We’ve all heard at some point or another that Japan, particularly Tokyo, is a very expensive place. The country is crowded, there are limited local resources, and it’s quite developed – all of which usually result in a high cost of living. But is Japan really as expensive as they say? Several factors have to be considered before answering: rural vs. urban living, income to expense ratio, one’s own personal lifestyle and spending habits, etc.
I myself live in a very small industrial city called Kamisu, which is located in Ibaraki prefecture about 70 miles (110 kilometers) east of central Tokyo. There’s not a whole lot to do in a quiet place like Kamisu, which is one of the biggest reasons it’s cheaper than flashy Tokyo, where the sky’s the limit in terms of things to do. When there’s not much to do, it’s harder to blow your money. Yet surprisingly, certain things in Kamisu are just as expensive as in Tokyo.
In this cost of living guide, I will tell you how much I’ve made vs. how much I’ve spent in my first six months of living in rural Japan. I will break my report down into several categories – income, the tax man, rent, utilities, eating in, dining out, the gym, transportation, entertainment, and shopping. After reading this report, you should have a pretty good idea of whether or not living in Japan is something you can afford. Let’s get started.
As of February 15th, 2016: 1 USD = 114 JPY, 1 EUR = 128 JPY, and 1 GBP = 165 JPY.
My income is quite simple. I make a gross salary of 250,000 yen per month, which means I make 3,000,000 yen per year. Bear in mind that this is my gross salary, which means this is what I make BEFORE taxes or other governmental “obligations” are deducted from my pay. For someone like me in my late twenties, this salary is considered very middle of the road in rural Japan. No one’s impressed by my salary, but no one considers me poor either.
For what it’s worth, my current employer offers an annual raise of 5,000 yen per month, and this caps out after five years of working for the company. In other words, after I’ve worked with my employer for one year, I’d be making 255,000 yen per month. And after working for them for five years, I’d be making 275,000 yen per month, which is the maximum I could possibly make from them in my current position.
My company also offers a “payout” at the end of each working year for any sick/contingency days that employees didn’t use for that year. The maximum you can receive in total for those days is 50,000 yen per year. That’s a negligible amount, so I’m not factoring it in to this cost of living report. There are also opportunities to make extra income from working overtime, but once again, that’s not common and the amount is negligible. So all in all, it’s safe to say that I make 250,000 yen gross per month.
The Tax Man
I’m back in the developed world after a nearly six-year hiatus, and the big downside to that is the strong arm of the local tax man. And what a big arm it is in a country like Japan! The four primary taxes/fees I have to pay to the government are income tax, unemployment insurance, social health care, and a forced pension.
Income tax can vary quite a bit depending upon where in Japan you live. I’ve been told by multiple sources that the local income tax here in Kamisu is quite low. I’ll take their word for it. The average amount I paid per month over six months is 6,262 yen.
The next one is unemployment insurance, which is admittedly a negligible amount. Over six months, the average I paid per month is 1,274 yen. Whether or not this would actually cover me in the unlikely event that I found myself unemployed in Japan, I have no idea.
Next is social health insurance, which doesn’t come out of your salary automatically. Rather an envelope filled with payment vouchers is sent to your home each year, and you’re supposed to take one of those vouchers to the local convenience store each month to pay your dues for said month. Since it’s mandatory that you pay for this social health insurance, I don’t see why the government doesn’t just deduct it automatically from your salary like they do with both the income tax and unemployment insurance. This health insurance costs me a total of 18,000 yen per year, which is an average of 1,500 yen per month.
It should be noted that this insurance covers both me and my wife. However, I’ve been told by multiple foreigners that the price of this health insurance is going to skyrocket upwards after my first year of living in Japan is up. I was quoted figures of anywhere from 7,500 to 20,000 yen per month. This terrifies me, and I can only vainly hope that this doesn’t come true. And just in case you were wondering, this health insurance is 100% non-refundable. You will NOT receive any of it back for never using it or for leaving Japan. What the insurance actually covers in the event that I need to see a doctor, I don’t know, and hopefully I’ll never have to find out.
And finally, I saved the most expensive for last: the forced pension. This is basically Japan’s version of America’s Social Security system. This costs me a whopping 15,590 yen per month for something I’m 100% never going to use. And just like the social health insurance, this one isn’t automatically deducted from your salary, rather, you have to take a mailed voucher to the convenience store to pay it each month.
My research has told me that the first few years’ worth of funds that you pay into this pension system are refundable upon your permanent departure from Japan. In other words, if you pay your voucher every month for three years or so, you can receive some or all the money you paid back once you’ve decided to leave Japan for good. However, I have no idea how this refund works, nor do I know what percentage of the money one can actually receive back. I’m skeptical.
Also, Japan and the United States have some kind of agreement to let your monthly pension payment pay into your Social Security fund back home. But of course in that case, don’t expect to be getting a refund if you ever decide to leave Japan for good.
So once all of these tax man expenses are added up, they come to a total of 24,626 yen per month, or just under 10% of my gross monthly income. That sounds low, but it feels high coming from countries like China and Thailand. And these expenses are only going to get more expensive with each passing year. I’m left with 225, 374 yen for the month before I’ve even done anything.
My apartment was found for me by my employer, but I have to pay for it myself. It’s a townhouse, meaning there’s both an upstairs and a downstairs, with the bedroom and bathroom downstairs, and the living room and kitchen upstairs. It’s 506 square feet (47 square meters) in size, and it feels spacious enough for two people to live comfortably, but it’s still quite small by Western standards, especially considering I’m living in a very small city. Nonetheless, it’s the best apartment I’ve had in six and half years of living in Asia.
The apartment rent costs me a total of 63,320 yen per month, and that amount can be broken down into a few subcategories. The monthly rental charge is 54,985 yen. The rental/support fee is 1,104 yen. The maintenance fees are 2,000 yen. The fire insurance fee is 479 yen. And the parking fee is 4,752 yen. It should be noted that rarely are prices in Japan all-inclusive. Similar to Thailand, you’re “nickeled and dimed” for every little thing. After accounting for my rent, I’m left with 162,054 yen for the month.
Of China, Thailand, and Japan, there’s no doubt that my utilities are the most expensive here in Japan. I’ll break my utilities down into the following subcategories: electricity, gas, water, telephone, internet, and TV.
Electricity is the utility expense I have the most control over, so I’ll start with it first. I run my air conditioner/heater any time I’m home, particularly overnight. When I’m at work, it’s always off. I ran a place fan in the summer, and I occasionally run a place heater in the winter. I also have two desktop computers running pretty regularly, one of which is hooked up to a medium-large LCD TV. I also have a medium-small fridge that’s running at all times. Other than all that, I don’t have many other notable electrical appliances consuming power. Just the basics. My average electricity bill has been 4,146 yen per month.
My apartment depends a lot on gas, particularly the hot water and the stovetop. My wife and I cook 90% of our meals at home, and we both take a hot shower each day. Not much else to say. 4,818 yen per month.
Next is water, which is pretty straightforward. As I just mentioned, my wife and I both take a shower each day. We always flush our toilets. We wash our hands regularly. We also wash our dishes after every meal. Typical water usage. 2,263 yen per month.
My telephone expense actually consists of two different bills. One is for my 4G data, and the other is for voice calls. I’ll save myself the hassle of explaining why I pay two different bills. Simply put, Japanese cellular carriers are a greedy and archaic bunch. My 4G data SIM card allows me to use 2 GB of data over a three-month period. Yes, the 2 GB of data has to last me for the entire three-month period. This SIM card costs 3,600 yen total, which comes to 1,200 yen per month (3,600 yen divided by three months). My voice package, provided by Japanese telecom company “au,” costs me 1,000 yen per month. So I pay 2,200 yen total per month for all of my telephone expenses. Note that I don’t have a landline phone set up in my apartment.
I’m finally given a small break when it comes to my internet bill, as internet is included free of charge with my apartment. My internet is lightning fast too, easily the fastest I’ve ever used it Asia. I’ve never had any problems with my internet connection, so of course I’m very happy with my current internet situation, something I never could’ve said about my internet connections back in China and Thailand.
And finally we have TV. Even though I literally never watch any kind of local or national TV programming in my household, I’m still required to pay a monthly fee of 1,250 yen to NHK. This situation is pretty much the same as the TV situation in England, where people must pay a small mandatory fee to the BBC, regardless of whether or not they actually watch any of their programming.
Once all of these utilities are added up, I paid an average of 14,677 yen per month over a six-month period. I’m now left with 147,377 yen for the month, and I haven’t even eaten yet.
This is where it starts to get tricky to try to pin down a certain amount for the month, seeing as I never pay the same for any one trip to the supermarket. When it comes to my diet, I try to eat a mostly healthy, low carb, high protein, and high healthy fats kind of diet. I exercise and lift weights regularly, so eating right is essential for my lifestyle.
I go to the supermarket roughly twice a week, seeing as I only have enough fridge and cabinet space for a few days’ worth of food. My grocery list mostly consists of the following: salmon fillets, chicken breasts and thighs, eggs, tofu, cooking oil, whole wheat noodles, fat-free yogurt, muesli, avocados, carrots, spinach, sweet potatoes, kimchi, pears, nuts (peanuts, almonds, and cashews), chikuwa, bite-sized cheese, dried squid, diet cola, and green tea.
Instead of listing the price of all of these items one by one, I’ll just say that I spend roughly an average of 4,500 yen per visit to the supermarket. And seeing as I go to the supermarket about twice a week, that makes nine trips in one month (4.5 weeks times 2 visits), which comes to a total of 40,500 yen spent on groceries in one month. Of course that number can fluctuate greatly, but I think it’s a safe average. Keep in mind that this is just the cost of my groceries (it does not includes my wife’s). I’m now down to 106,877 yen for the month. At least I’ve got some food in my belly now.
I don’t dine out very often. Don’t get me wrong, I actually love dining out, but the dining options available to me here in Kamisu are pretty bleak. It seems like 90% of the restaurants here belong to national franchises that I don’t particularly care for, but that’s a story for another time. I mostly find myself eating at sushi restaurants, Indian restaurants, the occasional buffet, and yes, even fast food franchises.
In an average week, I dine out maybe two times, or sometimes three if I’m in the mood. Let’s just play it safe and say that I dine out 2.5 times per week. Without fail, it seems like I always manage to spend at least 1,000 yen on any meal, but I rarely pay more than 1,500 yen for any one meal. That makes an average of 1,250 yen per meal. Note that this is the price for one person. So if I dine out roughly 11 times in one month (4.5 weeks times 2.5 meals), that comes to a total of 14,063 yen for the month. I’ve been well-fed by now, and I’m down to 92,814 yen for the month.
I’m thankful that I’ve got a really cheap and nice gym here in Kamisu. It’s small, humble, and no frills, but it’s got pretty much everything I need – a squat rack, a benchpress, and plenty of barbells and dumbbells. The gym is located in a government-funded community center, so the gym fees are mostly subsidized. I only pay 50 yen per entry, which covers me for one hour, and that’s all I really need. Each subsequent hour costs an additional 50 yen. I go to the gym four times a week, which is a weekly cost of 200 yen and a monthly cost of 900 yen (4.5 weeks times 4 entries times 50 yen). Not bad at all! I’m now down to 91,914 yen for the month.
Living in a rural place like Kamisu, you’re really really going to want to have a car. You don’t technically need one, but let me say this: I would never consider living in Kamisu without a car! The public transportation here sucks, and the city is a bit too spread out to rely solely on a bicycle. There are also no metro or train stations here, but there’s one in nearby Kashima and also one in nearby Itako. Luckily there’s a bus here that can take you to Tokyo Station in Tokyo for 1,830 yen per way, and the ride is only one and a half hours long.
I’m fortunate that my company provides me with a car, but unluckily, they dock me 10,000 yen a month for it. My car is an ’06 Mitsubishi Minica, which gets about 50 miles per gallon (4.7 liters per 100 kilometers). Naturally, I have to fill the car up with gas every so often, but luckily most of that expense is covered by my employer. I fill up my car about every 10 days, and each time I fill up it costs me an average of 2,500 yen. I’d say roughly half of that expense is covered by my employer. So that leaves me with a bill of 1,250 yen per fill up. And since I fill up about three times per month, that comes to a grand total of 3,750 yen. Once you combine the monthly car fee with the gas money, that’s a total expense of 13,750 yen per month. I’m now down to 78,164 yen for the month.
Bluntly put, there’s not a whole lot of entertainment to be had in a small industrial city like Kamisu. Usually the best entertainment here is free. When I want to get out and do something, I usually just drive around and try to find something to photograph. I might occasionally go to the local arcade, hit a few at the batting range, or have a drink somewhere, but I don’t do any of these things very often. There’s some nightlife here, but it mostly consists of izakayas (small Japanese-style bars) and hostess bars, neither of which am I interested in. There are also countless pachinko parlors here, but I’m certainly no gambler. Spending the weekend in Tokyo is usually a far more entertaining experience, but I don’t do that often, or else I’d have nothing left to save. A safe figure to put down for entertainment would be 5,000 yen per month. I can enjoy the simpler (a.k.a. “cheaper”) things in life. I’m now down to 73,164 yen for the month. Not too bad considering I’ve done everything for the month except shop.
This category is the hardest of all to pin an exact figure on, so that’s why I saved it for last. No two people are going to have the same shopping habits. Heck, I don’t even have the same shopping habits from one month to the next. I guess somewhat fortunately, Kamisu makes up for what it lacks in restaurants by having a decent amount of shopping choices. My personal favorite places to shop at are HARD OFF, WonderREX, and Kanteidan, all of which are stores specializing in second-hand items. I also do quite a bit of shopping on Amazon.co.jp.
Once again, I’m not going to try to put a figure on every single item I’ve ever bought here, rather I’ll just give you a rough guesstimate of how much I spent on shopping each month. I spend anywhere from 15,000 to 30,000 yen a month, which is an average of 22,500 yen. Once month I might buy a bicycle, the next maybe a lens, the next some clothes, or the next maybe a part for my computer. It varies greatly.
So after everything for the month is accounted for, I’m left with 50,664 yen per month to save or to do whatever with. Considering I have a decent apartment, I eat very well (at home mostly), I have a car to get around, I keep myself as entertained as I can, and I can buy a few personal items every month, I’d say 50,664 yen leftover is not that bad at all. That’s a total of 607,968 yen per year. Also consider that I’ll supposedly get most of the money I’ve paid into the pension system returned to me once I leave Japan for good in a year or two. That should add up to quite a bit.
I think I’ve made it quite clear that saving money in Japan, or at least in rural Japan that is, is very possible, even without trying all that hard. But on the other hand, I’ve also met a few foreigners out here in Ibaraki who haven’t saved a single yen in over five years of being here. We more or less make the same salary, so not everyone is capable of saving. The best ways to make your money disappear fast here would be to make frequent trips to Tokyo, or to take on a nasty smoking, drinking, or gambling habit. But with a bit of self-discipline, it’s really not all that hard to save here. If I can do it, I don’t see why anyone else couldn’t.
(All figures are monthly averages.)
Gross Income – 250,000 yen
Income Tax – 6,262 yen (2.5%)
Unemployment Insurance – 1,274 yen (0.5%)
Health Insurance – 1,500 yen (0.6%)
Pension – 15,590 yen (6.2%)
Rent – 63,320 yen (25.3%)
Electricity – 4,146 yen (1.7%)
Gas – 4,818 yen (1.9%)
Water – 2,263 (0.9%)
Mobile Phone – 2,200 yen (0.9%)
TV (NHK) – 1,250 yen (0.5%)
Eating In – 40,500 yen (16.2%)
Dining Out – 14,063 yen (5.6%)
The Gym – 900 yen (0.4%)
Car – 10,000 yen (4%)
Gasoline – 3,750 (1.5%)
Entertainment – 5,000 yen (2%)
Shopping – 22,500 yen (9%)
Total Monthly Expenses – 199,216 (79.7%)
Income Remaining – 50,664 yen (20.3%)