10 tips to save money after Japan's 10% consumption tax hike

They say that only two things are certain in life: death and taxes. Japan’s consumption tax was initially implemented back in 1989 at a rate of 3 percent, and this has jumped up to 5 percent in April of 1997, then 8 percent in April 2014, and now 10 percent as of October this year -- representing Japan’s first tax hike in five years.   

Perhaps we should all be counting ourselves lucky, since the 10 percent rate for Japan’s consumption tax was initially meant to be implemented back in October of 2015 but was pushed back twice as a result of Japan’s economic situation.

Sure, an additional 2 percent increase in Japan’s consumption tax may seem like a drop in the ocean to some, but drops eventually fill buckets - and it can absolutely make an impact on your disposable income and the household budget.  

Of course, Japan’s latest consumption tax hike doesn’t apply to everything and while it might take a little time to get to grips with what has been affected and what hasn’t, some all-round money-saving changes could help to keep the books balanced.  

So then, in line with the tax hike to 10 percent, here are 10 tips to cut costs and save money in Japan.

Embrace free activities

Many people have asked me since I moved here, “Isn’t it expensive living in Japan?” and I usually answer with, “Yes, and no.” 

For me, Japan is a country that can certainly be expensive if you’re not careful, but with a little planning it’s not too difficult to live enjoyably on a modest budget. 

Here’s an example for you: when my husband was working full time here, I wouldn’t bat an eyelid at taking my daughter to indoor play centers that cost around 2,000 yen admission for us both for an hour or so. My husband went back to study for his PhD, and our household income dropped significantly - and with this, our attention to what we spent money on increased. 

We found a free play center run by the local government with tons of amazing equipment. We utilize public parks, or simply go for walks outside in the stunning local nature. Sometimes it just takes a change of mindset to understand that free alternatives are out there and present ways to save money in Japan.

Japan also has plenty of temples, shrines, museums and more that have free (or very cheap) admission. We’ve found these to be both great for our budget and also great from a learning perspective.

(Following Japan's consumption tax hike, seeking out those free activities can be a great way to save money in Japan, and there's plenty of 'em!)

Ride or walk when you can, as opposed to driving or public transport

One of the blessings of where we live in Japan is that walking or cycling to many places we regularly visit is completely feasible. Our daughter’s pre-school is around a 15-minute walk from home. Our closest supermarket, the local farmer’s market and convenience stores are about a 5-minute bike ride away. With most of these places it makes more sense to walk or bike to them, rather than drive. And we save money on petrol, too.

Added bonus: who needs a gym membership when you’re getting your workouts doing regular tasks? Winner!

Watch the conbini creep

I love Japan’s convenience stores - not gonna lie. But if I pop in there to grab a loaf of bread once the local supermarket is shut for the evening, I inevitably get entranced by the new seasonal breads, potato chip flavors, or chocolate. I’m human, alright?! 

It may only seem like a couple of hundred yen here or there, but it’s more the fact that it’s not a need, it’s a want - and my money could be better spent on other things rather than the newest sweet potato seasonal snacks, as much as it pains me to say that.

(Just leave it on the shelf. I promise you don't really need it.)

Explore your own area

Japan is praised worldwide for having a pretty amazing public transport system, but depending on where you want to get to it can be expensive. A round-trip Shinkansen fare for me to get to Tokyo from my town in Niigata is around 16,000 yen - not cheap by any means. 

This expense and a bid to save money in Japan has encouraged me to do more exploring of my own backyard, and even though I live in rural Japan it’s been an eye-opener as to how much there is to see and do here. Check with your local tourist office, if you have one, about events and activities to do locally. You may be surprised at just how much is on offer.

(Money-saving efforts following Japan's consumption tax hike a motivator to get out and explore your own backyard)

Cook at home

Similar to the convenience store creep, eating out can add up. An 800-yen bowl of ramen at a local restaurant often sounds more appealing than cooking at home, and doing the dishes afterwards, but I can often get enough ingredients for that price to make a full meal with leftovers for lunch the next day. 

Cook once, eat twice, and keep those yen in your pocket for something you really need.

On a similar theme, it’s worth noting that Japan’s consumption tax hike has seen the tax on meals eaten in shops and restaurants raised to 10 percent. Those meals that are consumed as takeout food though, remain at the tax rate of 8 percent. 

Eat seasonally

"Opting for what’s in season in Japan tends to cut our costs dramatically."

Some fruits and vegetables in Japan can be eye-wateringly expensive compared to what I’m used to back home. It saddens me that I can’t just pick up whatever I want at the supermarket because sometimes the cost is outrageous. That said, it presents an opportunity to save money.

Opting for what’s in season in Japan tends to cut our costs dramatically. We’ve got some amazing neighbors who grow a ton of stuff in their yards (Perks of countryside living and having space!) and they often share that with us, too. Not only has eating seasonally seen us save money, it’s encouraged us to learn more about what’s grown in Japan and how to cook with different produce we’d never used before we lived here.

(Fresh corn from neighbors: seasonal, delicious and a money saver)

Watch yo’ bills

This is probably the biggest one for our household. Our electricity costs when we moved to Niigata were out of this world - try heating an old, drafty house in the middle of snow country and you’ll get where I’m coming from. 

We are much more mindful of how we do things now. For instance, we hang all our clothes in the room with the gas heater in winter instead of running the dryer. If we’re having the heater on anyway to keep ourselves warm, we might as well optimize it, right?

Bless Japan for all its amazing qualities, but house insulation isn’t its strong point. 

We also do a few things during the winter in Japan to try and keep the house from losing heat, including putting bubble wrap on our windows as an extra level of insulation. Bless Japan for all its amazing qualities, but house insulation isn’t its strong point. Do what you gotta do to keep costs lower.

Use Japan's 100 yen stores to your advantage

I am such a fan of Japan’s 100 yen stores (Who isn’t?!) and I feel like there are loads of things you can get there that are substantially cheaper than elsewhere. Cleaning supplies, dishware (All of our kitchen plates are from Daiso and we always get compliments on how pretty they are!) and more...it’s easy to save money in Japan, a bunch of it, by utilizing 100 yen stores, if you’re sensible. 

Similar to the conbini creep though, make a list when you go and stick to it, otherwise it’s incredibly easy to get sucked in by all the cute stuff. Old me was 100% like, “OMG it’s a Hello Kitty Notebook and it’s only 100 yen and I NEED IT!” even though I already had multiple unused notebooks collecting dust in drawers.

(Our plates cost about 200 yen a pop at Daiso several years ago. People always say, "Sakura plates! Ooh, so pretty! Where'd ya get 'em?")

Let points cards be your friend

I initially thought points cards were so gimmicky and not really something that I wanted to use, until I realized that as long as I shopped normally anyway, it was like getting money for doing nothing. I don’t go buying extra things I don’t need to accumulate more points, but I do find that even through our normal shopping routine we can save money in Japan.  

We have cards for Japanese supermarket chain AEON (located in a neighboring town) as well as for the smaller supermarket closer to our house. It’s worth checking with the supermarkets you visit in Japan if they do have some loyalty program or point card system.

On the back of Japan’s consumption tax hike measures have been taken to soften the blow, so to speak. Among these is a program to reward consumers who use cashless payments at small shops with a rebate (in the form of points?) on their purchases, available from October this year to June 2020.

Know what’s cheap, when

Our local supermarket in Japan has a Facebook page where management posts what weekly deals are going to be happening, or any special sales they have going on - one week, ground pork may be super economical, another week they may have packets of yakisoba noodles at half price. 

Some prior planning to suss out local supermarkets, peruse the catalogs, and devise an actual meal plan saves us loads.

Author: genkidesu

How has Japan’s consumption tax hike affected you, if at all? Got any other tips on how to save money in Japan?