How frugally can I live?

It is necessary to calculate your annual expenses, if you are planning to commit early retirement, because you have to make your financial plan for your whole life.


Frugal / Tax Credits

I recorded my monthly expenses for more than one year, which became my basis for that calculation. After starting to record my expenses, I definitely came to spend less. Just a thought of checking expenses made me frugal. That is good!

So, the annual expenses of a single man living alone like me are calculated in the following way;

- Flat rent
JPY 35,000 x 12 months + others = 450,000 (USD 4,500)

- Utilities
JPY 10,000 x 12 months = 120,000 (USD 1,200)

- Communication
JPY 6,000 x 12 months = 72,000 (USD 720)

- Grocery and wearing
JPY 25,000 x 12 months = 300,000 (USD 3,000)

- Income tax / Resident tax
JPY 20,000 (USD 200)

- Public health insurance
JPY 50,000 (USD 500)

- National pension
JPY 0 (exempted)

- Other insurance
JPY 10,000 (USD 100)

- Medical expenses
JPY 10,000 x 12 months = 120,000 (USD 1,200)

- Transportation cost
JPY 10,000 x 12 months = 120,000 (USD 1,200)

- Others
JPY 100,000 (USD 1,000)

TOTAL : JPY 1,370,000 (USD 13,700)

Working for money for fun

This does not included expenses for entertainment and travel, for which I plan to spend money which I earn after retirement. I can have options; if I want to spend some money for entertainment and travel, I have to earn that. If I do not want to work anymore, I do not spare money for entertainment and travel ,and will be sitting home.

Is it too small?

Some people may say it too small for living (even alone) in Japan, which seems very expensive country. But my recored says it is enough. We have public health insurance system and it is not necessary to have expensive private medical insurance. And Tax and health insurance premium are very low for people who do not earn much money. Rent is not cheap, but if you select to live in the countryside, you can rent a good flat with this USD 350/m. I am planning to live in suburban area of Tokyo at this moment after quitting my job and the flat I could rend with this money is quite small - 1 room for less than 20 m3. But I have not paid much attention to my living, and I think I won't.