6 multicultural money lessons worth learning
By Matt Alderton
July 24, 2015
Although the concept of money is universal, rituals around it are not.
As international travelers can attest, the world is as wonderful and weird as it is wide. Nowhere is this more evident than in humanity's multifarious customs, which are as diverse as the global cultures that spawned them.
In Greece, for instance, parents throw their children's baby teeth on the roof to bring their family good fortune. In Chile, it's rude to arrive on time. And in China, it's considered morbid to give gifts associated with death or funerals, such as clocks, handkerchiefs or flowers.
Although these customs may seem odd to outsiders, they're rife with meaning that can whisper valuable lessons to those who are willing to listen.
That's especially true of financial customs, according to cultural anthropologist Dr. Bill Maurer, a professor at the University of California, Irvine, and director of the Institute for Money, Technology and Financial Inclusion. “When you look around the world, you can see incredible diversity in kinds of money and in how people use money,” he says. “That can open your eyes to all of the strange and wonderful money practices we have at home.”
Some of those practices, like throwing money into a fountain to make a wish, are innocent, albeit superstitious. Others, however, such as taking on debt to buy things you can't afford, can be extremely harmful. Consider what lessons you can learn from the myriad ways money is handled around the world:
1. Muslim culture
Muslims follow Sharia law. Derived from the Islamic holy text, the Qùran, it governs nearly every aspect of Muslim life — including finance.
“Under Sharia law, Muslims aren't allowed to collect interest on loans,” explains tax adviser Crystal Stranger, an enrolled agent who works with expat clients around the globe, including Middle Eastern countries where Islam is the dominant religion.
“When [the Prophet Mohammad] came to power in the Middle Ages, a lot of people were struggling with large debts because the only loans available at that time were from loan sharks. Many people had their hands cut off, or lost their wives and children to slavery, because they couldn't pay their debts. [Speaking out against interest] was a big way Mohammad could improve the lives of people at that time.”
Under Sharia law, interest, or “riba,” is not paid on Islamic savings accounts, or charged on Islamic mortgages.
…in many places around the world, like rural Kenya, people add into the mix other things like animals, access to land or even kinship relationships … Lots of things can perform the stored-value function of money.
Lesson: Interest payments on credit cards and other loans are an easy way to enter a harmful debt spiral. Before you take on debt, therefore, be mindful of what it will cost in interest over the life of the loan.
2. Chinese culture
In many cultures, money is magical. “Money … is a physical substance, but because you can do so much with it, it also has otherworldly qualities,” Maurer says. “In traditional Chinese religion, there's a practice of buying representations of money — paper bills, paper credit cards, etc. — at a shop, then taking these things to a temple where you burn them. The Chinese believe that when someone dies, they need money in the afterlife to do all the same things we need money to do. So by doing that, you convey those objects of wealth into the afterlife as a way to show your devotion to your ancestors.”
Lucky numbers also are fixtures in Chinese culture. Therefore, cash gifts and bets typically are made in multiples of two, six or eight, which are considered auspicious.
Lesson: Having a meaningful philosophy around money can help you spend it in ways that truly matter to you.
3. African culture
In Africa, money isn't the only “money.” “When you and I think of money, we think of cash and coin, or funds available in an electronic account,” Maurer says. “But in many places around the world, like rural Kenya, people add into the mix other things like animals, access to land or even kinship relationships … Lots of things can perform the stored-value function of money.”
This is especially true in countries with weak national currencies. “In Zimbabwe, a country that's experienced hyper inflation of its national currency, if you wanted to save money you wouldn't accumulate Zimbabwean currency and keep it in a bank. That would be one of the worst things you could do,” Maurer continues. “Instead, you might try to buy a plot of land or a calf — because that calf will grow up into a cow that you can sell, or that you can keep for [salable] milk.”
Lesson: Cash isn't always king. To grow your long-term savings, consider investing in real estate or other appreciable assets.
4. Caribbean culture
Dr. John Edmunds, a professor of finance at Babson College in Babson Park, Mass., once lived in the Dominican Republic. While there, he witnessed the local custom of san. Common in rural cultures around the world, san — called susu in Africa, Chit in India and tontine in Southeast Asia — is the practice of informal community lending.
The practice among Filipinos was to supply you with groceries, bread and so on, and to bill you once a month. You could roll that bill over for 30 days, 60 days — whatever — but once a year on New Year's you had to clear out your debts and pay your suppliers.
“Say 20 people want to buy a car. Each car will cost $2,000 so we all agree to put in $100 a week for 20 weeks. At the end of the 20 weeks, we'll draw lots; whoever draws the first number gets the first $2,000, whoever draws the second number gets the second $2,000 and so on,” Edmunds explains. “You may not get the pot immediately, but you'll get it someday.”
Lesson: Save for a big purchase instead of slapping it on a credit card and paying for it over time, which can be expensive (interest charges add up) and can trivialize its importance. Plus, if you're saving up for something for, say, the entire family, such as a new TV, the whole family can get involved in saving.
5. Scandinavian culture
When she lived in Norway, Stranger discovered the Scandinavian tradition called the “Law of Jante.” Established by Danish author Aksel Sandemose in his 1933 novel “A Fugitive Crosses His Tracks,” Jante (pronounced Yen-tah) Law encompasses 10 social “commandments” that have since spread throughout the Nordic region. The first commandment — “You shall not believe that you are someone” — is typical of the others, which discourages individual overt self-promotion and achievement.
“With Jante laws, talking in terms of profit is considered distasteful … which creates a very different way of looking at money,” explains Stranger, who says Scandinavians frame everything in terms of social relevance: how it is making the world a better place for the collective, not the individual. “Business plans must highlight the social and community benefits and downplay the profitability of an enterprise. This is the extreme opposite of U.S. corporate law.”
Lesson: Restricting purchases to only those for which you or your loved ones have a true need instead of “wants” could help you better manage spending and avoid debt.
6. Filipino culture
Professor Edmunds' father was born and raised in the Philippines, where superstition dictates an unusual New Year's Eve tradition.
“The practice among Filipinos was to supply you with groceries, bread and so on, and to bill you once a month. You could roll that bill over for 30 days, 60 days — whatever — but once a year on New Year's you had to clear out your debts and pay your suppliers,” Edmunds says.
Filipinos believe that whatever your financial state is at the stroke of midnight on New Year's will be your financial state for the rest of the year. Starting the year debt-free, therefore, is extremely important.
Lesson: Eliminating debt today will ensure a more prosperous future tomorrow.