[Column] Can Spending Habits Change Overnight?

[Asia Economy Reporter Jang Sehee] "Next month, I won't even do my hair, and I'll only buy two sets of clothes..."

Around the 20th of every month, I experience an empty bank account, known as ‘teongjang’ (empty account). After deducting fixed expenses such as loan interest, various insurance premiums, communication fees, and maintenance fees from my salary, the remaining money is about 400,000 won. Since becoming an office worker, my spending habits have grown; I only look at branded clothes and get my hair done at famous salons. Even though my income has increased compared to before, my spending exceeds my earnings due to higher standards.

Although I clearly set income and expenditure plans at the beginning of each month, my household ledger becomes useless as I inevitably record a deficit at the end of every month.

Is government spending any different? It is no different from an individual's spending pattern of "let's just spend first and see." Due to pouring finances since the early days of the Moon Jae-in administration, national debt has increased over five years. The national debt increase over five years reached 408 trillion won, more than double that of the previous administration. Nevertheless, the government emphasizes that the deficit in the national budget will decrease next year due to increased revenue from economic recovery. They plan to spend now expecting future income, even though the money has not yet come in.

Instead, starting from 2023, when the new government drafts the budget, they decided to lower the total expenditure growth rate to below 5%. Since it is impossible to reduce it now, the responsibility is passed on to the next administration. The Ministry of Economy and Finance has also expressed that this is impractical.

Managing government spending, with 51 million dependents, is inevitably more difficult than managing personal finances. The scale is large, and there are many stakeholders. Ultimately, increasing budget projects must be cautious from the start. They promised to re-examine from a zero base and to implement bold expenditure restructuring. Since spending has increased, if expenditures are drastically cut, the shock will inevitably be greater. That means it is difficult. Personally, even saving 40,000 won out of 400,000 won is not easy. Spending habits do not change overnight.

This content was produced with the assistance of AI translation services.