There are few goals that elude expats more than saving money in China. Most people who work in the Middle Kingdom have similar expectations when they first arrive: to learn some Chinese, see some sights, and save a little money. As achievable as these aims may seem at first, many expats find that successfully saving money is as elusive as that perfect teaching job with a trustworthy boss. The transition from a bank-based pay check or direct deposit system back home to a manila envelope-based payment system here can be rough on a lot of people unused to being paid in cash.

There are a lot of options for people who are really trying to save money, and I've found it's possible to put away some cash even if you're just making a few thousand a month.

1) Savings account (储蓄账户)
Since most people had regular savings or checking accounts back home, one issue that plagues foreigners trying to save money is the disorientation that comes with a new currency and system of payment. Banks in China have services for foreigners – all you need is your passport, a 100 RMB minimum deposit, and a little Chinese. You'll have your ATM card in about 10 minutes.

Interest rates are comparable to other countries, and are basically low enough to be negligible, between 1.5 and 2 percent. There doesn't seem to be any difference between the banks and their services, although this writer has found the service at Agricultural Bank to be a little slow.

The main difference between banks is who their partner banks are abroad, which may become an issue when you want to go home. Wells Fargo owns a small stake in Agricultural Bank, Bank of Construction works with Bank of America, while the Bank of Communications works with HSBC and Commonwealth Bank of Australia.

2) CDs (基金)
A rarely considered option for putting money away is put them in a CD. A CD is similar to a regular deposit in a bank, except that you can't withdraw the money until a certain date. Foreigners can buy CDs easily: you just need a passport and a minimum 100 RMB.

CDs can be bought for 3, 6, or 12 months and the interest paid increases with time. A 3 month CD usually gets about 3%, while 12 months goes for 3.5%. The real ‘advantage' of buying a CD is that you can't use the money whenever you want.

3) Stocks (股票)
The Chinese stock market is extremely lucrative and increasingly welcoming to foreign investors. Of course you'll need at least a few thousand RMB in savings to begin buying stocks, and a broker who'll facilitate your purchases, like etrade.com.

In the mainland markets of Hong Kong and Shenzhen, there are three classes of stocks. A-class stocks can only be purchased by Chinese citizens, B-class stocks, and the highly sought after H-class stocks, which are listed in Hong Kong.

Another option is to have a portfolio arranged for you with a Chinese securities company like Haitong (海通证券) or Shenyin (申银万国证券), who can provide guidance and help with the legal hurdles.

4) Budgets
Still, the best way to save money in China is the same as anywhere else: make a budget and stick to it. Too many people, wanting to take advantage of a low exchange rate and high salary, spend freely at bars and restaurants, only to find that their night out wasn't as cheap as they'd thought.

Although some Chinese famously save up to 80 % of their salaries, putting aside even 10 percent of your own will mean you'll have a few extra thousand when it's time to head home. There are a couple of common techniques used by expats that are feasible with a normal teacher's salary.

A well-known method is the hundred kuai a day budget, in which you simply put 700 RMB in your wallet every Monday and hope it lasts for the week. Even if you're making as little as 4,000 RMB a month, you'll have a nice thousand left when your next paycheck comes. This does mean you'll have to eat cheaply a lot during the week if you plan to go out, and doesn't work very well if you plan to travel, but it's a good method if you have trouble sticking to budgets.

You can also just set the amount of money you want to save each month based on how high your salary is. If you live in a first or second tier city, you're hopefully making at least 8,000-10,000 RMB a month teaching; more if you're working for a company. Setting aside 3,000-4,000 RMB of that is reasonable if you're willing to make a few sacrifices. I often remind myself that my first job in Suzhou paid only 4,000 RMB a month, and that if I could live with those constraints at my old school, then I can forgo some of the luxuries afforded by my new salary. A few lunches of Lanzhou lamian for 8 RMB and a couple of bus rides do help stretch your spending cash.

Prices vary a lot from city to city, so it's difficult to gauge how much you should spend on certain items each month. Rent could be anywhere between 1,000-3,000 RMB depending on where you live, or more if you're in Shanghai or Shenzhen. It's possible to have a good night out for a hundred if you factor in a few convenience store beers, but a really good night out can easily be 500 RMB.

One thing is true no matter where you live: eating out a lot is the surest way to break your budget. You can fill up on fried rice for 5 RMB anywhere, but a good Western meal is easily ten times that. Meat and vegetables at your local market can feed two people for 25 RMB a day if you have time to cook. Melting cheese on top of anything is sure to double the price anywhere. Try to make eating a nice meal at a restaurant less of a habit and more of a reward for when you really need it. No matter what your salary, saving money really means not spending it.
 

Related links
China's Banks Compared: Which Offer the Best Accounts for Foreigners?
A Week of Western Food in China for 100 RMB
5 Ways to Behave Like a Local and Save Money

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