done. So, make sure you trust the other members to make their contributions on time.
Kakeibo
Kakeibo means “household financial ledger” in English, and it’s a budgeting method that was invented in 1904 by Japan’s first female journalist, Hani Motoko. Originally, Hani saw it as a tool for women to gain financial independence and stability, but now it’s used all over the world by both individuals and families.
Like all budgeting methods, Kakeibo is supposed to help you understand your relationship with money by keeping a ledger of all your cash inflows and outflows. However, what sets it apart from other budgeting methods is that it doesn’t involve using any budgeting software, apps, or Excel sheets.
Instead, it emphasizes the importance of physically writing things down, as a meditative way to process and monitor your spending habits. To use Kakeibo, you must write down your income and fixed expenses at the start of each month to determine the amount remaining for discretionary spending.
This amount is then divided into four categories: survival, optional, cultural, and extra. The expenses that fall into the survival category are things like food and transport, while optional includes dining out or hobbies. Cultural things such as books, music, or movies have their own category, leaving the “extra” for unexpected expenses.
The idea behind this system is that you ask yourself questions like, is it necessary? Can it wait? Can I live without it? These questions prompt a more conscious relationship with money, discouraging impulsive spending.
You must also record your spending daily, and at the end of the month, users reflect on their spending behavior and plan for the next month. Writing down things everyday can help increase your awareness about your spending, creating a mindful attitude that can make a significant difference when it comes to your finances. This mindful approach promotes a healthier and less stressful relationship with money, reducing the financial anxiety that plagues people both young and old.
The goal is to save at least 30% of the available amount after fixed expenses, which makes Kakeibo one of the great, undiscovered money saving tips from around the world. Overall, it has a lot of advantages, since it’s a straightforward method that requires just a notebook and a pen. It’s also customizable like the zero-based budgeting method, and allows you to spend and save money based on your prioritized needs.
Drawbacks
Despite this, Kakeibo also has a few cons that you should be aware of. Like Zero Based Budgeting, it requires a lot of manual work since it involves writing down even the tiniest expense every single day. In fact, Kakeibo’s emphasis on physically writing down every expense makes it the most laborious money saving tip on this list.
If you aren’t ready to dedicate this much time or hate journaling, then this method may not be the best option for you. Besides being time-intensive, it requires you to hold yourself accountable for every cent you spend, this constant monitoring of your spending habits is not only ardorous but can make you so fatigued that you abandon your plans for saving money altogether.
Paying with Cash
This money hack may not seem like one of the more notworthy money saving tips from around the world, but the method comes from Germany which ranks 5th among all the world’s countries in terms of its abilty to save money.
According to a study published in 2022 by Germany’s central bank, Germans pay for nearly 60% of their purchases, both goods and services, using cash. This seems remarkable in the age of buy now pay later apps or credit and debit cards. But it is a testament to the German culture which tends to value frugality and thriftiness.
This is due to Germans’ fear of credit debt, an obsession with privacy, and mistrust of big-tech corporations – especially among Germany’s older population. While this habit comes from a culture that is in many ways different from American culture, it can teach a valuable lesson in saving. After all, Germans save almost twice as much as Americans.
Evidently, paying with cash helps you save, the question is why?
Multiple studies have found that people are more willing to spend when paying with credit cards than with cash. That includes research by MIT, the American Psychological Association, and Dun & Bradstreet. On a psychological level, people find it harder to part with cold, hard cash, and become more aware of the money they’re spending when paying with cash, rather than a card.
Similar to Kakeibo, paying with cash simply makes you more mindful of your spending habits and just being aware can help you save money. If you think Kakeibo or Zero Based Budgeting is too time consuming for your lifestyle, then paying with cash could be an easy first step to saving money. Later on, if you choose to integrate one of these other budgeting methods, continuing to use cash will simplify your budgeting process even more.
Drawbacks
But as with all of these money saving tips, even paying with cash has some serious disadvantages. The greatest drawback of paying for everything using cash are the benefits you lose out on. Credit cards offer rewards that can earn you 1% or 2% of your money back, or discounts at some stores. Depending on the card, you can earn airline miles for future trips – all of which you’ll miss out on when paying with cash.
Another downside is the risk of your wallet being lost or stolen since you won’t be able to get this money back as you would if your cards were stolen. This means you should only carry a small amount of cash on you which may help limit your spending, but frequent visits to the ATM could grow very tiresome.
Lagom
Lagom is one of the money saving tips found commonly in Scandinavia, but is perhaps most well-known in Sweden. Loosely translated to ‘not too little, not too much, but just enough’, Lagom is part of a lifestyle.
This Swedish philosophy frowns upon flashiness and extravagance, and instead promotes balance in everything from eating and shopping, to living. Lagom focuses on living exactly according to your needs, and you can apply its concepts to your finances to save money as well.
This approach to personal finances encourages you to plan before doing anything. For example, you’re encouraged to plan your meals and pick out recipes ahead of time in order to save money when grocery shopping and buy only what you need.
As a method of budgeting, Lagom could benefit your mental health as well since everything is planned out from the start of the week or month. It also promotes sustainability and reuse since Lagom encourages saving money by caring for what you have instead of always buying something new. Essentially, this encourages you to shop ‘just enough’.
Lagom also encourages you to set aside ‘just enough’ money every month. Of course, the amount depends on how much is ‘just enough’ for you according to your budgeting plan. Like the other money saving tips in this article, Lagom is largely about practicing mindfulness when it comes to spending. This increases your awareness about your money habits and helps you fix bad habits.
Drawbacks
Yet, even Lagom has one major disadvantage. Its focus on balance makes it highly subjective to the person implementing it. Finding that perfect balance between your income, expenses, and savings will take extensive trial and error before you can settle into a routine.
The Bottom Line
Money saving tips differ from culture to culture, and learning other cultures’ techniques for saving money can help you overcome some of the obstacles in your financial journey. While everyone must deal with challenges unique to their situation, its safe to say that there is room for at least one of these money saving tips in your life.
Evaluate each method carefully and consider your personality when deciding which one to try. Just because one method does not work for you, doesn’t mean you should give up all together. Instead, take each step as a learning experience. After all, these traditions didn’t come out of thin air, they were perfected and handed down by generation after generation. This means it will also take time for you to find the best system for yourself.
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