Recent studies show the highly educated, highest income group in the United States are the Asian Americans. They are said to be more satisfied compared to other Americans when it comes to their lives and can handle financial management better. They also consider marriage, hard work and success as more valuable than other people. Do they have a secret? According to Yu Kong Zhao, an expert in business strategies on China, these Asian Americans follow the teachings of Confucius.
Zhao himself is a witness that the teachings of Confucius helped him improve his life in several ways. When applied to financial management, the teachings provide a great impact. To spread this great news, Zhao then published a book entitled “The Chinese Secrets for Success: Five Inspiring Confucian Values”, which offers tips and guidelines for financial management. It focuses on 5 Confucianism teachings, namely determination for an outstanding life, developing desirable friendships, pursuing an excellent education, caring for your family, and thriftiness. Here are the main points that Zhao wants to share in general:
1. Avoid Debt.
Confucian values do not favor short-term gratification (debt) for a better investment on the future. Chinese people tend to hang onto their cash, and find ways to survive without taking on debt. A recent study shows about 40% of American citizens live beyond what earn. Americans use credit cards and then to work extra hard just to pay off those debts. As a financial management strategy, Asian Americans follow a different trend. Most Asian Americans believe they can live their lives without debts on those credit cards.
2. Save for the future
Zhao says Asian American families have an intense focus on saving. It is intended for securing the future of their children and for their retirement. Studies show there is a 25% savings rate for Chinese people regardless of their income level, while US citizens usually save 5% or less of their income. Most Asian people believe in this superstitious belief. A fish dish during lunar Chinese New Year serves as a reminder for Chinese people to save money during the new year.
3. Be thrifty and spend wisely
Confucian philosophy further emphasizes on spending wisely. Quality of products are always considered by Asian Americans. How cheap or how expensive the item is, is of less importance providing it does the job right. Asian Americans also purchase items only if they need it. If it is not a priority, they will save that for the future. They also teach their children about math and budgeting at a younger age. This is to get them ready for the future, and to instill the teachings of Confucius as early as possible.
It is important to think differently when it comes to financial management. Zhao ensures that following these guidelines will ensure you will have better money management, whoever you are, whatever race you belong to.