Sunday, September 6, 2009

A few thoughts on living in a cash-based society

I know you're all wanting to hear of our adventures, but allow me to wax philosophical for just a moment.

China's economy is strictly cash-based. You can use your credit card at the finer hotels, and we even discovered that IKEA will take our debit card, but we don't shop at those places (at least not much, although we did have to buy two IKEA beds when we first got here.) And the Chinese people certainly don't shop there (much).

We have had to really re-learn how to use money. Every two weeks, when we get our paycheck, we go to the atm and use our debit card to take out all the cash we will need for two weeks. Keep in mind that $100 US is about 700 quai. We have to pay everything with this cash: utilities (more on that later); groceries, our Ayi, haircuts, clothes, light bulbs, printer cartridges, you name it. It has really forced us to look at each and every purchase and to make sure we are budgeting well. The bottom line is, if you don't have the cash, you can't buy it!

Here's how you pay your utility bill: you come home one day and there is a bill taped to your front door. You ask your driver what it says and where to go to pay it. Let's say it's the water bill. You go down to the water company with your bill and your cash. You stand in line and when you get to the front the guy gives you a box full of bills. You find the one that matches yours (again, with your driver's help, since you can't read Chinese!) You take that bill and your original bill and go stand in another line, and when you get to the front of that one the person looks at your two bills, makes sure they match, and stamps them with his official stamp. Now you take your two stamped bills to a third line, where you finally pay and get another official stamp saying that you have paid. Now you can file the bill you found in the box and take your stamped bill as a receipt.

As I have been learning to live with cash and to really budget I have been thinking about the mess the US economy is in. I'm no economist, but I really think that if Americans were forced to live on only the money they actually have in their pockets we wouldn't be in this situation. The Chinese economy has not had the same problems the US has (although, I admit, most Chinese were poor to begin with. The average salary is 1500 quai/month, roughly $215 US). The people here carry little or no debt simply because it isn't available to them. Even large companies only buy what they actually have the money for. Didn't we get into this economic disaster by spending money we didn't have? Wouldn't it make sense to stop the madness?

I know the economists would say that if people stop borrowing our economy would crash, but I have to say I simply don't believe it. Oh, sure, there would be a period of adjustment, and quite a few banks might fail (is this really a bad thing?) but I don't think it would be long before the US would be very, very stable monetarily speaking. Oh, and especially if our government would take this idea to heart. Can you imagine the president: "Sorry, but we can't build that expensive unnecessary fighter plane right now. We will save up for it and let you know when we have the cash."

I know that I don't ever want to go back to spending money I don't actually have or playing "bank roulette" (you've done it too; admit it! "It's Wednesday and the check will be deposited on Friday so if we go out to dinner and write a check for it I'm sure it won't go through before the money is available...."). It is so freeing to only spend money I have, and we're all learning how fun it can be to save up for something you really want. It's so exciting when you actually get to go down and buy that special thing you've been saving for!!

I know I won't convince everyone, but maybe you folks reading this would be willing to give it a try. Make a promise to yourself you will only spend what you have in cash. See how exciting it is. Then pass it on! Who knows, maybe we'll start a grass-roots economic movement that could literally change the world.


  1. Mindy, you are a wonderful writer. My word, what a hassle just to pay one simple bill!! When do they ever find time to work if it takes that long to pay each bill?

    I agree w/you that the world wouldn't stop turning on it's axis if the U.S. stopped this indiscriminate spending and adopted a "cash only" lifestyle. Then companies would have to pay what their CEO's are really worth which definitely wouldn't be the millions & millions they currently receive.

    Thanks for posting. I'm loving reading about your life in China & how they live their day to day lives.

  2. Hello, I'm Noni's son Jarred. Thanks for posting about your experiences. I totally agree, cash based is a freeing way to live! Credit isn't great and debt is evil! Keep it up...have you ever read Adbusters magazine? It's something you might enjoy. It's pricey though so you better make sure you have the $$$ first, HA.

    take care

  3. Mindy,
    Anxiously awaiting more blog entries.