When I first visited China as an adult, I was really surprised to see Chinese people (over there they just call them “people”) drinking and smoking, wasting time, and being below-average violin players. Chinese Americans are not like that. Then I realized, Chinese and Chinese Americans are fundamentally different people. After all, it’s the difference between the group of people who stayed and the group who left.
In retrospect it seems silly to characterize a billion people in one certain way, without really understanding what causes them to be that way. That’s where we start mistaking cause and effect. For instance, let’s start with ending this stereotype: Asian Americans (“AA”)are not cheap. You may see Asian people refusing to spend money on certain things and having high savings rates, but I’d argue it’s not because they’re cheap but because they’re different. Once we understand the backgrounds of Asian Americans, it’s easy to see why they spend the way they do.
What Cheap is Not
Some Asian Americans say they’re cheap because they “hate paying more than they have to” or because they “like good values.” That’s not cheapness so much as not being a complete idiot. Who likes paying more for the same service? Who likes buying products that are poor values?
Despite it being fashionable for millionaires and billionaires to SAY it’s immoral for them to have so much money – they don’t voluntarily pay more in taxes. Only $714,000 was donated to the government last year. People who say they “WANT” to pay more in taxes admit that they still take advantage of tax loopholes to save them money.
Not paying more than you have to? Normal.
Asian Americans haggle at stores. That also doesn’t mean they’re cheap. It’s just more common to haggle in Asia than it is in America. That’s more a custom than a character flaw.
What Cheapness Is
According to Urban Dictionary, a cheap person is someone “who is extremely careful with money.” Wikipedia defines frugality as “sparing, thrifty, prudent or economical in the consumption of consumable resources such as food, time or money, and avoiding waste, lavishness or extravagance.” Sparing with food? That’s basically the opposite of being Asian or Asian American.
Some AAs brag about being cheap, but I think they’re trying to explain the culture from the eyes of a (somewhat racist) outsider. Sure you can see it as being cheap, but Asian Americans often place different values on certain things than other Americans. For the things that they care about, AAs will spend ridiculous amounts and won’t even try to skimp in the ways that others do. For instance:
Asians Spend A Lot on People
Asian don’t cut their spending on the people they care about. Asians fight for the check among family and friends. How many other people resort to violence in order to pay MORE rather than get a free ride? Also Asians and Asian Americans don’t go dutch on dates. My parents laugh hysterically at this idea.
Personal finance bloggers love to talk about cutting off irresponsible parents or adult children. Asian people, however, support their families financially without boundaries. Asian parents will let their kids live with them indefinitely – and will pay for everything. Similarly, Asian children know from an early age that they’re responsible for taking care of their parents when they’re older no matter how irresponsible those parents were.
I see a lot of non-Asians that love being taken out to eat by their parents. For Asians, it is one big pot, so it seems like less of a treat. The money my parents spend on me will eventually be money I spend on them.
Asians Spend A Lot on Education
I know lots of non-Asian parents will pay for their kids to go to parties or dances or social events. Asian American parents won’t let their kids go to any of those things, but they will pay for their kid to go to whatever educational activities they want. They will pay for the most expensive tutors, the most acclaimed teachers. They will pay to travel to competitions and recitals, admission fees, equipment, etc.
Asian American parents do not gear their kids toward state schools if there’s an opportunity to pay full freight for the best schools. My mom ran into an AA mother whose kid was at Princeton. My mom noticed that the mother’s groceries were filled with bruised fruit – those are the lengths that Asian parents will go to to send their kids to the best educational institutions. I mean, maybe you can see the parents as cheap, but Princeton is expensive.
Asians Spend a Lot on Health
When I got sick as a kid, my mother would make me any number of horrible tasting tonics. Little did I know, the herbs that my mother used were very expensive – some could cost hundreds of dollars per pound.
Likewise, Asians spend a lot on food, because good food is integral to good health. I mean, they don’t spend a lot when they really don’t have any money. My mother lived on rice and soy sauce when she was a young immigrant. But once Asians have money, the money goes to food. My family comes from a coastal area and are used to eating a lot of seafood. I always have a bag of shrimp in my freezer. It doesn’t matter the cost – I’m not going to start eating rice and beans just to save a few bucks if I have the bucks to spend.
Asians Spend a Lot on Travel
40% of Americans have never left the country. I assume very few Asian Americans fall into this category. First, most Asian Americans are foreign-born or second-generation so they came from another country or still have family or ties in another country. Plus being an immigrant means you know there’s a whole different world out there, and if you’re going on a plane trip to your parents’ home country, it’s less intimidating to go on a plane to somewhere else. It’s basically a gateway drug.
Asians Spend a Lot on Occasions
The internet is full of advice on how to save money on weddings. None of that advice is applicable to Asians though, who are practically required to throw super expensive weddings. Indian weddings are notoriously lavish. Chinese weddings can have hundreds of guests and feature a 10-course meal. Also it’s customary in Chinese weddings to make sure their guests are comfortable. Brides and grooms will often pay for their wedding party’s expenses and the expenses of their family.
This flies in the face of wedding personal finance. How can you say this is a cheap culture when there are so few angsty bridesmaid stories?
Asian Americans Save for the Future
Are AAs swimming in their money a la Scrooge McDuck? Nope. Asian Americans have a lot of savings to account for the future – buying a home, having a family, or unexpected emergencies. There are lots of reasons that Asian Americans might think they need to save more money than the average American.
Asians Help Themselves
I’ve seen some articles say Asian Americans save because they love money. And I think that’s asinine. If you just think about it for a bit, Asian immigrants save because it makes sense in their specific situation. Asian countries don’t give charity. There’s no pension or Medicare, workers’ comp. You have to save for yourself and for your family.
Also, American history is not one that has welcomed or helped Asians. See, e.g., the Chinese Exclusion Act, Japanese internment, even coronavirus fears now. Asian people have never forgotten how hard it was for their parents or grandparents’ generations to make it, and they expect that their lives will be more difficult than for someone who isn’t a different race. Saving is a way to protect themselves from racism.
Asian Immigrants Are Desperate to Succeed
You may realize that Asia and America are not close to each other. So if you’re poor, it would be difficult to get here. If you’re rich or somewhat well-off, it’s would be a lot easier to stay in your home country to succeed. If you emigrate, you have to learn the language, the laws, the customs, the money, the immigration process, and you likely don’t have a huge network. You have to have enough money to travel but not enough money where it would be better to stay. And if you choose to leave, you know it’s a huge risk.
If you leave Asia for America or Canada, you have decided you are going to work like crazy to succeed. How do you do that? By saving your money so you have options.
It seems like Asians are so boring. They work hard at school and take stable jobs. But if you think about how risky it was for them or their parents to get here, you cease to wonder that they are taking as few chances as possible to succeed. Asians are following the tried and true script for success – work hard, save a lot of money as security, make conservative investments. Otherwise coming here was a failure.
Have you ever noticed how a ton of Asian entertainers all have excellent educations? Lucy Liu went to Stuyvesent High School and UMich. John Cho graduated from Berkeley. Ali Wong graduated summa cum laude from UCLA. Gemma Chan studied law at Oxford. Jeremy Lin went to Harvard. Mindy Kaling graduated from Dartmouth. Aziz Ansari went to NYU. Ken Jeong is a medical doctor.
Asian people make sure their kids have a fallback of education because they want to guarantee success as much as they possibly can. They’re not leaving things up to chance.
Asian Americans Understand Extreme Poverty
Another reason Asian people save so much cash is because in a way it’s really easy. Asians have seen extreme poverty in Asia – the kind you don’t see in America. And for whatever reason, Asians seem to always remember that and look down instead of up.
Compare an American slum (above) with a Chinese slum (below). The American slum used to be an ok place that has fallen in disrepair. Middle class families could move in and spruce it up. The Chinese slum is made up of shanties – there isn’t an equivalent in America. It will only get better by razing it down And when you’re exposed to such poverty, it’s much easier to think that skipping a latte does not count as sacrifice.
Also, because Asians travel, they know how much opportunity there is in America. It’s hard not to be grateful for such opportunities and not want to waste them by squandering your money.
Ok Some Asians Are Cheap
You might point out this or that Asian person who is incredibly stingy, even towards their own health or towards their family. Ok fine, SOME Asians are really stingy. There are over two billion Asians- some have got to be assholes, ok? But a lot of us aren’t.
Why It Matters that Asians are Not Frugal or Cheap
Ok this is a blog about women lawyers – what does Asian Americans being or not being cheap have to do with that? Well nothing and everything.
Personal finance is personal. There’s no right way or wrong way. And if someone does something differently it’s not because they’re more self-controlled or cheap or stupid or whatever host of words you can use to describe it. They’re just different.
In a way though, everyone is the same. Millennials have also been accused of cheapness because they save. Really, it’s a reaction to entering adulthood in a recession, saddled with hefty student loans. Everyone has their reasons for doing whatever they’re doing and instead of judging someone else’s behavior with a label – maybe we just need to better understand their reasoning behind it.