Wednesday, January 26, 2011

Don't lack the (financial) discipline!

For someone like me, owing tens of thousands of dollars in student loans, working in Japan has its advantages. The exchange rate has been quite favorable for a while now, with the the dollar valued at only around 80-85 yen in recent months. Compare that to the standard $1 = 100 yen formula that for years most American ex-pats have adopted for simple mental accounting calculations. Small wonder it's been relatively easy to keep up with my payments.

I find, however, that the nature of Japanese currency also helps me save. One of the easiest ways to save money, I find, is to collect coins. When I first arrived in Japan, I was inundated with coins. In America, you have four standard denominations: pennies, nickels, dimes, and quarters. In Japan, though, six are used: 1, 5, 10, 50, 100, and 500-yen pieces. So as you might imagine, you get a lot of change. This is especially true considering that Japan is still a mostly cash-based society. Credit cards aren't the norm. What can one do but get an adequately large jar?

Once I realized the futility of trying to spend all my coins, I got a couple jars. First, I decided not to spend 500 yen pieces unless absolutely necessary. That means every time I spend less than 1000 yen (the smallest bill denomination), unless I'm paying with small change (rare), my change includes one 500 yen piece. As soon as I get home, this is dumped in a jar. Over the course of about half a year, I managed to save about 120,000 yen this way (almost $1,500). It's roughly the same as never spending $5 bills.

If you're looking to save some money and maybe want to challenge yourself, I highly recommend this practice. Get a jar or some other container and start putting aside all your 500 yen pieces (or $5 bills). You can do this indefinitely, but it also works well if you want to save up for a certain period of time in order to buy something. A friend of mine saved for about half a year and collected enough to buy himself a MacBook that he'd been wanting.

It takes a bit of discipline, but after a while it will become habit. Now I cringe a little inside whenever I see someone spending a 500 yenner, no joke. I'm loathe to use them, and don't do so unless I'm in a pinch with no other cash.


  1. Wow - that's amazing! I wish I had done that from the beginning. For the last few months I have been budgeting, rather than saving. I found I was spending so much money in the convenience store etc. But now I limit myself to 1000 Yen a day for everything. So, if I need something like toothpaste even, that has to come from my 1000 Yen. It's really helped me to save a lot!

  2. Yeah! I don't specially save the other coins, but I do keep a jar full of the 1,5,10,50, and 100 yenners, too. Every few months I deposit the jar and it's usually around 20-30,000 yen. It really adds up.

    Budgeting is great if you can stick to it! Unfortunately that's one of my weaknesses...after a long day at the office, I'm often willing to rationalize unnecessary spending to myself. "Do I really need this beer? No, but it'll make me feel better. Mental health is pretty important, isn't it?"

    But I should really consider at least making a rough budget for the coming months. Thanks for idea, HG!

  3. Amazing, I thought I was the only one who did the 500 yen saving trick. It's random enough so that it doesn't feel like hard work to save it but you end up saving so much that it contributes real value to your bank balance.