The secret to wealth lies in plastic bottlesAs the economy continues to bounce along, a day-to-day knack for inventive money management is seen as a key survival skill. A growing number of Koreans are returning to the tried but true method of good financial planning: spend less and save more. Koreans call it “life without bubbles,” as in no champagne. The path to a frugal lifestyle can be quite interesting, as the following vignettes show.
Hong Gyeong-ok, a stay-at-home mother who has been married eight years, uses her creative impulse to save money. Her focus is on recycling. She can make about 10 different kitchen utensils from a plastic bottle. She cuts the bottle in half, using the top as a funnel, the other half becomes a flowerpot. She cuts a bottle at a diagonal angle to fashion a garden trowel. She fills bottles with water to make dumbbells for her children. A slit is a hole in a plastic piggy bank.
“It helps our children develop creativity,” Ms. Hong says. “A plastic bottle piggy bank is excellent, because you and your children can see how much you have saved.”
Hardly anything is tossed away once it reaches the hands of Ms. Hong and her family. Ms. Hong stashes away everything, using most articles at least twice before throwing them out. She uses buttons and zippers from old clothes, turns small trousers into skirts, designs aprons from pillow covers and uses milk packages as food containers.
“I recycle buttons and elastic bands to make other garments for my kids and use the fabric from old clothes as floor covering,” she says. “It is as much of a hobby as a conscious decision to save money.”
The biggest secret to Ms. Hong’s financial habits is in the little things she does to save money. When it comes to food she eschews discount stores for traditional markets, which are more generous with free items. Sometimes her methods can be quite elaborate. She mixes shampoo with water in a seven-to-three proportion, makes her own curtains and always checks her receipts.
“Once I went to a store where I saw a detergent for a special rate,” Ms. Hong says. “The product was on sale for 1,190 won ($1). But I knew from checking my previous receipts that the product has always been 1,190 won. Most consumers would automatically grab a product advertised as ‘on sale’ just because the sign says it’s so. That’s why you always have to check your receipts.”
As far as having emergency funds, Ms. Hong does not rely on a savings account. She buys insurance instead. She says buying insurance is an option that encourages you to hold on to that money until a real emergency arises because an insurance policy is more difficult to access than a savings account.
Ms. Hong says she considers saving money a life crusade. Even for something as important as her children’s education she has found ways to cut back without compromising their lessons. She has never hired private tutors to teach Korean to her children. Instead she hangs packages of their favorite snacks from a line and insists that they read and spell the names of the food correctly before they are allowed to eat them. She knows from working at a supermarket that most kids do not read the food packages, but rely on the logo.
The Internet has become a vital source to share money-saving ideas. Collective bargaining and various other free or discounted off-line services have helped people save money. Throughout the country the notion of humble living is quickly attracting publicity.
Park Seo-jin is known as the “coupon girl” among her friends. A 24-year-old university student who has two years to go before graduation, Ms. Park says every won is precious. As for her moniker, she says it refers to her habit of collecting coupons to get discounts on movies and at restaurants.
“I was spending too much on materials for my class assignments,” says Ms. Park, a fashion design major. “My monthly income from a part-time job was 100,000 won. After paying 60,000 won for public transportation I had nothing left.”
Ms. Park says she could not work another job because she had too many school assignments. So she relied mostly on what she had saved during the summer plus the coupons she collected from the Internet and other sources. The discounts, she says, allow her to eat out with friends and shop.
“My friends mocked me at first, but they are all doing the same thing now, collecting coupons,” she says.
Ms. Park says she saw many of her peers buy designer brands and frequent the best restaurants as if they were celebrities rather than students. She says a part-time job at a designer boutique in a department store one summer helped her balance her spending. The experience, she says, allowed her to understand the monetary system and break her fantasy about brand-name products.
“It just took away all my impulse to buy expensive goods when I found that many people with credit card debt just kept on buying these products,” Ms. Park says.
Today Ms. Park has taken on the habits of Ms. Hong, redesigning old clothes that are sitting in closets and turning them into new styles. She logs on to Internet sites of cosmetic companies to sign up to receive free samples. Recently, she opened a bank account with her boyfriend, and saves 3,000 won a day.
When it comes to thrifty living, Lee Dae-pyo is the self-proclaimed master. He proudly asserts that he spends an average of only 3,500 won a month on his mobile phone. As a 28-year-old Web master who runs an on-line club called Jjandoli, which means cheapskate in Korean, Mr. Lee is known among his friends for his miserly ways -- and for good reason.
After Mr. Lee checked his e-mail for an interview request he sent a brief text message to the reporter instead of calling. “Please call me,” the text read. Later he said he had sent the text message through a free Internet service.
“Of course there was a time when I spent money like a drunken sailor,” Mr. Lee says. “But my bank account balance always came out to be zero. I did some calculating one day to determine if I could afford to buy my own home. With my income and my expenditures it would take 19 years to save up enough money to buy a home. It hit me at that moment that I shouldn’t live like this anymore.”
One of the first things Mr. Lee said he did was develop a habit of keeping a written record of his monthly expenditures.
“It was shocking,” he said. “I just couldn’t remember by the end of the week most of the items I had spent money on. I spent too much on things that I didn’t need.”
Now he takes his lunch to the office. He got extra jobs, and worked on weekends. After three years he had saved 65 million won.
Mr. Lee met his wife about three years ago, but he did not give up his new lifestyle just to impress her. For movies he took her to free screenings in the sparse theaters operated by the district office in his neighborhood. He took her on picnics, preparing all the food himself; they drank coffee from vending machines, and he took her out to eat in inexpensive restaurants near college campuses. Even after getting married, the couple spends just 120,000 won a month.
“I set my own standard of value in spending money,” he says. “It all depends on whether the money is for my family or not. One of the biggest reasons I save is so my family can lead a comfortable life in the future. But there is no point in saving if my family finds it difficult living now.”
There are people who are cheapskates themselves. Others, like Yu Yo-han, also encourage others to be stingy. A self-proclaimed “Scrooge,” Mr. Yu is a 29-year-old wedding planner whose niche is helping couples on tight budgets arrange all the details for their special day.
His theory is this: “God makes billionaires, but you make yourself rich by being a humble wealthy person.”
When it comes to saving on a wedding, he advises couples to steer clear of package deals. When furnishing a first home, he says the best bet is to buy quality products from lesser-known furniture companies rather than buying cheap stuff from brand-name shops.
Mr. Yu arrived at his career as a wedding planner by chance. He worked a host of other jobs, from postman to a cappella singer. At one of his first jobs as a kid, pushing his mother’s sausage cart, he made 200 won a day. He spent 100 won and saved the other half.
“There is no point in buying cheap stuff at a cheap price,” he says. “The real saving is when you buy expensive things for a cheap price. To do that you have to be willing to shop around.”
by Paik Sang-a