Eric Hsu remembers a time when he was 10 days away from payday and only had $32 left. He had no savings.
“With the remaining money I had, I bought white bread and ate that for all three meals until my paycheck came in,” he told CNBC Make It.
“Sometimes I would think I wasn’t earning little, I would actually think I was earning an upper-middle range salary. But I still feel really poor every month.”
Hsu belongs to a group of people in Taiwan, typically young and single workers, called the “yue guang zu” – the so-called “moonlight clan”.
The term describes being broke at the end of each month, or as Hsu describes it: “Money comes in from my left hand and out from my right hand.”
This behavior is very different from that of their parents, who have literally saved every penny they have.
Chung Chi Nien
Hong Kong Polytechnic University
The term originated in Taiwan but is now also commonly used in mainland China and Hong Kong to describe the younger generation, said Chung Chi Nien, a professor at Hong Kong Polytechnic University.
According to a local report, an estimated 40% of young singles living in Beijing, Shanghai, Guangzhou and Shenzhen live paycheck to paycheck.
“This behavior is very different from that of their parents, who have literally saved every single penny they have. But the younger generation is spending every single penny they have,” said Chung, who specializes in economic sociology.
The rising cost of living puts more people at risk of becoming part of the “moonlight clan,” especially those with low incomes, Chung said.
While Taiwan’s inflation rate of 2.4% is much lower compared to many parts of the world, consumer prices and food costs are still rising.
For 34-year-old A-Jin, fixed costs like insurance, utilities and transportation already account for “more than half” of her monthly salary of 30,000 new Taiwan dollars (about $985), she told CNBC Make It.
“I was left with NT$10,000 a month for groceries and other expenses. Eating out now costs about NT$300 per day. There is no way to save,” said A-Jin, who works in the service industry.
“If an emergency happened to me, like a car accident, I wouldn’t have the money to deal with it.”
Not just inflation
But for some others, it’s the “you only live once” mentality that encourages them to spend as much as they can – even if that means going into debt.
Since Hsu began working 10 years ago, the civil engineer has struggled to accumulate savings as he tries to pay off his student debt.
“Instead of saving the leftover money I had at the end of the month, I decided to pay off my debts instead,” his Mandarin comments read on CNBC.
I let it get out of hand and thought, since I have a credit card, let’s buy a car while I have it.
But when a serious knee injury left him unemployed for two weeks without pay, Hsu realized he was unable to support himself.
“I thought, if I can pay with a credit card and make my life easier, why not?”
But before he knew it, he had up to four credit cards and almost 70% of his monthly salary was going towards paying off these debts – leaving little left to save.
Hsu admitted that half of his debt was for necessary daily expenses, but the other half was due to his “lifestyle choices and desires.”
“I let it get out of hand and thought, ‘Since I have a credit card, let’s buy a car while I have it,'” Hsu, 38, said.
“Shopping online also exposes you to a plethora of things to buy, and the fact that you can make purchases so easily hasn’t helped.”
“Small but sure luck”
The concept of the “Moonlight Clan” reflects the disillusionment that young people feel about life today, said Chung, the professor. It’s similar to other terms that have gained popularity in China in the last two years, such as “Tang Ping” and “Bai Lan.”
“In the context of East Asia, the parents of the Moonlight clan have experienced very successful industrialization and achieved their life goals,” he added.
“But it’s a different reality for this generation… They see their parents’ success but they just can’t match it. There is a big gap between expectations and reality.”
The “Moonlight Clan” exists primarily because home ownership is no longer within the reach of young people in Taiwan – due to the lack of affordable housing, Chung said.
This can be anything from buying a cup of coffee at Starbucks to taking a trip abroad – things that give you a small feeling of happiness to compensate for the loss of an overarching life goal.
Chung Chi Nien
Professor, Hong Kong Polytechnic University
According to UN Habitat, housing is considered affordable if the house price to income ratio is 3.0 or less.
In comparison, Taiwan’s current ratio is 9.6, and Taipei City’s current ratio is 15.7, according to the Interior Ministry.
“The expectation of buying your own home, getting married and starting your own family has now gone far too far to achieve,” Chung said.
“Young people would rather give up this dream and spend money on things that they are guaranteed to get today.”
These things are called “xiao que xin” – which means “small but very sure happiness” in Mandarin.
“It can be anything from buying a cup of coffee at Starbucks to taking a trip abroad – things that give you a small feeling of happiness to compensate for the loss of an overarching life goal,” Chung told CNBC Make It.
Hsu agreed, sharing a common saying in Taiwan that describes the current state of affairs: “Houses are not for living in, but for investing.”
“A three-bedroom now costs NT$20 million. How long do I have to save on my annual salary of NT$720,000?”
“You would only be serious about doing something if you had a clear goal. Without the ability to buy a house, they say, ‘There’s no point in making money if you don’t spend it,'” he added.
No long-term goals
A-Jin said she has no long-term financial or life goals and has “completely given up” on buying her own home.
“As long as I have something to eat and my stomach is full, I will not die. That’s enough for me,” she said.
“Since everything else is impossible, I just think about how I can be kinder to myself, that’s all.”
For Hsu, he believes the most difficult days are behind him. After his experience, he canceled his credit cards two years ago and committed to saving a third of his salary every month.
Not knowing whether you have enough money for food until the next payday was a very frightening situation – but it was my own doing and the punishment fits the crime.
However, he still sees himself as part of the “Moonlight Clan” as he is unsure whether he would survive another emergency.
“I still don’t have any long-term financial goals… My priority is paying off the rest of my credit card debt. The only thing that drives me is the fear of going hungry again,” he said.
“Not knowing whether you have enough money for food until the next payday was a very frightening situation – but it was my own doing and the punishment fits the crime.”
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