Recently, my husband and I have been through a pretty stressful experience related to some elements of the bureaucracy in Japan. All countries have their red tape and rules, of course. The difference in Japan is that the rules are so vastly different for foreign folks compared to the average Japanese person and it can be confusing at best.
If you want to do everything right and get everything straight as a foreign person in Japan, you have to make a concerted effort to find everything out and even then you might fail to get it right. The tendency of most people in Japan due to communication differences is to simply tell you only what you ask to hear rather than enlighten you about an overall situation. If you fail to ask the right question, you may not learn what you need to know.
There are a few reasons for various problems that foreign folks have in dealing with the red tape here. One of the reasons is that most Japanese employees are of a different status than most foreign employees. That is, most are "company workers" and we're considered "temporary workers". The point of making us "temporary workers" is to stop companies from having to fork over the benefits to us that they pay Japanese employees like supplemented health care payments, pension benefits, etc. Since most foreign folks remain in Japan for a short time, I don't have too great a problem with this. Most of them don't really need those benefits or would likely lose any money invested in such systems should they be hooked into them, though I don't think the companies care at all about saving us money. They do it mainly to save themselves money.
The real problem arises because company employees get a wide variety of bureaucratic tasks completely taken out of their hands. For instance, most Japanese people don't file their own taxes or manage their payments. The company's accountant just takes care of the whole thing. When I ask Japanese people about filing their income taxes, most of them have no idea how to do it, when to do it, or what they're even paying. The average Japanese person can offer me no advice on such things. The average American, on the other hand, can tell you plenty about taxes and how they need to be handled and when they need to be paid because the responsibility is equally in every person's hands.
Such is not the case for the vast majority of foreign folks and the people at the companies we work for often do not tell us anything about what we should be doing. The best you can generally hope for is some vague notation with your salary statement that you may owe additional tax and are responsible for paying it, but with no guidance about what those taxes might be above and beyond the income tax you already have paid or how you should go about finding out what they are. Sending newcomers to a foreign country out into the wild blue yonder in search of random taxes to pay isn't really the best way to handle things in my opinion. The fact that the companies know full well what taxes need to be paid and could tell you what they are, where to go to handle them, and how to make sure you are sent the proper bills indicates that they are either too lazy or indifferent to offer guidance or that they don't want you to know about those taxes because the bite out of your paycheck (10%) may make you think twice about working for your current salary. My vote is on lazy and indifferent.
During my first few years in Japan while working at Nova, I was never told that I needed to file an income tax return. I don't even know to date if I could have filed and gotten some of my tax money back or if I owed money, though the latter is almost certainly not so. The issue simply did not exist for me because I was completely unaware of this need. My husband's school, which was a much better place to work, took care of the tax filing for him so I figured this is what all places of employment did. In retrospect, it may have been what Nova did for me, but I have no way of knowing 18 years on. Certainly the idea that I was failing to act properly never even occurred to me.
Foreign folks get criticized a lot for not following the rules, not paying their way, etc., but the truth is that there is no organized system in place to help us do so. You learn piecemeal, if you learn at all. There's absolutely no reason for this to be the case. We're all registered at our local government offices and they have our addresses. They could send us tax forms to remind us that we have to pay, but they don't send them to you until you first file of your own initiative. In other words, you have to first find out that it is necessary and do it of your own volition in order to receive a reminder. If you assume that the company handled it for you (as is so often the case for the majority of people), no one is going to tell you this is even necessary in your particular case so you blithely go about your business. Most foreign folks are not even aware that their cases are different from that of the Japanese when it comes to such things.
The part that aggravates me about this situation is that critics (mostly the "Uncle Tom" foreigners) will state that you can't expect to be treated differently simply because you're a foreigner. The thing is that the problems stem from the fact that you are treated differently already because you're a foreigner. You can't automatically place the vast majority of foreign folks in different working conditions than the norm (the norm being the company handles such things) and then expect them to figure out that they need to do something differently and then criticize them for not doing exactly what the Japanese do (which is nothing). In other words, you can't have it both ways. Either they are treated the same and expected to do the same or they are treated differently and offered guidance to assist them in their particular situation. The aggravating thing is that the solutions are relatively simple, but no one takes responsibility for implementing them. Nobody tells you how to be a good citizen, but they're all ready to get in line and condemn you when you make a mistake and fail to act like one.
Personally, I think the ambiguity is intentional. The government wants your money, but they also want to allow loopholes for certain groups of people. In Japan, they love nothing more than being wishy-washy. This may sound absurd, particularly in regards to taxes, but there is a level on which it makes sense. There are "temporary workers" who are Japanese as well as foreigners. The main difference is that there are very few company workers who are foreign. In fact, lately, the number of Japanese who are seen as temps is growing. These workers are cheaper for companies because they get no benefits and cost the companies less.
The ambiguity likely exists to allow the companies to continue to easily secure such workers because they are okay with working under less than optimal conditions (no security, no bonuses, no benefits) if they can keep more of their paychecks than company employees. It may sound absurd, but Japan is not a country that views contracts and rules of law as something to be adhered to strictly. They view such things as guidelines from which to consider each situation on a case by case basis. One of the reasons Western business and Japanese business often have problems working together is that the Japanese don't view contracts as something hard and fast, but Westerners do. If ambiguity and selective enforcement are seen as having an overall benefit to society, then they are left in place. This can be rather maddening for those of us who are accustomed to having rights and using the laws to let us know where we stand.
(As an aside: I will note that my views spring from the fact that there are some Japanese people who are "temporary workers" who willfully do not file their taxes even though they are aware that they should. I'm told that they don't do it because they are young and don't want to start paying into the pension system yet because they won't benefit from it for decades and that this allows them to avoid paying city and prefecture taxes. (For the record, most of us are taxed accurately or over-taxed on our income taxes so not filing means writing off a possible refund.) This is an entirely different topic, but I think their reluctance to pay into the pension fund is driven by the ridiculously low monthly payments and the fact that paying in more or longer has no impact on your benefits. In other words, they can spend 25 years paying into the system or 50 years paying in and they're still only going to get a flat payment of about 60,000 yen so they don't want to start paying any earlier than they have to.)
Fortunately for my husband and I, our issues appear to have sorted themselves out at this point in time. We won't know for sure for a few more weeks, but I'd say it's 99% sure that everything is okay and that nothing bad will come of the situation I've been stressing out over for the past three days. Being a nervous sort of person, I'm still losing sleep over that 1% though. And having a tendency to construct worst case scenarios, I'm still building mountains out of molehills. Chances are though, that it'll all be okay.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Tuesday, April 7, 2009
Tuesday, October 28, 2008
Fun at the Bank
Yesterday, the CH and I decided the time was ripe to pull the trigger on sending money back to the States. We're attempting to build a nest egg for when we're old and gray and the interest rates in Japan aren't doing much for anyone. If you've never had a Japanese savings account, I'll let you in on the fact that the rates are close to zero.
The way in which we return money is by wiring it home to our credit union. For the privilege, you pay 8,000 yen ($85) and get to park your fanny in the bank for 40 minutes or more. This was the 5th time in 6 years that we did this, though it actually has been about 2.3 years since the last time. Each time, the process changes a little. In fact, each time it has become more troublesome.
The last time we did this, we were quizzed a little about why we were sending the money back. This time, we were interviewed extensively about:
They also asked to riffle through the history of transfers we just so happened to bring with us. That is, they wanted to look at the 4 previous wire transfers documentation. This was weird because they have copies of all of those papers, too, but we gamely went along with it. Even after seeing that every other time we wired the money it was to the exact same account and the exact same bank, they kept scrutinizing the information as if there were something missing.
After much fussing and questioning, we were sent off to sit and wait. No doubt they were performing forensic tests on microscopic residue we had left on the documents or some such. It's interesting to note that we don't have a Japanese ink stamp (hanko) and we were chastised for this when I couldn't recall precisely how I signed my name when I opend my account about 15 years ago. The bank lady said that you don't have to worry about remembering how you signed your name if you have a hanko. We didn't want to sass her, but after we retreated to the waiting area, I mentioned to the CH that, while I couldn't recall precisely how I signed my name, at least no one could steal my signature like they could a hanko. Also, only in Japan am I forced to sign my name different ways. In the U.S., I can sign (first name + last name) all the time so I don't have to remember how I did it as I always do it the same way. In Japan, they keep forcing me to write it in various permutations of (last + first)or (last + first + middle) or (first + middle + last).
At any rate, as we sat there, we noticed a few things. For one, the door to the safe, which is about a foot thick and has one of those big wheel handles you always see in safe cracker scense in movies, was hanging wide open with notices for the staff attached to it with magnets. The fact that this is the area where things are supposed to be secured for their bank patrons and it's just left hanging wide open as an ad hoc notice board doesn't exactly inspire confidence in their security. The other thing we noticed was that all of the women had to wear ugly grey polyester suits with fuschia blouses while the men were just wearing regular suits. Also, the women were in the front and had to deal with customers and the men were all in the back. I'm guessing the men spend their valuable time frowning at important paperwork.
The reason for all of the scrutiny and interrogating is that the banks have to comply with (police's? government'?) requests to keep an eye open for potential money launderers. I've read that this applies if you send back more than the equivalent of 5,000,000 yen or more, though I've heard that some people have been grilled for sending back as little as 10,000 yen when they've attempted to do it through the post office. I can't say for sure, but the banks can't really help having to put you through so much as it's not really their choice. Also, it's not personal nor does it apply to foreigners only, though foreigners are more likely to be affected by it since few Japanese are wiring money to foreign banks.
My advice if you want to send money home is to make sure you print e-statements from the bank you're wiring your money to if you don't have an old-fashioned passbook. Also, take your working contract, business card, or a pay statement that proves your relationship with your company. You also have to have your gaijin card. If you're married and operating from an account with your spouse's name on it, then you also need to take your spouse along. This time we were lucky that the CH just happened to take a folder with some extra documents which they accepted as sufficient proof our our relationship with our credit union. I don't expect that we'll be sending money again any time soon as we pretty much tapped ourselves out this time, but I'm going to go a bit better armed next time.
The way in which we return money is by wiring it home to our credit union. For the privilege, you pay 8,000 yen ($85) and get to park your fanny in the bank for 40 minutes or more. This was the 5th time in 6 years that we did this, though it actually has been about 2.3 years since the last time. Each time, the process changes a little. In fact, each time it has become more troublesome.
The last time we did this, we were quizzed a little about why we were sending the money back. This time, we were interviewed extensively about:
- where the money came from
- why the money was being sent back
- who the money was paid to
- our relationship and history with the bank we were sending the money to
They also asked to riffle through the history of transfers we just so happened to bring with us. That is, they wanted to look at the 4 previous wire transfers documentation. This was weird because they have copies of all of those papers, too, but we gamely went along with it. Even after seeing that every other time we wired the money it was to the exact same account and the exact same bank, they kept scrutinizing the information as if there were something missing.
After much fussing and questioning, we were sent off to sit and wait. No doubt they were performing forensic tests on microscopic residue we had left on the documents or some such. It's interesting to note that we don't have a Japanese ink stamp (hanko) and we were chastised for this when I couldn't recall precisely how I signed my name when I opend my account about 15 years ago. The bank lady said that you don't have to worry about remembering how you signed your name if you have a hanko. We didn't want to sass her, but after we retreated to the waiting area, I mentioned to the CH that, while I couldn't recall precisely how I signed my name, at least no one could steal my signature like they could a hanko. Also, only in Japan am I forced to sign my name different ways. In the U.S., I can sign (first name + last name) all the time so I don't have to remember how I did it as I always do it the same way. In Japan, they keep forcing me to write it in various permutations of (last + first)or (last + first + middle) or (first + middle + last).
At any rate, as we sat there, we noticed a few things. For one, the door to the safe, which is about a foot thick and has one of those big wheel handles you always see in safe cracker scense in movies, was hanging wide open with notices for the staff attached to it with magnets. The fact that this is the area where things are supposed to be secured for their bank patrons and it's just left hanging wide open as an ad hoc notice board doesn't exactly inspire confidence in their security. The other thing we noticed was that all of the women had to wear ugly grey polyester suits with fuschia blouses while the men were just wearing regular suits. Also, the women were in the front and had to deal with customers and the men were all in the back. I'm guessing the men spend their valuable time frowning at important paperwork.
The reason for all of the scrutiny and interrogating is that the banks have to comply with (police's? government'?) requests to keep an eye open for potential money launderers. I've read that this applies if you send back more than the equivalent of 5,000,000 yen or more, though I've heard that some people have been grilled for sending back as little as 10,000 yen when they've attempted to do it through the post office. I can't say for sure, but the banks can't really help having to put you through so much as it's not really their choice. Also, it's not personal nor does it apply to foreigners only, though foreigners are more likely to be affected by it since few Japanese are wiring money to foreign banks.
My advice if you want to send money home is to make sure you print e-statements from the bank you're wiring your money to if you don't have an old-fashioned passbook. Also, take your working contract, business card, or a pay statement that proves your relationship with your company. You also have to have your gaijin card. If you're married and operating from an account with your spouse's name on it, then you also need to take your spouse along. This time we were lucky that the CH just happened to take a folder with some extra documents which they accepted as sufficient proof our our relationship with our credit union. I don't expect that we'll be sending money again any time soon as we pretty much tapped ourselves out this time, but I'm going to go a bit better armed next time.
Friday, September 26, 2008
Cornerstones of Saving — Part 3
(This first paragraph is mainly going to be for the females out there, but it may apply to some progressive and/or cross-dressing males as well.)
Remember your home economics classes where you were taught how to make a pie crust or sew a skirt? Well, maybe that was my class back in the day. I'm hoping that lessons are a little more practical these days. "Home economics" should include learning how to economically run your home, not only how to cook and sew. Both of these are useful things to know, mind you, and I believe everyone should know them, but I do believe understanding how to deal with daily living less expensively should be part of the lessons.
My days often include teaching myself lessons in home economics. For example, I can buy a bottle of pre-made cold tea to serve students in lessons (or myself when I want ice tea) for about 250-300 yen or I can make my own iced tea for 30-70 yen (depending on the type of tea). Making the cold tea myself requires adding water to a pan, boiling it, putting teabags in a jug, adding the water, allowing it to steep and cool, and removing the bags. In terms of my time and attention to the task, we're talking no more than 5 minutes of effort, though it is peppered across across a span of time in tiny fragments. In other words, if I buy that jug of tea, I'm essentially telling myself that it is worth paying a little more than 2400 yen an hour for someone else to make my tea for me (5 minutes is 1/12 of an hour so 12 x the difference between my tea and the cost of the bottle which would be about 200 yen).
Now, if you're one of those sorts who writes blog bits for $10 a post and can whip out one every ten minutes and calculate your time as being worth $60 an hour, then my advice isn't for you. Though, honestly, this whole "my time is worth $X per hour" when considering the value of pursuing a particular endeavor is a pretty big load anyway. It presumes that all effort is equal and that all time is potentially similarly productive or that there is sufficient demand for you work to keep you busy such that you can't spare 5 minutes to make your own tea without sacrificing a moment of precious earnings potential. Also, seriously, I'd rather work less and spend less than work more and earn more. The mental and physical toll of pushing myself to work for more cash is far less than making a pot of tea, but that's really just me.
If you start to do home economics in accord with your lifestyle, you can see where you're making choices to pay someone else to do the work for you and make an informed choice about whether the effort is worth it to you or not. I'm not advocating that people stop buying the things they want or enjoying their lives, but rather that they apply serious thought to their consumption and the real costs of it.
A lot of people find the sort of "nickel and dime" thinking I'm talking about petty and feel that it won't save you an appreciable amount of money. Whether this is true or not really depends on how much you feel you have to save to make it worth your while. When I was living in the U.S., there was a woman who worked at the same halfway house as I who my 22 year-old self used to scoff at because she'd do things like cut up old calendars to use for notepaper. I felt that she was saving the place a few cents and it was meaningless. Similarly, I used to get annoyed with my parents for insisting I turn off the lights all the time when I left the room. I thought they were being cheap and petty. Now, I'm cutting up my old calendars and turning off all the lights.
Since environmental concerns and energy consumption have been something I'm paying attention to more and more, I've found out that these small actions result in meaningful savings. Over the last year, I've discovered that taking showers by intermittently turning the water on and off has reduced my gas bill by about $15-20 a month in the warmer months. Having an air conditioner with low power settings and having two air conditioners (one in the bedroom and living room) and cooling only one room at a time has reduced summer air conditioning expenses by about $50-70 in the hottest and muggiest months.
Over the course of a year, I've discovered that just turning off the lights and television when I'm not using them and showering more efficiently has saved us more than $300 a year in living expenses and we sacrifice nothing in terms of quality of life. All it "costs" is developing new behavioral patterns. That's essentially the cost of a new iPod Touch or iPhone. And it is a real savings. I know what I used to pay and what I pay now. I've saved the bills and done the comparisons. It's not theoretical.
I never crunched the numbers specifically on what other habits we've employed to reduce expenses have allowed us to do because it can get pretty complicated. However, I do scrutinize the cost of home-cooked meals compared to eating out on a regular basis and consider the cost per portion based on the type of ingredients. I mainly do this to dissuade myself from going for convenience over effort as often as possible. For instance, I know making my own chicken pulao costs less than 150 yen per serving whereas going to an Indian restaurant will set me back at least 1000 yen (very likely more) per person. The serving sizes will be bigger, but they will also offer more food than I require and result in waste or overeating. Making chicken pulao also frees me up for the next two evenings as we'll eat leftovers for two additional days.
I know cooking is out of the question for some people as is carefully shopping for cheap food or buying in bulk (which also saves money). I'm not saying what people should or should not do, but rather saying that, if you want to save, you have to start considering the price of convenience. It's very likely more expensive than you realize.
(This is the last one, I promise. ;-) )
Remember your home economics classes where you were taught how to make a pie crust or sew a skirt? Well, maybe that was my class back in the day. I'm hoping that lessons are a little more practical these days. "Home economics" should include learning how to economically run your home, not only how to cook and sew. Both of these are useful things to know, mind you, and I believe everyone should know them, but I do believe understanding how to deal with daily living less expensively should be part of the lessons.
My days often include teaching myself lessons in home economics. For example, I can buy a bottle of pre-made cold tea to serve students in lessons (or myself when I want ice tea) for about 250-300 yen or I can make my own iced tea for 30-70 yen (depending on the type of tea). Making the cold tea myself requires adding water to a pan, boiling it, putting teabags in a jug, adding the water, allowing it to steep and cool, and removing the bags. In terms of my time and attention to the task, we're talking no more than 5 minutes of effort, though it is peppered across across a span of time in tiny fragments. In other words, if I buy that jug of tea, I'm essentially telling myself that it is worth paying a little more than 2400 yen an hour for someone else to make my tea for me (5 minutes is 1/12 of an hour so 12 x the difference between my tea and the cost of the bottle which would be about 200 yen).
Now, if you're one of those sorts who writes blog bits for $10 a post and can whip out one every ten minutes and calculate your time as being worth $60 an hour, then my advice isn't for you. Though, honestly, this whole "my time is worth $X per hour" when considering the value of pursuing a particular endeavor is a pretty big load anyway. It presumes that all effort is equal and that all time is potentially similarly productive or that there is sufficient demand for you work to keep you busy such that you can't spare 5 minutes to make your own tea without sacrificing a moment of precious earnings potential. Also, seriously, I'd rather work less and spend less than work more and earn more. The mental and physical toll of pushing myself to work for more cash is far less than making a pot of tea, but that's really just me.
If you start to do home economics in accord with your lifestyle, you can see where you're making choices to pay someone else to do the work for you and make an informed choice about whether the effort is worth it to you or not. I'm not advocating that people stop buying the things they want or enjoying their lives, but rather that they apply serious thought to their consumption and the real costs of it.
A lot of people find the sort of "nickel and dime" thinking I'm talking about petty and feel that it won't save you an appreciable amount of money. Whether this is true or not really depends on how much you feel you have to save to make it worth your while. When I was living in the U.S., there was a woman who worked at the same halfway house as I who my 22 year-old self used to scoff at because she'd do things like cut up old calendars to use for notepaper. I felt that she was saving the place a few cents and it was meaningless. Similarly, I used to get annoyed with my parents for insisting I turn off the lights all the time when I left the room. I thought they were being cheap and petty. Now, I'm cutting up my old calendars and turning off all the lights.
Since environmental concerns and energy consumption have been something I'm paying attention to more and more, I've found out that these small actions result in meaningful savings. Over the last year, I've discovered that taking showers by intermittently turning the water on and off has reduced my gas bill by about $15-20 a month in the warmer months. Having an air conditioner with low power settings and having two air conditioners (one in the bedroom and living room) and cooling only one room at a time has reduced summer air conditioning expenses by about $50-70 in the hottest and muggiest months.
Over the course of a year, I've discovered that just turning off the lights and television when I'm not using them and showering more efficiently has saved us more than $300 a year in living expenses and we sacrifice nothing in terms of quality of life. All it "costs" is developing new behavioral patterns. That's essentially the cost of a new iPod Touch or iPhone. And it is a real savings. I know what I used to pay and what I pay now. I've saved the bills and done the comparisons. It's not theoretical.
I never crunched the numbers specifically on what other habits we've employed to reduce expenses have allowed us to do because it can get pretty complicated. However, I do scrutinize the cost of home-cooked meals compared to eating out on a regular basis and consider the cost per portion based on the type of ingredients. I mainly do this to dissuade myself from going for convenience over effort as often as possible. For instance, I know making my own chicken pulao costs less than 150 yen per serving whereas going to an Indian restaurant will set me back at least 1000 yen (very likely more) per person. The serving sizes will be bigger, but they will also offer more food than I require and result in waste or overeating. Making chicken pulao also frees me up for the next two evenings as we'll eat leftovers for two additional days.
I know cooking is out of the question for some people as is carefully shopping for cheap food or buying in bulk (which also saves money). I'm not saying what people should or should not do, but rather saying that, if you want to save, you have to start considering the price of convenience. It's very likely more expensive than you realize.
(This is the last one, I promise. ;-) )
Thursday, September 25, 2008
Cornerstones of Saving — Part 2
One of our fellow bloggers who also tends to talk quite a bit about Japan recently married a Japanese woman and came to Japan to live after completing university. He was concerned about debts from his education and getting them paid off as quickly as possible. I told him that my husband and I had managed to save nearly as much as his entire educational debt in the two years since I quit my former job so I was sure he could get those debts dealt with pretty quickly if he was careful with how he spent his money. (All the money we save, incidentally, has all gone into savings for when we're old and grey and can no longer work.)
You might assume that we make a lot of money. The truth is that we do not and our rent is pretty high (110,000 yen). The money we saved during those two years represented about 35% of our income. We don't make a small amount of money, mind you, but my CH isn't in a high-paying job and I only worked 5-10 hours a week from home during the two years in which we saved that amount of money. The way we save a fair bit is by not spending what we get. This isn't as hard as it may sound, but it does take awhile to reach a mindset where living well below your means doesn't feel like a burden or sacrifice. For us, it evolved naturally so we've never found ourselves pining for things. I consider us very fortunate in that regard.
I've come to understand that there are 3 cornerstones to reducing your spending:
1. Cook for yourself from real (whole) food ingredients (never pre-mixed, pre-bagged, or pre-made).
2. Don't buy new clothes or shoes unless you need them (never buy because they are attractive to you or you think you'll look good in them).
3. Never shop to entertain yourself or to mitigate unrest in your life.
If you follow these, your spending will be dramatically reduced. Most people waste their money on incidental items they rarely need or use, convenience, and the momentary "high" of obtaining something novel. If you scrutinize the pleasure your spending habits bring you, you'll likely see very few of the items bring long-term pleasure or fulfill recurring needs. Most of the pleasure you get is from looking at the items, considering buying them, making the purchase, and carrying the bag home. Once the item is in your possession, there is definitely a letdown for many purchases.
Most people can't get past the idea of "deserving" the reward of buying something they want so they justify wasteful spending as a way of making working worthwhile. They feel empowered by the freedom of obtaining what they want when they want it and choose the immediate small sense of freedom over the long term freedom that comes from financial stability and security. I won't say that, if you hate your job and have to placate yourself by buying junk, it's probably time to consider a different job which doesn't make you as miserable but may pay less because I know that's unrealistic for many people. However, it is worth considering.
I'm not judging anyone for their spending habits, mind you. We all make stupid decisions for short-term benefits because life is hard sometimes and some little tidbit can make us happy for awhile. However, if saving money is important to you, you have to change your entire mindset about shopping and the acquisition of possessions.
You might assume that we make a lot of money. The truth is that we do not and our rent is pretty high (110,000 yen). The money we saved during those two years represented about 35% of our income. We don't make a small amount of money, mind you, but my CH isn't in a high-paying job and I only worked 5-10 hours a week from home during the two years in which we saved that amount of money. The way we save a fair bit is by not spending what we get. This isn't as hard as it may sound, but it does take awhile to reach a mindset where living well below your means doesn't feel like a burden or sacrifice. For us, it evolved naturally so we've never found ourselves pining for things. I consider us very fortunate in that regard.
I've come to understand that there are 3 cornerstones to reducing your spending:
1. Cook for yourself from real (whole) food ingredients (never pre-mixed, pre-bagged, or pre-made).
2. Don't buy new clothes or shoes unless you need them (never buy because they are attractive to you or you think you'll look good in them).
3. Never shop to entertain yourself or to mitigate unrest in your life.
If you follow these, your spending will be dramatically reduced. Most people waste their money on incidental items they rarely need or use, convenience, and the momentary "high" of obtaining something novel. If you scrutinize the pleasure your spending habits bring you, you'll likely see very few of the items bring long-term pleasure or fulfill recurring needs. Most of the pleasure you get is from looking at the items, considering buying them, making the purchase, and carrying the bag home. Once the item is in your possession, there is definitely a letdown for many purchases.
Most people can't get past the idea of "deserving" the reward of buying something they want so they justify wasteful spending as a way of making working worthwhile. They feel empowered by the freedom of obtaining what they want when they want it and choose the immediate small sense of freedom over the long term freedom that comes from financial stability and security. I won't say that, if you hate your job and have to placate yourself by buying junk, it's probably time to consider a different job which doesn't make you as miserable but may pay less because I know that's unrealistic for many people. However, it is worth considering.
I'm not judging anyone for their spending habits, mind you. We all make stupid decisions for short-term benefits because life is hard sometimes and some little tidbit can make us happy for awhile. However, if saving money is important to you, you have to change your entire mindset about shopping and the acquisition of possessions.
Wednesday, September 24, 2008
Cornerstones of Saving — Part 1
One of the reasons many people believe foreign folks come to Japan is to make big bucks. The general impression among Japanese folks is that we make a lot more money than they do. That's a half truth. If you're an underpaid Japanese office lady with a crappy job or a university student toiling at a convenience store or McDonald's for minimum wage, then that assertion is correct. If you do nearly any other full-time job which requires a university degree (and all us teaching types have to have degrees because we can't get a work visa without one), then it's probably not correct.
Most Japanese people calculate your wages based on what they pay to be taught by you, not on what you are paid. They assume you get a much bigger slice of the pie than you do. My referral agency charges students 4,900 yen an hour, but I get paid 2,800 yen an hour. I'm not complaining about the pay, mind you, but you can see how a student might think that I'm getting a great deal more than I am.
It isn't really how much you make but how you live which dictates how well you live here. One of my students is a nurse who makes less money than the average starting level foreign teacher salary of 250,000 yen. However, she also lives in a dorm provided by the hospital which only costs 22,000 yen a month and gets free meals at the hospital cafeteria. To put that in perspective, a super cheap accommodation in Tokyo for a teacher would be 50,000 yen a month for a shared place (gaijin house or shared apartment). If you want your own small place, you're likely paying 70,000 yen a month or more. In terms of food expenses saved, most people can't eat for much less than 30,000 yen a month unless they live on ramen. That means that the "perks" of my student's job as a nurse add to her salary to the tune of at least 70,000 yen each month.
My underpaid student who is a nurse told me that she spends 50,000 yen a month on clothes and she spends that much every month. She gives her old clothes away to friends and coworkers, but she has a constant revolving door on her wardrobe closet. She also goes to concerts and bars with friends at least once a week. Despite having a low income, she's certainly not hurting for discretionary funds.
After you live here for awhile, you understand that Japanese society is different from Western society in that jobs tend to take the average life circumstances of a person into account when deciding how much to pay. Most women who work as nurses are single and child-less because married women with children can't put in the sorts of hours required or be on call. Most office ladies are either married and working for spare cash or are still living with their parents so they aren't paying rent or shouldering the burden of supporting a family. Men who marry get raises compared to single men and men whose wives give birth to new people also often get raises.
Since life circumstances dictate how Japanese folks tend to be paid, but not how foreigners in usual foreigner jobs (teaching, translating, entertaining) get paid, it's hard to compare salaries. We are paid what the market will bear based on supply and demand. They are paid what their culture feels is appropriate based on their life circumstances in many cases (though certainly not all). Companies assume that you won't apply for a job which doesn't suit your needs and everyone "knows" that certain jobs are at a low pay level for students or housewives looking to support discretionary spending and no one expects adults who need to support a family to do them.
This is all my roundabout and tangent-heavy way of saying that how you live is more important than what you make in many cases when it comes to money. In Japan, the wages tend to reflect how they expect someone doing that job to be living. That's not to say there aren't people who simply do not have enough money to live comfortably, even in Japan where unemployment stats are low and it is currently a market (on the Japanese side, not the foreigner side at present) which favors job seekers over job providers.
Most Japanese people calculate your wages based on what they pay to be taught by you, not on what you are paid. They assume you get a much bigger slice of the pie than you do. My referral agency charges students 4,900 yen an hour, but I get paid 2,800 yen an hour. I'm not complaining about the pay, mind you, but you can see how a student might think that I'm getting a great deal more than I am.
It isn't really how much you make but how you live which dictates how well you live here. One of my students is a nurse who makes less money than the average starting level foreign teacher salary of 250,000 yen. However, she also lives in a dorm provided by the hospital which only costs 22,000 yen a month and gets free meals at the hospital cafeteria. To put that in perspective, a super cheap accommodation in Tokyo for a teacher would be 50,000 yen a month for a shared place (gaijin house or shared apartment). If you want your own small place, you're likely paying 70,000 yen a month or more. In terms of food expenses saved, most people can't eat for much less than 30,000 yen a month unless they live on ramen. That means that the "perks" of my student's job as a nurse add to her salary to the tune of at least 70,000 yen each month.
My underpaid student who is a nurse told me that she spends 50,000 yen a month on clothes and she spends that much every month. She gives her old clothes away to friends and coworkers, but she has a constant revolving door on her wardrobe closet. She also goes to concerts and bars with friends at least once a week. Despite having a low income, she's certainly not hurting for discretionary funds.
After you live here for awhile, you understand that Japanese society is different from Western society in that jobs tend to take the average life circumstances of a person into account when deciding how much to pay. Most women who work as nurses are single and child-less because married women with children can't put in the sorts of hours required or be on call. Most office ladies are either married and working for spare cash or are still living with their parents so they aren't paying rent or shouldering the burden of supporting a family. Men who marry get raises compared to single men and men whose wives give birth to new people also often get raises.
Since life circumstances dictate how Japanese folks tend to be paid, but not how foreigners in usual foreigner jobs (teaching, translating, entertaining) get paid, it's hard to compare salaries. We are paid what the market will bear based on supply and demand. They are paid what their culture feels is appropriate based on their life circumstances in many cases (though certainly not all). Companies assume that you won't apply for a job which doesn't suit your needs and everyone "knows" that certain jobs are at a low pay level for students or housewives looking to support discretionary spending and no one expects adults who need to support a family to do them.
This is all my roundabout and tangent-heavy way of saying that how you live is more important than what you make in many cases when it comes to money. In Japan, the wages tend to reflect how they expect someone doing that job to be living. That's not to say there aren't people who simply do not have enough money to live comfortably, even in Japan where unemployment stats are low and it is currently a market (on the Japanese side, not the foreigner side at present) which favors job seekers over job providers.
Thursday, July 24, 2008
Even Expats Get Stimulated
There was (at least) one episode of Beavis & Butthead where Butthead attempts to read a sign but, being a semi-illiterate, well, butt-head, he can't read all of the words. When he reads, he sounds out a few words that he can manage and just says "words, words, (sounded out word), words, words, (sounded out word)." He tunes out anything which he can't be troubled to make out and reads only the parts he cares about.
When my CH and I got our passports full of many pages and only one that seemed to really matter (the front one with identification and photo), we essentially did a Butthead on the passport's contents. It was like "personal data, pages, pages, pages, visa, pages, pages." There are a lot of blank pages and some historical quotes and warnings that don't really amount to much in a U.S. passport. Like Butthead, we found the stuff we wanted to know and ignored the rest. Unfortunately, also like Butthead, we missed things we actually needed to know.
We missed the part in our passport which said that we have to file income tax returns to the U.S. government every year when we reside in a foreign country. You'd think that living and working in a foreign country would relieve you of the need to file an income tax form back home, but that's not the way it works. You have to file two returns, one in Japan and one for the U.S. government.
My CH and I didn't file for the first decade or so that we lived in Japan due to our lack of careful reading. A temporary coworker from the U.S. was the one who eventually clued us in on the fact that we should be filing and this sent us into a panic. In the end, everything was okay. The I.R.S. didn't hassle us or punish us. It probably helps that we have never made enough money in Japan to have to actually pay taxes back home. I'm guessing the reason for the exemption for expats is that they figure we're already forking over enough in Japan and double-taxing us on our entire income would seem rather unfair.
Because we don't actually pay any tax to the U.S., news of economic stimulus checks didn't really engage us. We didn't think that expatriates would qualify for such checks since they are not really in a position to do much stimulating of the U.S. economy. I did receive several letters from the U.S. government saying we were eligible, but I didn't take any of it seriously until the most recent announcement said we were going to actually get check. Even then, I wasn't really going to believe it until I saw it.
Obviously, I finally saw it. We received a check for $600.
I have somewhat mixed feelings about the money. I didn't pay into the tax system because I make too little money to have to do so, but I'm getting tax money as if I had been paying like everyone else. I'm also not a fan of the fact that this is essentially borrowing against the future to bribe voters for now. That being said, I'm not going to turn down money that is sent to me as doing so isn't going to change anything. If someone gave me the option to check a box on a form somewhere and say, "take this money and pay down the enormous deficit in America instead of sending it to me, I'd do it. That's not really an option (and I'd probably stand alone in making such a choice).
If it helps any, the very day this check arrived, my husband spend $630 at Costco buying almost all American-made or produced goods. The biggest ticket items were vast quantities of American-made Colby-Jack cheese (10 lbs. of cheese in all), 5 lbs. of Starbucks Espresso beans, 10 steaks from U.S. cattle, and California grapes. Of course, with or without the stimulus check, we'd have bought these things as we always do.
We can't actually do anything in Japan with the check itself as such things can't be cashed here as far as I know. If they can be, it's in an out of the way place and likely for an absurd fee. We'll be sending it back to our bank in America and putting it in our checking account where we'll use it to stimulate the U.S. economy next time my husband goes to California to visit his parents.
When my CH and I got our passports full of many pages and only one that seemed to really matter (the front one with identification and photo), we essentially did a Butthead on the passport's contents. It was like "personal data, pages, pages, pages, visa, pages, pages." There are a lot of blank pages and some historical quotes and warnings that don't really amount to much in a U.S. passport. Like Butthead, we found the stuff we wanted to know and ignored the rest. Unfortunately, also like Butthead, we missed things we actually needed to know.
We missed the part in our passport which said that we have to file income tax returns to the U.S. government every year when we reside in a foreign country. You'd think that living and working in a foreign country would relieve you of the need to file an income tax form back home, but that's not the way it works. You have to file two returns, one in Japan and one for the U.S. government.
My CH and I didn't file for the first decade or so that we lived in Japan due to our lack of careful reading. A temporary coworker from the U.S. was the one who eventually clued us in on the fact that we should be filing and this sent us into a panic. In the end, everything was okay. The I.R.S. didn't hassle us or punish us. It probably helps that we have never made enough money in Japan to have to actually pay taxes back home. I'm guessing the reason for the exemption for expats is that they figure we're already forking over enough in Japan and double-taxing us on our entire income would seem rather unfair.
Because we don't actually pay any tax to the U.S., news of economic stimulus checks didn't really engage us. We didn't think that expatriates would qualify for such checks since they are not really in a position to do much stimulating of the U.S. economy. I did receive several letters from the U.S. government saying we were eligible, but I didn't take any of it seriously until the most recent announcement said we were going to actually get check. Even then, I wasn't really going to believe it until I saw it.
Obviously, I finally saw it. We received a check for $600.
I have somewhat mixed feelings about the money. I didn't pay into the tax system because I make too little money to have to do so, but I'm getting tax money as if I had been paying like everyone else. I'm also not a fan of the fact that this is essentially borrowing against the future to bribe voters for now. That being said, I'm not going to turn down money that is sent to me as doing so isn't going to change anything. If someone gave me the option to check a box on a form somewhere and say, "take this money and pay down the enormous deficit in America instead of sending it to me, I'd do it. That's not really an option (and I'd probably stand alone in making such a choice).
If it helps any, the very day this check arrived, my husband spend $630 at Costco buying almost all American-made or produced goods. The biggest ticket items were vast quantities of American-made Colby-Jack cheese (10 lbs. of cheese in all), 5 lbs. of Starbucks Espresso beans, 10 steaks from U.S. cattle, and California grapes. Of course, with or without the stimulus check, we'd have bought these things as we always do.
We can't actually do anything in Japan with the check itself as such things can't be cashed here as far as I know. If they can be, it's in an out of the way place and likely for an absurd fee. We'll be sending it back to our bank in America and putting it in our checking account where we'll use it to stimulate the U.S. economy next time my husband goes to California to visit his parents.
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