- May 26, 2025
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How to save money in Japan is more important than ever, with the cost of living rising worldwide. If you don’t track your spending, expenses can quickly get out of hand. To avoid financial stress, it’s essential to review your household budget and consider saving as a family.
This article focuses on reducing fixed monthly costs—to help foreign residents live more affordably in Japan.
Table of Contents
Profile of Writer
Masamichi Takayanagi
Financial Planner & columnist;
An independent financial planner with extensive experience as a financial columnist, specializing in a wide range of topics including asset management, life insurance, inheritance, loan products, and credit cards. Over 1,000 articles and projects have been contributed to the field.
1st grade Certified Skilled Professional of Financial Planning, Certified Financial Planner®.
If you’re interested in other articles about finance in Japan, such as NISA and taxes, you might find this article helpful.
Chapter 1: Understanding the Cost of Living in Japan
For anyone who has just started—or is about to start—a new life in Japan, the local cost of living is a major concern. Prices directly affect daily life, so understanding them is essential.
In this section, we’ll take a look at the current cost of living in Japan.
Recent Trends in Japan’s Rising Prices
Japan is also feeling the effects of rising prices worldwide. Food, utilities, and everyday items have all become more expensive.
According to the Consumer Price Index from the Ministry of Internal Affairs and Communications, overall prices in 2024 were at 111.1, with 2020 set as the base year at 100. That’s an increase of over 10% in just four years. Compared to the same month last year, prices have risen by 2% to 4%, showing a steady upward trend in the cost of living.
Source: Statistics Bureau, Ministry of Internal Affairs and Communications
Weak Yen and Rising Costs
One major factor driving up prices in Japan is the weakening of the yen. In 2021, the exchange rate was in the 100-yen range per US dollar, but starting in 2022, the yen began to depreciate rapidly. As of May 17, 2025, the rate hovers around 145 yen to the dollar.
Since Japan relies heavily on imported raw materials, a weaker yen means higher import costs. This, in turn, leads to rising prices across many goods and services, putting more pressure on household budgets.
Chapter 2: How to Save Money in Japan
How to save money in Japan is a growing concern as the cost of living continues to rise both here and around the world. While a promotion or pay raise would help, increasing your income isn’t something that happens overnight.
The good news is that cutting back on household expenses can make a real difference right away. Even if your income stays the same, saving money allows you to put more toward things like your child’s education or a family trip. Let’s look at some practical ways to save money in Japan.
1. Cut Monthly Bills: Smartphone and Internet Costs
When thinking about how to save money in Japan, a good place to start is with your fixed monthly expenses—costs that don’t change much from month to month. One of the biggest areas to cut back is your communication expenses, such as smartphone and internet bills.
Use a Budget SIM
Budget SIMs—often called “格安SIM” in Japan—are a popular way to reduce smartphone costs. These plans are offered by MVNOs (Mobile Virtual Network Operators) that rent network infrastructure from major carriers like Docomo, au, or SoftBank. Because they don’t maintain their own networks, they can offer significantly lower monthly rates.
When choosing a budget SIM, don’t just look at the price. Be sure to compare key points like monthly data limits and connection speeds to find a plan that fits your needs.
Use Family and Multi-Line Discounts
In Japan, most people have their own smartphones, so combining everyone in your household under the same mobile carrier can lead to lower monthly bills. Many providers offer family plans or multi-line discounts, which are often more cost-effective than using separate carriers.
When comparing family plans, don’t just focus on the base price. Some carriers offer extra features like discounted calls between family members or the ability to share unused data, which can further reduce overall costs.
Review Your Home Internet Plan
If you have home internet, consider switching providers. Changing your internet service provider can often come with welcome bonuses, such as temporary discounts or cashback offers.
Some providers also include partner perks, such as discounts on household electronics. Take the time to compare different options and choose the one that gives you the most value for your needs.
2. Cut Monthly Bills: Utility Bills
Switch Electricity and Gas Providers
If your electricity or gas bills feel too high, consider switching providers. Japan has deregulated its energy market, so you’re no longer limited to a single company—you’re free to choose from various electricity and gas suppliers.
Newer companies often offer competitive plans to attract customers. Some feature no basic monthly fees, while others have cheaper rates during certain hours, helping you save depending on your household’s usage patterns.
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Easy Tips to Save on Electricity and Water
At home, small actions can lead to big savings. For electricity, reduce standby power—the electricity consumed by appliances even when they’re not in use. Unplug devices, turn off power strips, or use energy-saving plugs to cut back on waste.
To save water, try water-saving gadgets that adjust flow from faucets or showerheads. These tools help avoid unnecessary water use and can lower your water bill without reducing comfort.
3. Cut Monthly Bills: Reviewing Subscription Services
A useful tip on how to save money in Japan is regularly reviewing your subscription services. These services, like streaming video, music, or other digital content, offer convenience but come with fixed monthly fees—even if you don’t use them often.
Check your subscriptions a few times a year to see if you’re still using each one. Cancel any that you no longer need to avoid unnecessary expenses.
Also, consider switching to family plans if multiple family members subscribe separately. Combining subscriptions under one family plan can reduce your monthly costs significantly.
Chapter 3: Save Money with Furusato Nozei (Hometown Tax Donation)
1. What is Furusato Nozei?
Furusato Nozei is a unique system where you can donate to any local municipality in Japan—whether your hometown or a region you want to support—and receive local specialty gifts in return. By completing tax procedures such as a tax return, part of your donation amount is deducted from your income tax or the following year’s resident tax.
2. Net Cost: Just ¥2,000
If you stay within the deductible limit, you can deduct the amount donated minus 2,000 yen from your taxes. This means your actual cost is just 2,000 yen, yet you get to donate and receive local gifts in return.
However, the donation limit depends on your income and family size. Many Furusato Nozei portal sites offer calculators to help you estimate your deductible limit—make sure to check this in advance to avoid donating more than what qualifies for tax deduction.
3. How to Choose Budget-Friendly Thank-You Gifts
The return gifts you receive through Furusato Nozei depend on the municipality you donate to. If you’re using the system to save money, choose a municipality that offers practical gifts that support your household budget.
Daily essentials like rice, toilet paper, tissues, and seasonings
Some regions offer high-demand essentials such as rice—which has recently risen in price—as well as everyday items like toilet paper, tissues, and seasonings as return gifts. Since return gifts must be produced within the municipality’s area, those looking for rice should consider municipalities known for rice production, such as Yamagata or Niigata Prefecture. Toilet paper and tissues are often offered by cities like Fuji, which is home to many paper manufacturing factories.
Enjoy Local Specialties While Reducing Expenses
Furusato Nozei is essentially a way to prepay your taxes through donations, so by itself, it doesn’t necessarily lead to savings. To make the most of it for household budgeting, consider using the return gifts to reduce your spending on groceries and other essentials. For example, if you receive rice as a gift, you can reduce your monthly food expenses and set that money aside for savings.
Make Use of Points-Based Donation Platforms (e.g., Rakuten Furusato Nozei)
Some Furusato Nozei platforms offer unique point systems where you earn points based on your donation amount. These points can be used for future donations or even converted to other popular point systems. By exchanging them for points that can be used to buy daily goods or groceries, you can further stretch your household budget.
However, be aware that point rewards from donation platforms will end in October 2025. To take advantage of this benefit, consider completing a year’s worth of donations by September 2025 or switching to a payment method that still offers point rewards, such as a point-earning credit card.
Chapter 4: Summary
With the ongoing rise in prices, being mindful of everyday spending has never been more important. Learning how to save money in Japan starts with reviewing fixed monthly costs and making smart use of programs like Furusato Nozei, which can reduce your income and resident taxes while providing daily essentials as return gifts.
To protect your finances and enjoy a more comfortable life, consider putting the money-saving strategies introduced here into practice. If you have any questions, feel free to leave a comment.
