Do you need to be rich to live in Japan?
You might have an image that everything in Japan is expensive and that you need a lot of money to get by around the country. There are numerous articles about how expensive Japanese fruits are, and how small of an apartment you get with a lot of money. While some aspect of this is true, it is not accurate to say that you need to be rich in order to live in Japan.
In this article, we will bust the myth that everything is so costly in Japan and that only a selected few can live in Japan. Also, if you are planning on working in a Japanese company, we will give some tips on how to cut down on your expenses.
Why do you think Japan is expensive?
First of all, why do you even think that everything is expensive in Japan? Well, the most obvious reason is coming from the image of the Bubble era. In the 1980s Japan experienced a major economic bubble, especially in the real estate department. Even the average level income salaryman would all consider investing in land, just because the price of land kept on skyrocketing. Just to show you how much hype there was in Japan, you can look at the graph from Nippon.com below.
Here, you can see that the “Commercial Land Price Index for Six Major Cities”, nearly increase by 10 times from 1971 to 1990. According to a paper released by the “Japan Investment Advisers Association“, during the bubble, “The 23 wards of Tokyo could buy the entire United States, and the Imperial Palace alone could buy the state of California.” This fact shows you that Japan was indeed a very expensive country to live in especially if you had to find housing.
However, after the crash of the bubble, the hype calmed down and the prices of housing and all other commercial goods have gotten significantly lower. According to the graph by Nikkei Asia below, “Tokyo condo prices are approaching 30-year highs”. This means that for nearly 30 years condo prices have never come back to the level of the economic bubble period. This lost period, especially from 1990 to the 2010 era is called the “Lost Decades of Japan”, because of economic stagnation.
How do you save money living in Japan?
Now there are two ways to accumulate wealth in Japan. You either save up money or make money. Now saving money is much easier than making money, so we will explain how to do that in this article.
The pie chart below is taken from なるほど統計学園(Naruhodo toukei gakuen) and it shows the household budget survey data taken from the Ministry of Internal Affairs and Communications. The chart displays the percentage of how much each component makes up of an average households’ annual budget in 2019. (Households with more than 2 people residing together) If you look at the blue part which is the food section, you can see that it takes up about 1/4 of the budget.
How to cut the food budget
An easy way to cut this is to go to a discount store such as 業務スーパー(Gyoumu super) or buy products that are discounted right before the supermarket closes. (usually, if you go around 6 PM, you can get groceries at about 20% ~50% OFF of the original price. However, if you go around 7 PM ~ 8 PM all of those will be sold out. So go buy groceries between 6 PM ~ 7 PM, a.k.a golden time)
How to cut travel and telecommunication budget
Next, looking at the orange part, transportation and telecommunication fee amounts to about 15%. It is a known fact that Japanese telecommunication fees are significantly higher than in other countries. Therefore, you should consider MVNO which is short for Mobile Virtual Network Operator. For transportation, use an app to get on and off the train such as Suica, Icoca, PASMO. This will save you a couple of yen each time you travel by train, then actually buying a physical ticket.
How to cut furniture budget
For furniture, use ジモティー(Jimoty), this is like a Japanese version of craigslist. Usually, you need to go pick the item up, so you would be needing a car. However, there are a lot of items out there listed for free, so ask a friend to give you a ride. (Or you can always use the rental car.) You can also look at Mercari, as well.
How to cut electricity and internet budget
There are numerous ways to cut your electricity and internet bills, but this is not recommended for multiple reasons. First, you should choose a reliable service because any glitch with the electricity or internet may cause you serious damage. Second, if you are unsatisfied with the service it is hard to cancel in the middle because they will charge you a cancellation fee. Therefore, you should go with a major internet service provided by Softbank, NTT, au, or a major electricity service provided by TEPCO or KEPCO.
How to cut the housing budget
The average 20 square meters apartment in Tokyo is about 50,000 yen ~ 100,000 yen a month. If you live alone 20 square meters might be enough for you, but if you live with more than two people you would at least need 30 square meters, and that will usually be over 100,000 yen a month. A tip for anyone looking for an apartment in Tokyo is that you should look for an apartment that is less than 1/3 of your monthly income. So if you make 300,000 yen a month then you should find an apartment that costs less than 100,000 yen a month. (If you go to real estate agents, they will usually suggest your apartment based on this 1/3 rule.)
Saving about 20% of your monthly expense
If you follow the advice above, you can easily cut down 20% of your monthly expense. When you consider that you don’t really have to pay a medical insurance fee (only pay 30% of the original consultation and medical expenses, when you go to hospitals) you can actually have a decent life living in Japan. You can use your saved up money for pleasure and travels, or just save it in your bank account or use it to invest.
