For those in the know, I keep track living expenses so I have an idea of where my money goes. The other benefit of tracking expenses is the ability to forecast future expenses which might be useful for setting cash flow objectives (ie. setting up income goals). The previous year is an interesting year, in that it was my first year (well, 9 months) as a salaried worker and with it, a move from Sendai to the outskirts of Tokyo.
Interestingly, I've realized that I've never posted my 2007 living expenses and I will be posting that data along with my 2008 data. The comparison beween 2007 and 2008 will be interesting as I will be able to compare my life as a student, living in Sendai versus living "in" Tokyo as a salaried worker. I will automatically note that living expenses in Sendai (especially for restaurants and entertainment) is much lower compared to Tokyo and we will see some of this information coming out of the graphs I will be presenting next.
2007 Expenditure Results
I shall start off with my year 2007 data. Firstly a bar graph of my categorized monthly data in the following figure (click to enlarge).
The currency for this and the following figures will be presented in Yen. The yen is quite strong at the moment with the exchange rate sitting at 100 yen : $1.4 CAD. The best way to interpret yen, however (especially when living in Japan), is to equate 100 yen to about $1, which is what 100 yen feels like when you spend it in Japan.
The graph is broken down to Food, Goods, Transport, Service, Room, Entertainment and Travel expenditures. My last report in 2006 did not include the "Travel" grouping but, I found that travel expenses are very significant irregular expenditures that should have a category of its own-- I've often found myself having a hard time classifying travel expenses between "Transportation" and "Entertainment" expenses as traveling is the intertwined combination of both.
Firstly I will summarize the 2007 cost totals by category:
Food: 267,465 Yen (think, $2,670)
Goods: 127,285 Yen (think, $1,270)
Transport: 61,416 Yen (think $610)
Service: 149,787 Yen (think $1,500)
Room: 391,232 Yen (think $3,900)
Entertainment: 234,254 Yen (think $2,340)
Travel: 1,083,542 Yen (think $10,800)
Firstly, monthly food expenses hover in the 40,000~28,000 (think $400~$280) range. The food expenditures tend to vary if I go traveling or not, where food expenditures tend to get lumped in with travel expenses and food expenses for the months of Nov and Dec are zero during my 3 month travel stint through SE Asia. Food expenses tend to be a rather stable recurring expense and on average sits about 35,000 yen/month.
The goods expenditure for 2007 was 127,000 (think $1,270) for the year. The only major expense I incurred was buying a suit for 31,000 yen. The rest of the incurred goods expenses ended up for esoteric things like floss, cell phone straps, post cards and etc.
Service fees totaled 149,787 yen (think $1,500) for the year. Half of the costs came from monthly cell phone usage (about 4,000 yen/month) and other small things like health insurance, snow board rentals and the like. I should also note that I was swindled out of 20,000 yen ish in Denmark by some Russians and I've lumed the damage as a "service fee" in my accounting books.
Transportation expenditures mainly consisted of me buying gas for my scooter (about 2000 yen/month) and the occasional car trips with friends into the country side, which might be a 4,000 yen/person (think $40) kind of thing. In general, my transportation costs have been quite lot.
Rent fees varied between 29,750 yen to 33,935 yen/month. The variation owing to varied usage of electricity, water and gas. Housing relating costs tend to be very constant.
Entertainment costs at it's maximum peaked at the 29,600 yen/month with the minimum sitting at 17,400 yen/month during a full month in Sendai. Compared to going out in Tokyo, going out for food and drinks or doing something is much cheaper compared to Tokyo, that data will be presented later.
Travel costs for the year came in at a whopping 1,083,542 yen, which would feel like something in the ball park of $10,800. The main expenditures here were a 10 day trip to France in February, a trip back to Canada in May, hitting Aomori in August for one of their summer festivals and the total costs of my first 2.5 months of traveling through SE Asia starting through mid-october with costs being tallied up to the end of December.
Living in SE Asia is very cheap. My traveling expenses for November, while I was in Vietnam, Singapore and Malaysia accounted for a total of 227,684 yen (feels like $2,270) for an entire month of expenditures! This is like 1/2 the cost of a round trip ticket to Canada and I should note that these expenses also include plane tickets for me traveling around countries in SE as well!
The most financially painful parts of my travels were through Australia and New Zealand, where the high currency costs and the high living costs of those countries immediately doubled my traveling expenditures to 401,967 Yen (or like $4,020) for the month and this is after me trimming down my expenses like crazy in these countries (I lived relatively well in SE asia!). The combined costs of my SE asia costs for Oct, Nov and Dec with my France and trip to Canada quite quickly put the my traveling costs to about $10,000 CAD for the year, my largest (though irregular) expenditure.
My total living costs for the year of 2007 in Japan amounted to a total of 2,314,981 yen, half of the expenses coming from traveling. I know for sure that if I wanted to save money, I'd stop traveling.
The following pie chart illustrates the percentage breakdown of my living expenses (click for a larger image):
As shown here, travel expenses logged in at 47% of my expenses, nearly half of of all the money I spent in 2007. The next larges expenditure comes in the form of my rooming fees at 17%, then food at 12% then entertainment at 10%. The remaining service, transport and goods fees sum up to approximately 12%. If I wanted to trim down my expenditures, the most obvious things would be to trim down my travel and entertainment expenses and the remaining expenses would be considered "fixed expenditures."
2008 Expenditure Results and comparison with 2007
The end of my SE Asia trip occurred in mid January where I made my return to Japan for my placement interview prior to starting work. After the interview, I would remain in Japan until the end of March, where I would make my move from Sendai to the outskirts of Tokyo in a city called Atsugi. My expenditures for this year will generally include costs to settling down as I picked things up I needed over the entire year.
For my 2008 yearly data, I have made an additional category in addition to the usual Food, Goods, Transport, Service, Room, Entertainment and Travel break down to include salary deductions, as 2008 marks the year after I graduated from my masters program and me starting my work, and thus becoming required to pay government related expenses.
My 2008 expenses are summarized in the following chart (click for a larger image):
The summarized 2008 total expenses are summarized below:
Food: 400,223 Yen (think, $4,000)
Goods: 327,232 Yen (think, $3,270)
Transport: 141,896 Yen (think $1,410)
Service: 149,146 Yen (think $1,500)
Room: 281,159 Yen (think $2,800)
Entertainment: 474,034 Yen (think $4,740)
Travel: 436,524 Yen (think $4,370)
Deductions: 404,682 Yen (think $4,040)
Looking at the monthly data for food since moving to Atsugi, I find that in general, I am spending approximately 40,000 yen/month or 10,000 yen more/month to what I was spending in Sendai. In general, I am finding that I spend about 1,000 yen more every time I go to the grocery store when buying things. I have heard from friends that the grocery store near by where I live is somewhat expensive and that is showing up in my monthly expenes. There are some cheaper grocery stores in Atsugi, but it takes an additional 10 minute round trip via scooter. It would be an interesting experiment to see what savings I can generate by changing stores.
The costs for Goods for this year totaled 327,232 yen, with the most signigicant expenditure being the new desktop computer I bought over the summer. The computer is a Dual Core Athlon, 2x500 GB hard drives, 2x19" monitors, Geforce 9600 video card, 4 GB DDR2 ram system. This desktop has incredible power over a laptop and is still cheaper with a total price tag of about 120,000 yen (think $1,200 CAD). Most purchase of durable goods for this year included electronics parts in the 10,000 yen range / shopping spree and wedding presents for friends whom have rencelty gotten married.
Transportations costs for this year totaled 141,896 yen. Compared to my 2007 transportation costs, this is a drastic increase owing to weekend trips to Tokyo via train. A one way ticket to Tokyo from where I live costs in the range of 500 yen and traveling around to the different parts of Tokyo will cost an additional 300 yen extra, easily bringing my weekend transportation expenses to 1,300 yen. Having friends in the Tokyo area results in having everyone quite spread out, as opposed to having most of your friends concentrated in a smaller region while living in Sendai. While in Sendai, I rarely had to use any public transport to get out anywhere to meet up with friends. This is not the case when it comes to living in Tokyo. Monthly train costs easily rack up to about 6,000 yen/month which is easily 3 times the 2,000/month I used to spend just on gas for my scooter while in Sendai.
Service expenses for 2008 totalled 149,146 yen, which is almost spot on with the 149,787 worth of expenses for 2007. Apparently, moving to Tokyo did not result in a chance in my cell phone habits. Other notable service charges for this year included moving costs to get my stuff out of Sendai to Atsugi. My moving costs were subsidized up to 50,000 yen and I took an additional 28,000 yen additional charge to move extra things and my scooter here.
Room related expenditures totaled at 281,159 yen for 2008 compared to 391,232 Yen compared to 2007. This is mostly due to living in the company dorm where the rent is cheaper compared to living on one's own. I was previously living in an apparement share arrangement in Sendai with monthly base rent at 28,000 yen/month (a pretty good deal!) and I am now currently living in the company dorm at 16,000 yen/month, yielding the a 12,000 yen difference in savings. Over a 9 month period, this easily equates to the 100,000 yen savings recieved over the 9 months I've lived here. Though, if it would mean that I pay 100,000 more, it would be nice to be freely able to invite friends over. Unfortunately due to security reasons, friends are not generally allowed to stay over in the company dorms.
Entertainment costs for 2008 totaled 474,034 yen compared to 234,254 yen in 2007; a 240,000 yen increase (about 2 times). Going out and doing the same things I did in Sendai compared to doing things in Tokyo is doubly expensive. If I were to go till past midnight on food and drinks in Sendai, I'd spend about 5,000~6,000 yen. If I were to do the same thing in Tokyo, I'd spend 5,000 yen on the first dinner and drinks and then +3,000 yen on the next place for drinks (I also have to say that the food in Sendai also tastes better!) Often parties and events occur far from where I live and I generally would incur transportation costs to get to the event. Needless to say, going out and having fun in Tokyo is easly 2x more expensive compared to Sendai. Include going out for dinners and the occasional drink on weekday with colleagues, the costs here easily add up.
Travel costs for 2008 totaled 436,524 yen. The bulk of my travel expenses for this year was from my trip back to Vancouver + Toronto and the return leg of my New Zealand trip in January. Smaller traveling costs were incurred in Oct, Nov and Dec from trips back to Sendai for the Jazz festival, a wedding and an alumni reunion for my research lab.
Salary deductions for this year totaled 404,682 yen. Deductions represent any direct deduction from salary and government related taxes. These deductions include income tax, pension payments, unemployment insurance and medical insurance. The spike seen in December is a result from receiving a "winter bonus" which is payed to most salaried workers and paying taxes on it. In Japan, bonuses are given out in summer and winter totaling about 2.5 times your monthly salary (as a result, monthly salaries here are a bit lower).
My total expenditures for 2008 totaled 2,614,900 yen (think $26,150). Living expenses (total expenditures - salary deductions) were 2,210,218 (think $22,100) compared to 2,314,981 yen in living expenses in 2007. The numbers are comparable because of the expensive SE Asia trip represented in the costs.
There will be an additional tax (municipal) deduction on my income starting next year as municipal taxes take a year to kick in and will result in a doubling in the amount of taxes I pay (yuck). Those numbers will be seen after my 2009 expenditure summary is compiled.
Finally, attached below is the pie chart of 2008's expenditures:
Compared to the 2007 pie chart we see that the cost of food (12% vs 15%), entertainment (10% vs 18%) and transportation (3% vs 5%) have increased since moving from Sendai. We see a decrease in rooming costs (11% vs 17%) resulting from living in the cheaper company dorm. Service fees remain relatively the same. Travel costs are lower due to the lack of any "long big" trips for this year and in it's place, I get to pay taxes in the form of deductions instead.
I have to say that comparing 2007 and 2008 pie charts is rather misleading because percentages tend to be viewed as linear. For example one might just think that transportation costs from 3% to 5% as something insignificant since it might only look like a 2% increase (it pretty much doubled in my case!) and it also does not do a good job of illustrating the total amount of cash spent. I will limit pie chart graphical interpretations to the year only and avoid pie chart to pie chart comparisons in the future.
Final Comments
By the looks of the data, it does seem that living in Sendai and maintaining a social life is much cheaper (at about 2x) compared to the Tokyo region. Transportation costs are also cheaper for Sendai since traveling around by train is not really required (especially if you live in the down town area).
Most of my disposable income seems to go into the traveling and entertainment category. If I wanted to increase the amount of money I saved, it would be an no brainer to cut back on traveling and going out. Traveling and entertainment costs for 2008 hit in the 900,000 yen range (think $9,000). Obviously cutting down to zero would be quite painful, but cutting down to 450,000 yen (think $4,500) would be rather reasonable (if most of the cutting occured with the traveling part). I spent about 300,000 yen on goods and it might be reasonable to cut that down to 150,000 to get a total 600,000 (think $6,000) in savings over an entire year.
Interestingly $6,000 over an entire year somehow doesn't sound like a huge amount, but it does makes quite a difference when it comes to traveling and having fun. However, if saved and invested properly over several years, it can make quite a difference. I would be interested to run some calculations later on, but that would be for a different post.
No comments:
Post a Comment