According to a Nielsen report released last week, Asian-Americans are the most

According to a Nielsen report released last week, Asian-Americans are the most prolific spenders in the United States. Last year, the average annual expenditure among them totaled a whopping $61,400, nearly 40% more than that among millennial households. This spending power is partly due to a strong household income. As the study notes, Asian-American households, on average, are more likely to have incomes of $100,000 or more than general U.S. households.

As Asian-Americans become increasingly wealthy, they have become more materialistic, opening the floodgates to expensive brands from Louis Vuitton to Swarovski. While many Asian families still insist on economic prudence, others are more concerned about satisfying their immediate wants, which seems to run counter to what Asian cultures traditionally preach about spending. Our early hardships collectively taught us to invest in the future, not in the present, but new trends suggest these values are slowly dying.

An examination of Chinese culture, for instance, can partly explain why older generations are stingier with their money than millennials typically are. Those older than 50, who save more than 60% of their income, spend less because they vividly recall the financial difficulties stemming from history-changing events like the Great Famine and the Cultural Revolution, as Keith B. Richburg of the Washington Post points out.

Such hardships resonate strongly with those who immigrated to the United States, like my mother, who shared a small two-bedroom apartment with her parents and four siblings in Macau. Given the limited resources her family had, she had to spend her money wisely. This meant buying what was needed and not what was wanted. Since then, she’s followed this principle every time she goes shopping.

“In Chinese, there’s a saying,” she said. “There are four important things in life. Food, clothing, housing and transportation. If you don’t have enough money, you can eat less, buy cheaper clothes and ditch transportation in favor of walking. But you need a roof over your head.”

While some experts often point to such values as a reason why many Asians and Asian-Americans tend to save their money, others, like Sheldon Garon of Foreign Policy, argue that policies and institutions that Asian countries put in place played as significant a role as cultural norms, if not more so. Japan, for example, led the charge to organize domestic savings following World War II in order to spur economic growth. On the other hand, the rapid growth of banks in China during the 1980s encouraged Chinese households to save more. Implementations and institutions like these undoubtedly shaped how many Asians spent their money, Garon asserts.

But a lot has changed over the past several decades. As Hope Yen of the Associated Press notes, changes in the U.S. immigration policy during the 1990s favored wealthy and educated workers, many of whom came from China, India and South Korea. As a result, many Asian-Americans today are wealthier than their predecessors, and they are also more likely to spend money on consumer goods. The Nielsen survey revealed that 35% of Asian-Americans said they were “swayable shopaholics.”

http://www.policymic.com/articles/76529/young-asian-americans-spend-too-much-money