Chapter 7: The Month-End Spender
Fortunately, although the realization came late, learning was fast.
That evening, after visiting the hospital, Zhao Qianqian returned home and took out some tangyuan (sweet rice dumplings) from the fridge to cook.
The more she read, the more she realized how limitless the wisdom of the people was.
For example, when it comes to money-saving tips, there is nothing that the vast majority of people cannot accomplish, only things they haven’t thought of yet.
Dumplings, tangyuan, and noodles – just boil them, and they’re ready to eat.
Buy a multi-functional rice cooker, and before going to bed, add some red beans, rice, and water. The next morning, you’ll have a warm bowl of red bean porridge for breakfast.
Frozen buns can be microwaved for 2 minutes – nutritious and filling. Pair them with flavorful chili sauce, cheap and delicious!
And then there’s the all-purpose instant noodles.
You can add eggs to cook.
You can add vegetables, shrimp, fatty beef rolls, fatty lamb rolls, or meatballs.
Don’t know how to cook? No problem. If you can boil water and use a microwave, you can cook your own meals!
While reading an article, Zhao Qianqian wondered if instant noodles contained preservatives, and whether eating them often might affect her health.
Before she could think it through, she saw the article note, “If you’re concerned about safety, you can replace instant noodles with dry noodles.”
Zhao Qianqian almost wanted to kneel down to this group of internet users.
How do they save so much money?!
As a financial management newbie, she learned eagerly, and within just a few days, she saw significant results. The money she spent on food every day was greatly reduced.
The water in the pot began to boil, and Zhao Qianqian added the tangyuan.
Just at that moment, her phone rang.
Zhao Qianqian glanced at the caller ID and accepted the call.
As soon as the call connected, Liang Yan urgently asked, “Qianqian, I’ve been on my honeymoon for the past few days, and my phone was off. I just turned it on and saw you called. Is everything okay?!”
“It’s fine, I just accidentally dialed the wrong number,” Zhao Qianqian replied calmly.
As adults, not causing trouble for each other is basic etiquette.
If her mother had urgently needed money for surgery at that moment, Zhao Qianqian wouldn’t hesitate to ask her friends for help. But since the situation had already been resolved, she didn’t want to bring it up.
“Glad to hear it’s okay,” Liang Yan breathed a sigh of relief on the other end of the line.
Zhao Qianqian subtly changed the subject. “Wasn’t it said that during your honeymoon you would avoid outside contact and keep your phone off the entire time? Why did you turn it on after just one week?”
Liang Yan gave a wry smile. “I originally planned to have a nice, relaxing half-month vacation, but then I thought about the mortgage, and then the car loan. We both got scared.”
“Plus, if the company needs something and can’t reach us, do you think they’ll be nice about it? We just got married. We can’t both end up unemployed.”
“In the end, we decided to turn the phones back on and stay in touch with the outside world.”
Adult life is never easy. Zhao Qianqian had never realized this so clearly before.
Even during a honeymoon, some people couldn’t help but worry about work.
“As long as you’re fine, then I won’t disturb you,” Zhao Qianqian said. She, as a single “The Month-End Spender” member, had no idea what Liang Yan was going through. Realizing her slip-up, Liang Yan hurriedly ended the call.
Zhao Qianqian wanted to say something comforting, but after thinking for a while, she didn’t know what to say.
Money wasn’t the problem. The problem was not having money.
If you had one house to live in and two investment properties, with no loans, who would care about work?!
Zhao Qianqian held her tongue for a while, then finally managed to say, “Don’t push yourself too hard.”
Liang Yan gave a wry smile and hung up the phone.
Zhao Qianqian looked at the freshly cooked tangyuan and suddenly realized she had no right to advise others. Everyone had their own struggles…
—
After dinner, she finished her chores and it was already 9:30 in the evening.
Zhao Qianqian put down her notebook and pen, picked up her phone, and was as diligent as if she were preparing for a major exam next year.
Yun Luo tilted her head and casually asked, “You’ve been learning for a few days now, any results?”
Her tone clearly had a testing edge.
Zhao Qianqian perked up.
To prove she hadn’t been slacking off, she seriously said, “I’ve been focusing on studying the current medical insurance system!”
“Let’s hear it,” Yun Luo said leisurely.
Zhao Qianqian shared everything she had learned. “There are four types: public medical care, urban workers’ basic medical insurance, urban residents’ basic medical insurance, and the new rural cooperative medical care.”
“Public medical care is exclusively for civil servants, offering broad coverage and high reimbursement rates. However, this system is gradually being phased out, and those under public medical care are being incorporated into the medical insurance system.”
“Urban workers’ basic medical insurance, also commonly called ‘medical insurance,’ is aimed at urban workers and retirees. Contributions are made monthly, shared between the employer and the employee. There are minimum contribution requirements: 25 years for men and 20 years for women (some areas require 30 years for men and 25 years for women). After retirement, contributions stop, but one can still receive basic medical insurance benefits.”
“Urban residents’ basic medical insurance, also known as ‘residents’ medical insurance,’ covers three main groups: First, elderly residents who did not participate in the urban workers’ medical insurance or public medical care. Second, students and children (minor residents). Third, unemployed urban adults who did not participate in the urban workers’ medical insurance or public medical care. Contributions are mainly paid by individuals, with financial subsidies. Payments must be made on time every year, and if payments are missed, no benefits will be provided.”
“New Rural Cooperative Medical Care, abbreviated as ‘New Rural Cooperative,’ is for rural residents. The premiums are low, but so is the coverage level.”
“As for reimbursement rates, public medical care reimburses 80%-95%, medical insurance reimburses 75%-85%, residents’ medical insurance reimburses 55%-65%, and the New Rural Cooperative reimburses 55%-65%.”
Yun Luo was a bit surprised. “Looks like you’ve put in quite a bit of effort.”
Zhao Qianqian replied, “You learn from your mistakes. One shouldn’t fall in the same place twice.”
“Aside from the current medical insurance system, what else?” Yun Luo asked further.
“There’s also some small financial knowledge,” Zhao Qianqian began counting on her fingers. “For example, you should always keep 3-6 months’ worth of living expenses aside, no matter what.”
“Then there’s the 72 Rule: the time it takes for your principal to double is equal to 72 divided by the annual rate of return.”
“And the most fundamental method of scientific financial management is to increase income and reduce expenses. If your income is only two to three thousand, no matter how much you save, your savings won’t grow. You have to find a way to change jobs and increase your income. If your income is seven or eight thousand, and you spend six or seven thousand, with only a thousand saved each month, that’s not enough either. You have to focus on both increasing income and saving money for your savings to grow quickly.”
“Risk and return are directly proportional. The higher the return on an investment product, the greater the risk.”
—
Zhao Qianqian said a lot, proving that her efforts during this time were not in vain.
Yun Luo commented, “Looks like you’ve grasped the basics.”
Hearing the affirmation, Zhao Qianqian couldn’t help but show a hint of joy.
But then the system continued, “Let me test you.”
“Go ahead,” Zhao Qianqian straightened her posture, ready for the challenge.
“There are three investment options: a five-year electronic savings bond with an annual interest rate of 4.2%, a one-year bank fixed-term product with an annual interest rate of 4%, and a money market fund with an annual interest rate of 2%. If it were you, which would you choose?” Yun Luo posed the question.
Zhao Qianqian pondered for a moment and confidently replied, “Of course, I’d choose the electronic savings bond! It’s issued by the state, offering secure and stable returns, with annual interest payments. There’s no reason not to choose it!”
“That’s it?” Yun Luo asked.
Seeing the little suited figure expressionless, Zhao Qianqian suddenly felt unsure. She asked hesitantly, “Isn’t that right? The electronic savings bond has the highest and safest return!”
“Focusing only on returns without considering liquidity is a common mistake for beginners,” Yun Luo said gravely. “Before making a decision, you should have asked me when this money would be needed.”
… There’s such a consideration? Zhao Qianqian was stunned.
Yun Luo continued, “If you need the money within six months, the only option is the money market fund.”
“That’s because withdrawing electronic savings bonds early requires a 0.1% fee on the principal, and interest is calculated based on the holding period. If held for less than six months, no interest is paid. Plus, after deducting the fee, the principal will actually decrease.”
“And for bank fixed-term products, you can’t withdraw them before the agreed time, so that option is out.”
Zhao Qianqian hesitated. “… Then when should I choose electronic savings bonds?”
Yun Luo explained, “For government bonds, interest is calculated in tiers: held for 6 months to less than 24 months, interest is paid at the stated rate minus 180 days’ worth. Held for 24 months to less than 36 months, interest is paid at the stated rate minus 90 days’ worth. And held for 36 months to less than 60 months, interest is paid at the stated rate minus 60 days’ worth.”
“In other words, within the first year, choose the money market fund. For withdrawal on the 365th day, choose the fixed-term bank deposit.”
“In the second year, even with interest deductions and fees for early withdrawal, the bond’s return still surpasses the money market fund. For withdrawal on the 730th day, choose the fixed-term bank deposit.”
“In the third year, the conclusion remains the same.”
“For the fourth and fifth years, compared to fixed-term bank deposits, government bonds offer higher returns and better liquidity, making them the superior choice.”
“Considering that high-yield bank products often require thresholds of 50,000, 100,000, or even 200,000, if your funds are limited and you want more flexibility, you can eliminate this option from the start.”
“If the funds might be needed at any time, even if bonds have higher returns, you should still choose the money market fund and forgo the bonds.”
“There is no right or wrong answer in financial planning—only what suits your situation.”
Zhao Qianqian was left speechless.
“This is too hard,” she muttered after a long pause, her expression showing frustration.
Yun Luo replied, “Financial management is like fitness, perseverance brings results.”
“That’s true. Compared to how clueless I used to be, I now see things much more clearly.” Zhao Qianqian perked up. “Learning is better than not learning. Step by step, I’ll eventually master financial knowledge and use it flexibly!”
—
A week after the surgery, Wang Yan insisted she had recovered enough and refused to stay in the hospital any longer.
After consulting with the doctor and confirming her good recovery, Zhao Qianqian helped her with the discharge procedures.
“The doctor said to return for a check-up in a month,” Wang Yan mentioned casually. “After that, follow-ups every six months. If there’s no recurrence, then I’ll be fine.”
“That’s a relief,” Zhao Qianqian felt much more at ease.
Wang Yan brought up an old topic again. “Once I’m fully recovered, I’ll go work as a cleaner. It’s 2,500 a month, with weekends off. The job is light, and there’s no better option!”
“Why are you talking about this again?” Zhao Qianqian grew exasperated. “Didn’t we use the insurance card for the medical expenses? The savings haven’t been touched!”
“You’re not getting any younger. It’s time to start preparing a dowry,” Wang Yan calculated for her daughter. “Your salary is just enough for your own expenses. I have fixed monthly costs of 2,000. If I find a job, I can save 3,000 a month, which is 36,000 a year. In three years, that’s enough for a dowry!”
“Retirement pensions are low, and I can’t save much each year. While I’m still young, I’ll work a few more years to save more. That way, your dowry will be substantial, and you won’t be looked down upon by your in-laws after getting married.”
—
About Commercial Insurance
[Commercial insurance is complicated and hard for most people to understand.]
[If you want to buy it, stick to the basics.]
[Prioritize health insurance and accident insurance—they’re affordable, costing only a few hundred yuan per year. Consider critical illness and life insurance as needed.]
—
About Money Market Funds
Money market funds are a type of open-ended fund that mainly invests in bonds, central bank notes, repos, and other short-term financial products with high safety. They are also called “quasi-savings products.”