Sid in Japan

Budgeting is a crucial skill for anyone living abroad, and as an ALT on the JET Programme, managing your finances in Japan can sometimes be tricky. Whether you’re just starting or a seasoned ALT, having a budget helps you stay on top of your expenses, save for the future, and enjoy your time in Japan without stressing over money.

The 50/30/20 Budget Rule

One of the simplest and most effective ways to manage your income is using the 50/30/20 rule. Here’s a breakdown:

The Cash-Stuffing Method

Another budgeting technique you might want to try is cash stuffing, a system where you allocate cash into physical envelopes for different categories of spending. This hands-on approach can help you visualize where your money is going and curb overspending. In Japan, cash is still widely used, making this method practical and easy to implement. You can create envelopes for your fixed expenses (like rent, utilities) and fun categories (like travel and entertainment) and once an envelope runs out, you stop spending in that category until the next pay period.

A Breakdown of Typical ALT Expenses in Japan

Here’s a basic idea of what your expenses might look like as an ALT on the JET Programme, depending on your placement and personal lifestyle:

• Rent: ¥30,000 – ¥70,000 (some JETs receive subsidized rent, while others pay full price)
• Utilities (electricity, gas, water, internet): ¥10,000 – ¥30,000
• Groceries: ¥20,000 – ¥35,000
• Transportation: ¥5,000 – ¥15,000 (depending on your commute)
• Phone: ¥3,000 – ¥10,000 (depending on the provider and plan)
• Health Insurance/Pension Contributions: Around 10-15% of your income (deducted before take-home pay)

Example Budget for a 3rd-Year JET Making ¥3.9 Million Per Year (Before Tax)

If you’re in your 3rd year as a JET earning ¥3.9 million annually, your monthly take-home pay after taxes and pension contributions might be around ¥250,000 (this will vary based on deductions and personal tax circumstances).

Using the 50/30/20 Rule, this could look like:

• 50% Necessities: ¥125,000
  • Rent: ¥50,000
  • Utilities: ¥15,000
  • Groceries: ¥30,000
  • Transportation: ¥10,000
  • Phone: ¥5,000
  • Miscellaneous (insurance, personal care, etc.): ¥15,000
• 30% Wants: ¥75,000
  • Dining out, cafes, and social activities: ¥25,000
  • Travel: ¥20,000
  • Shopping (clothes, gadgets, etc.): ¥15,000
  • Hobbies and entertainment: ¥15,000
• 20% Savings/Debt Repayment: ¥50,000
  • Emergency fund: ¥20,000
  • Long-term savings/retirement: ¥15,000
  • Loan repayment (if applicable): ¥15,000

Adjusting for Your Situation

Of course, everyone’s situation is different. If you’re placed in a more rural area (like me) with lower rent and fewer social activities, you may find that you have more room for savings or travel. Conversely, if you’re in a major city like Tokyo or Osaka, your rent and other expenses may be higher, so you might have to adjust your budget accordingly.

Please note that I am not a financial expert, and the budgeting tips and suggestions shared here are based on personal experience and general knowledge. For personalized financial advice, it’s always best to consult a professional.