Young people in Greater China are blowing their paychecks every month — even if they don't have to

The young are giving up on buying houses to spend money on things they can get today.

Young people in Greater China are blowing their paychecks every month — even if they don't have to

Eric Hsu recalls a moment when he had only $32 remaining and was just 10 days from his payday. He had no savings.

He told CNBC Make It that he bought white bread with the money he had left over and ate it for three meals up until his pay arrived.

Sometimes I thought I was earning a salary that would be considered upper middle income. "But I feel poor every month."

Hsu is a member of a group in Taiwan that consists mainly of young, single workers. They are called "yue-guang-zu" or the "moonlight family."

Hsu explains it as "money comes in my left hand, and money goes out of my right hand."

The parents of these children literally saved every penny they had.

Chung Chi Nien is a professor at the Hong Kong Polytechnic University and a chairperson. She said that although this term originates from Taiwan, it's now used frequently in mainland China as well as Hong Kong to refer to younger generations.

According to a local newspaper, an estimated 40% of single young people in Beijing, Shanghai Guangzhou and Shenzhen live paycheck-to-paycheck.

This behavior is different from that of their parents, who literally saved each and every cent. The younger generation, however, spends all of their money," said Chung who is an expert in economic sociology.

Chung said that the rising cost of living is putting more people at risk of falling into the "moonlight group," particularly those with low income.

Taiwan's 2.4% inflation rate is lower than many other parts of the globe, but consumer prices and food costs continue to rise.


Food prices are increasing for everyone

A-Jin told CNBC Make It that fixed expenses such as insurance, utilities, and transportation take "more than half" her monthly salary of 30,000 New Taiwan Dollars (about $985).

"I would be left with NT$10,000 a monthly for food and other costs. Eating out costs about NT$300 a night. A-Jin who works in service said that there is no way to cut costs.

If I had an emergency, such as a car crash, I wouldn't have the cash to handle it.

Not Just Inflation

Some people are motivated by the mentality "you only live one time" to spend as much money as they can, even if that means going into debt.

Hsu, a civil engineer who started his career 10 years ago has struggled to save money because he is trying to pay back his student loans.

According to CNBC, the translation of his Mandarin comment stated: "Instead saving the leftover money at the end the month, I paid off my debts."

Since I had a credit card I thought, "Let's buy a car now that I have it."

Hsu was forced to leave his job for two weeks due to a severe knee injury. He did not receive any pay during this time.

"I thought that since I could use my credit card to make things easier and pay for them, why not?"

He had four credit cards before he realized it. And almost 70% of each monthly salary went to pay off these debts, leaving him little money for savings.

Hsu admitted that half of his debts were for daily necessities, but the other half was due to his "lifestyle and desires".


Why China was a leader in 'quiet quit' before the rest the world.

Hsu, 38, said, "I let it get out-of-hand and thought,'since I've got a credit card let's buy a car now that I've got it.'

"Online shopping exposes you to an array of products that you can purchase and the ease with which you can do so did not help."

"Small but certain happiness"

Professor Chung said that the concept of the "moonlight tribe" represents the disillusionment young people have with life today. The term is similar to other terms which have become popular in China over the last two years such as "tangping" and "bailan".

He added, "In East Asia the parents of the Moonlight clan have achieved their life goals and experienced a very successful industrialization."

"But this is a very different reality for the current generation. They see their parents' success, but they simply can't achieve it. "There's a big gap between expectations and reality."

Chung said that the "moonlight group" is a result of the fact that house ownership in Taiwan has become unattainable for young people due to the lack affordable housing.

You can compensate by buying a coffee at Starbucks or going on a trip overseas.

According to the U.N. Habitat, housing is considered affordable when the house-price-to-income ratio is 3.0 or less.

According to the Ministry of the Interior, Taiwan's ratio currently is 9.6 in Taipei City and 15.7 elsewhere.

Chung stated that the expectation of buying a house, getting married and starting a family was now too high.

Young people are more likely to spend their money on items that they can get now than on dreams.

In Mandarin, these things are known as "xiao qu xin", which means "small but certain happiness".

Chung said to CNBC Make It that "it could be anything, from buying a coffee at Starbucks to going on a trip overseas -- things that give you a little sense of happiness in order to compensate for losing an overall goal of life."


Taiwan's economy will slow down to 2% growth this year, according to economists

Hsu also agreed, citing a popular saying in Taiwan which describes the current situation: "Houses, not for living but for investment."

A three-bedroom apartment now costs NT$20million. How much money do I need for my salary of NT$720,000 per year?

"Only if you are serious about your goal will you be able to do something." "There is no point in making money if it can't be spent," he said.

No long-term goals

A-Jin has said that she does not have any long-term goals in terms of money or life and has "completely abandoned" the idea of buying her own house.

I will not die as long as I can eat food and have a full stomach. "That's enough for my needs," she replied.

"Since nothing else is possible, I only think about how I can be kind to myself."

Hsu believes that the worst days are behind him. He canceled his cards after his experience two years ago, and has committed to saving a third of his monthly salary.

It was very frightening to not know if you had enough money for food before the next pay day. But I did it myself and the punishment was appropriate.