Hanoi Since the summer of 2023, Ms. Thao's family's living expenses suddenly increased by 30% because the rent, electricity and water prices all increased along with the two children going to school.
Previously, they rented a room in Me Tri Ha, Nam Tu Liem district for 3 million VND per month, water cost 30,000 VND per cubic meter, electricity cost 4,000 VND per kilometer. Each month, the family spent about 4 million VND on housing, electricity and water.
After the price adjustment, the rent increased to 3.5 million VND, water 35,000 VND/m3, electricity 4,500 VND/kWh. Food expenses also increased by about 15% compared to before, mainly due to the increase in grocery and gas prices.
"The pressure is even greater when the daughter enters first grade and the son is at kindergarten age," said Nguyen Thi Thao, 35. They wanted to send their children to public school to save money, but without a household registration, they had to spend a significant amount of money. At this time, the total tuition for the two children has increased by three million VND compared to before.
"Before, with a total income of about 18 million VND per month, my family had enough to spend, but since everything has increased, every month we are short of money," Thao said.
People buy food at a traditional market in Co Nhue, Bac Tu Liem, Hanoi on the afternoon of April 6. Photo: Phan Duong
Ms. Thao's story somewhat reinforces the results of the recently published Spatial Cost of Living Index (SCOLI) Report by the General Statistics Office, showing that Hanoi is the place with the most expensive prices and living standards in Vietnam.
Data from the Hanoi Statistics Office also shows that the average consumer price index (CPI) in the first two months of this year increased by 5% compared to the same period last year, in which 8/11 commodity groups had an average CPI increase, such as education increased by 38.33%; housing, electricity, water, fuel and construction materials increased by 5.24%; food and catering services increased by 2.92%; other goods and services increased by 7.38%.
According to Associate Professor Dr. Ngo Tri Long, former Director of the Institute for Price Market Research (Ministry of Finance), even compared to international standards, Hanoi is considered a city with a high cost of living. "In the past two years, real estate prices have skyrocketed, causing everything from buying a house to renting a house and a shop to increase, and prices have followed suit," said Mr. Long.
Meanwhile, Talentnet's 2023 Salary and Benefits Report based on a survey of 638 businesses nationwide shows that although Hanoi is an economic hub of the country, its annual basic salary is 12% lower than that of Ho Chi Minh City, and even 10% lower than other southern provinces.
According to Mr. Long, another point to note is the difference between nominal salary and real salary. Nominal salary is the amount of money that employees are paid by their agencies or businesses every month. Real salary is a physical product that can be received (purchased).
"Prices increasing faster than wages is meaningless, people's lives will be affected, especially the poor, the unemployed, and wage earners whose incomes have decreased after the pandemic," the expert said.
In fact, every time there is news of a salary increase, market prices almost immediately escalate and the salary increase is often not enough to compensate for inflation. Ironically, many families like Ms. Thao’s are not among the group that receives a salary increase.
Since giving birth to her second child three years ago, Ms. Thao quit her job as a supermarket cashier to stay home to take care of her child and sell online because "her salary is not enough to cover the cost of sending her child to private school". Her husband, Mr. Minh, works in construction, but due to changes in the industry after Covid-19, his salary has been cut in half for the past two years, with little work, forcing him to work as a motorbike taxi driver. "We tried to stretch our resources so our income did not decrease, but all expenses increased," the husband said.
Whenever gas prices fluctuate or increase, the couple feels "backed into a corner". Especially since they rent a house, electricity and water are calculated at business rates, so every summer, Ms. Thao just waits for her child to fall asleep to turn off the air conditioner and switch to the fan.
According to a survey by the Institute of Trade Union Workers, in the first half of 2023, the average income of workers reached 7.88 million VND per month while the spending level was 11.7 million VND, an increase of 19% compared to 2022. A report by auditing firm PwC on consumer habits in Vietnam in 2023 also recorded that 62% said they were forced to cut unnecessary spending.
VnExpress interviewed dozens of young families and most said that they needed their parents' support to be able to stay in the capital.
Food for Ms. Thu Hang's family in Ha Dong district was sent by her parents in the countryside on April 7. Photo: Provided by the character
On Sunday, April 7, three families of Thu Hang's siblings in Cau Giay, Nam Tu Liem and Hoai Duc districts gathered at her house in Ha Dong district to divide the food sent by their parents from their hometown.
A few days before, they received a phone call from their parents asking what they wanted to eat and buy for their grandparents to prepare. The result was a 50kg bag of rice and two boxes of food, including meat, fish, eggs, vegetables, and local specialties such as fish sauce, rice rolls, and sour sausage. "Even herbs, chili, and lemon, each family has a bag," said Ms. Hang, 38, from Thanh Hoa.
Hang said that since her siblings got married, her mother had the opportunity to go to Hanoi to take care of her grandchildren and clearly felt the high cost of living in the capital, so she used this method to reduce pressure on her children.
"My mother was shocked when she bought a bunch of Malabar spinach for 17,000 VND, and pig's feet for 110,000 VND per kilo, while in the countryside, two bunches of Malabar spinach cost 5,000 VND, and pig's feet cost 30,000 VND per kilo. A bowl of pho in the city is even three times more expensive than in the countryside market," she shared.
The large difference in prices and expenses between localities sometimes becomes one of the reasons for the trend of leaving the city to return to the countryside. In groups, many people share about the significantly reduced cost of living when leaving Hanoi or Ho Chi Minh City to the coastal areas of Central Vietnam or the Central Highlands.
A family moving from Hanoi to Da Nang in 2023 said they saved more than half of their expenses. The biggest savings were education costs, which were reduced by 70% compared to before, because Da Nang exempts tuition fees, and sending children to extra classes only costs a few tens to a few hundred thousand per month per subject. Food costs were two-thirds of what they had been before.
Or like the family of Mr. Tan Nguyen, 37 years old, who left Hanoi at the end of 2022 to live in Nha Trang, they have saved a third of their living expenses. "If we sent our children to public schools or rented a cheaper house, we would save half. Meanwhile, the food is fresh, cheap, the air is fresh, so the whole family's health has improved, saving a lot of money going to the hospital," the father of three shared.
Associate Professor Ngo Tri Long said that the state's price management goal is always to stabilize prices. Stabilization does not mean being rigid, refusing to change, keeping prices the same, but based on changing environmental factors, input costs will change. Therefore, to ensure people's real wages, it is necessary to ensure material and living conditions, in which salary increase is only one factor.
Second is to come up with appropriate tax and financial policies. For example, with personal income tax, we need to encourage hard-working people, while squeezing workers by imposing high taxes is counterproductive.
Third, one of the most practical solutions is to pay attention to price control when increasing wages, avoiding the situation where wages have not increased but prices have increased. There should be measures to stabilize prices but increase the quality of goods and services.
Personal financial advisor Lam Tuan, a member of the Vietnam Financial Advisor Community, recommends recording all daily and monthly expenses to have a clear view of the family's financial situation, thereby prioritizing spending according to necessity.
For Thu Hang's family, thanks to the chickens and vegetable garden that her grandparents send up twice a month, they only spend about five million VND more on food and groceries each month for four members.
"Thankful for my parents' support over the years, my husband and I still managed to buy a house on installments and raise two children with a small civil servant salary," Ms. Hang shared.
Staying in the city and buying a house used to be the dream of Ms. Thao and Mr. Minh, but in the cycle of worrying about rent, electricity, water, diapers and milk every month, that dream disappeared.
After half a year of living hand to mouth, at the end of 2023, the couple decided to go their separate ways. She took her two children back to her hometown in Hai Hau, Nam Dinh to live with her grandparents, while he stayed in the city. She said that living with her in-laws was not exactly comfortable, but it was easier to breathe financially.
"Since my wife and children came back, I have moved out of the room and lived at the construction site, trying to work a few more years to get some capital to go back to my hometown to build a house," said Mr. Minh.
Quynh Nguyen - Phan Duong
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