Tuesday, 31 May 2016

How to Live on a Student's Budget

Screenshot from Straits Times
I saw this article on Sunday, and my first thought was "this is wayyyy too simple. What's the use?" But then, I consulted my cousins, who are the voices of reason, and they reminded me that everyone goes through this.

Which is true, because I've made plenty of budgeting mistakes. So I thought I'd share the lessons learnt these past four years and a few tips (which will probably Japan-specific).

Oh, and this is not a "how to live cheap" thing because the extreme is really bad for your health (and the other extreme is bad for your wallet). It's how to live "sane" and for me, sane = being able to afford the nice stuff occasionally without feeling guilty about spending money.

Background/Current Financial Situation

I receive about 117,000 yen a month from the government. This doesn't include my school fees, which are paid separately. My parents pay for my phone bill, because when I went to sign up, I forgot my health insurance card and couldn't use the bank deduction account. Apart from that, I pay everything out of my allowance.

I do some part time work teaching English, although that has dwindled to one lesson a week (sometimes not even that) and the occasional lesson.

And this is the part that I'm proud of: until this year, when I started shukatsu, I didn't have to ask my parents for money for trips within Japan, purchases, rent etc.

What they paid were: phone bill, plane ticket home, and hotels/travel expenses IF they were here with me. (So trips with friends are self-paid)

Lessons Learnt/Tips

I have no idea how valid these tips are, but they're what work for me. Some may not even be useful outside of Japan, but... I'll start from the big stuff and work my way down.

1. Golden Rule: Money Coming In > Money Going Out (most of the time)

This is super super basic but... Just to set the stage. Because I haven't been as aware of this as I have been lately.

And by the way, I think it's fine if the arrow points the other way now and then, if you have savings. Just not all the time, because it's unsustainable.

2. Remember to save up for the big expenses.

For me, big expenses aren't trips. They're things like: Moving, Starting Uni and Shukatsu, which takes a lot of money. (Especially things like key money for apartments and flights to see the apartment and stuff)

And while I did save up for moving and the start of uni (including getting a new computer and iPad), I totally forgot about shukatsu, which is why my financial situation isn't the best right now. I still have some savings, just not a lot.

Speaking of savings...

3. Have a 'buffer level' of savings

I don't know about everyone, but I have this minimum level of savings that I need to have in order to be at ease. The magic number for me is 300,000 yen, or about three month's savings.

So whenever my bank balance goes near that number, I start getting antsy. And because of all the trips and suits and buying take out due to shukatsu, it's now permanently below my comfort zone, which is why I've been obsessing over my lack of savings recently.

This is why I will probably change some money when I go back, so I can top up my bank account here.

And it does sound quite unreasonable, now that I write it down, but I really do think that having this buffer is the main reason why I didn't go broke during March and April.

4. Splurges should not cost more than 30% of my savings.

I believe in spending on nice stuff, which is quite obvious from my Dayre (snacks, tea with friends, etc).

But for major purchases, I follow the advice from my dad, which is to make sure that I don't spend more than 30% of my savings. So if I'm wondering whether to go to Tokyo for an optional conference, I check my bank balance first and then decide. Up till recently, it was almost always a yes. Now it's a 'barely yes' XD

5. The most lucrative part time job is probably teaching, but getting jobs and keeping them can be quite hard.

The 'most lucrative' aspect may be only for Japan, but even in Fukuoka, what I make per hour of teaching is about twice of what most other students make. (And ok, can't say about 'most ' either, but it's the most out of all I've seen). So if I have about three students, I more or less earn enough money to buy groceries for the week.

But (and there's always a but), I find it hard to keep students. Probably due to my teaching method, since other people don't have this problem?

But out of my three students, two moved away. And I rejected two after a few lessons because they made me uncomfortable, and I'm not willing to take that in exchange for money 🙅🏻

So... Yeah, if you have students that you get along with, try your best not to disappoint them.

6. Learn to cook, even if you have to take a cooking class.

Cooking at home really is cheaper than buying from the conbini, and a lot healthier. And yes, you can get the pre-marinated meats from the supermarket at comparable cost, but do you really want to be dependent on what the supermarket decides to prepare?

Spend a little and learn the skill of cooking. If someone as lousy as me can do it, anyone can.

7. Learn how to use Point Cards, and only get the ones that you'll use

Ok, I clearly fail at the latter half of the point, but it's still valid! In Japan, point cards are very big, and for a good reason! These are the point cards(out of the many I have)/point systems that I find most useful:

- Supermarket cards (2)
- Yodobashi
- Gindako
- Amazon points
- Rakuten points

Aaaand, I think that's it. I have like 20 cards though, because I'm bad at saying no. But luckily I don't tend to spend because I have a point card (unless it's Magnolia bakery).

But basically, the above points can be used as cash, which is way useful. And while you're using them, find the best ways to get as many points as possible.

For example, Gindako has a double stamp system for days ended with 8 (and rainy days, I think? I went on a rainy + 8 day once and got like 4 stamps). So obviously, if you're craving Gindako, you should go on the nearest day that ends with 8 (which comes three times a month, and anyway you shouldn't be eating more than that because it's ex).

Or take the supermarket, which has 10x points for above 2000 yen purchases on Wednesday. So guess when I choose to buy rice? Or when I get the 500 yen discount, I get an extra 50yen off if I choose to use it on Tuesday - so I do.

Stuff like that may seem small, but it does add up. For example, my IH stove was 'free' from Yodobashi because I paid for it with points. Or in times of need, I use the Amazon/Rakuten points and give myself a 'discount'.

Oh, but the one card I don't understand is the f-joy card. I haven't found out how to use the points yet ._. And I actually have quite a few points on that card.

8. Unless you live with people, Costco is not going to save you money

I had a Costco membership for one year, and while I loved the pomegranate vinegar, chips and brownies there (not to mention the cheap hotdogs), it just wasn't worth my while. It costs about 800 yen for a one way trip, and because I'm buying for one, I couldn't get any perishables. So I was penny-wise pound-foolish and ended up eating unhealthily.

And what I've realised is... If you don't buy many snacks, groceries from the supermarket aren't that expensive. One of my friends keeps it under 10000 yen a month. I'm not there yet, but if I'm not buying omiyage home, then I average 12000 yen a month (or about 3000 yen a week) for expenses - not including the point discounts. That tends to bring it down.

Considering that Hotto Motto (bento place) costs at least 400 yen per meal, one week would be between 2000-4000 yen (depending on how many times I have lunch at home). And I'd still have to buy my oatmeal and milk and bread and all that ('all that' is actually at least half of my 3000yen/week haha), so eating in is much cheaper.

... Ok, the main point was "you don't need Costco if you live alone", but the latter half emphasises point 6 hahaha.

9. The 100 yen store is your friend

Yes, I totally get the quality argument, and perhaps it's valid, but for things like bathroom cups, drainage netting, rubbish bags, dustbins, etc I think the 100 yen stores are perfectly fine.

Although I would caution against getting cooking utensils there - I have heard that those melt when exposed to high temperatures. I guess for stuff like that, it's probably safer to spend a bit more to be safe.

10. Take Note of the Shopping Seasons

Luckily for me, I live close to an outlet mall (although I very sadly will have to move next year). But this does mean that for better or for worse, I'm aware of the biggest discount seasons. As far as I can recall, it's Golden Week, Obon (the Japanese version of our 7th month, only that it only lasts a week) and Christmas. Plus the first day of New Year. These are when the discounts are the biggest, though it's still ex compared to the online shops.

Oh, and if you don't mind not picking the colour, it's probably cheaper to get a coat from the fukubukuro (lucky bag) on Jan 1st. I find it much cheaper than even the sale price.

Fukubukuro's are also a good way to get things for cheaper (not cheap, because shopping in Japan is normally quite ex). Just make sure you like that brand and it should be safe to buy. Or to put it another way: there's a shop where the pieces are hit and miss. I don't buy fukubukuro from there.

Second Biggest Lesson: Your Financial Situation Will Change and You Better Be Aware When It Does

Looking back, it's clear that my third year in Japan was my best year financially. I had three students a week, so I had almost no need to withdraw any money for groceries. That meant I could splurge a bit more on things like kimono and finishing school.

But, when it came to my fourth year (last year), the number of students I had was reduced to one. And due to the black Zemi and its frequent nomikai's, my expenditure went up.

If I had been more aware of that, and if I had realised how expensive shukatsu would be, I probably would have been much more careful with my money. And looked harder for more students.

Luckily for me, I didn't make any big purchases like I had the year before, but I did spend a bit too much on snacks and ate out a bit too often (that was when my Gindako craze occurred.)

Result: savings were quite depleted, and I'm trying to rebuild them now, because I'll have to move next year.

Biggest Lesson: Health > Wealth

This should really be health > money, since wealth has a slight different definition but for the purposes of rhyme... Wealth (and why am I such a nerd?)

Anyway, this sounds incredibly obvious, but it took me over a year to realise. Because when I first came to Japan, I was surrounded by people on both extremes on the saving/spending scale (stories on that coming up next) I didn't realise that my own spending habits were really skewed too.

What happened was that there was a talk on how common it was for people to run out of money when they moved at the end of the year, and I was determined not to let that happen to me. Combine that with the fact that I was doing groceries for the first time and... I became incredibly reluctant to spend money.

Mind, this was before I moved to Fukuoka and learnt how to eat vegetables. So my diet consisted mainly of rice, eggs and tofu (and milk). I only got proper food if I ate out, and that wasn't very often.

So yeah, my nutrition was really terrible. I even skipped meals if I ran out of food. Once, I had a boiled egg for lunch because I hadn't replenished the rice and didn't want to spend money at the canteen.

Till now, my friends use "You ate more than an egg, right?" Or something like that as shorthand for "you really should eat a proper meal, and at least tell us if you need food".

Because of that, my gastric got really bad. My aunt visited me once, and after the first buffet lunch in a long time, I had terrible gastric. It was bad enough that I could barely walk and had to stay over at her hotel room.

And in the second semester, I developed gastric flu and ended up having to fly home for medical treatment after the exams. I did see the doctor, but all that did was to give me diarrhoea.

Oh, but I still got a certificate for perfect attendance, because I am a nerd and because I decided it was better be near people in case something bad happened :p

Moral of the story: don't be too stingy. My bank balance was fabulous after that year, but my stomach wasn't.

The Savers and Spenders of TUFS

We're finally at the last part of this long, long post. I don't think I've written something this long since the "I'm going to Japan" post (which might actually be shorter). Anyway, I thought I'd end with some interesting stories of when I was at TUFS.

TUFS is the Japanese language school in Tokyo that I spent a year at. Everyone in my course were fellow scholars (same scholarships), so we each got the same amount of money each month. We also stayed in dorm, where we were responsible for our own electricity bills.

Most people tried to save on electricity because it was the biggest expense. I don't just mean refusing to use the aircon/heater. We had:

A class who brought their phones AND laptops to school to charge every single day. While the school doesn't mind the occasional use, this proved too much and they were asked to stop.

That was pretty mild, though, because I heard of:

A senior bringing his RICE COOKER to class every day to save energy (and I guess save time when it was time for lunch?)

Plus, you know how precious our phones are, right? I had a friend leave hers in the corridor/common area to charge because she didn't want to increase her bill.

I also had one extreme senior who opted NOT to use hot water during winter. According to him, whoever intends to imitate him should be careful not to pass out when the first blast of cold water hits.

Oh, and once, I wondered out loud why the toilets didn't have any refills of toilet paper. Turns out that previous students would just take them to use in their own toilets!

These were the savers of TUFS.

On the other hand, we had people who:

Could spend the entire's month's allowance in three days.

Another once spent most of the month's allowance playing the UFO catcher (at least he managed to win quite a bit).

Hmm... I don't recall any more extreme stories for spenders. I had friends who would regularly be broke and I'd have to lend them money, but it's not as interesting as the savers.

Maybe it's because student life in a dorm is already pretty cheap, so you have to get really creative to save?

Don't worry, I don't intend to be extreme as either side. I believe money is a good servant, but a bad master (although I have to remind myself pretty often).

So while I'm trying to save a bit more, it's not at the expense of my groceries. It's more of cutting down on the snacks and eating out, which has the added benefit of being healthier for me too. So, win-win.

And by the way, if anyone has anymore tips, let me know, ok?