* * * * * * * * F R U G A L W A T C H * * * * * * * *
A weekly roundup of how to be frugal in the world's most
expensive country to live (unless you read this!), written
and compiled by Wendy J. Imura.

Regular edition, Sunday, May 23, 2004 Issue No. 009

[We will be away on Sunday, so this issue is being
posted a few days earlier. Enjoy!]


- What's new
- Frugal news
- Frugal tips
- Credits

======================= MAY DAY/M'AIDEZ ==================================

The MAY issue of JI magazine boasts FREE online access!**

Check it out NOW:


(**For a limited time; thereafter all archived contents will be

>> INVENTOR VENGEANCE: Leo Lewis visits wacky Dr. NaKaMats -- and
shows us the inside story of this year's inventor litigation craze.
Japan's star innovators are suddenly ... making money!

>> BIZARRE BAZAAR: NPR's Lucille Craft shows us how Japan's used-car
auctioneers just might outglamor IT and tech -- and why Yokohama has
become the new home base for selling Japan's junks.

>> PAPER SKY FLIES HIGH: Two American brothers are selling Japan to
the rest of the world.

PLUS: Join us at Anime Fair '04; Find out what McCann Erickson is doing
in Japan; Hop north to Hokkaido's forgotten wealth; Learn how to invest
in the freshly fecund Japan -- and have a whisky on us in Kansai.
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Dear Frugal Readers,

After a week of rain, I'm hoping that this finds you enjoying sunny
weather and a pleasant day outside. After so many days of rainy weather,
I'm sure more than a few people have laundry that needs drying, futons
that need airing, or just a burning desire to get out of the house.

Today's topic also can be likened to a bright, sunny day after a long,
gray week -- achieving financial freedom after years of struggling with
consumer debt. While Japan overall is not a consumer debt-driven culture to
the extent that the United States or other countries (South Korea, recently)
might be, many foreigners living in Japan often struggle with a heavy debt
load to pay off.

Be it student debt, credit card balances, a second home mortgage, or alimony,
many people share this "secret" burden, sending home a hefty chunk of their
salaries each month.

The topic of how to go about reducing debt is broad enough to encompass several
books. There are many systems peddled by different self-help or personal finance
gurus that promise to dramatically reduce or eliminate your debt. Some of these
are quite helpful, but I won't explore them here right now. The main focus, I
believe, is learning to "debt proof" your life, instead of continuing the debt-
incurring cycle.

Mary Hunt, author of Debt-Proof Living and publisher of The Cheapskate Monthly
(both favorites of mine), defines debt-proof living as: "You spend less than
you earn; you give, save, and invest confidently and consistently, your
financial decisions are purposeful, you turn away from impulsive behavior;
you shun unsecured debt, you borrow cautiously, you anticipate the unexpected,
you scrutinize your purchases, and you reach for your goals following a
specific plan." (Debt Proof Living, p. 9.)

Whew! That's a tall order, especially for someone who might be struggling to meet
the minimum statements on their credit card bills or rarely has money left over
at the end of the month. But it's a start. Over the months, I'll revisit the
concepts and philosophy behind debt-proof living, and hopefully we can develop
some strategies together unique to our situation in Japan for taming the debt
tiger. If anyone has any stories, testimonies, or questions regarding the
paying off of debt in Japan, please send them to:

... with the title "Debt Reduction."

Happy Savings,
Wendy J. Imura

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-> Speaking of consumer credit, here are some startling statistics.

*American consumer debt totalled $2 trillion at the end of November 2003.
That's the equivalent of about Y200 trillion (at Y100/$), or 200X the annual
net profit of Toyota Motors for 2003. According to various Internet sources,
that is also roughly the same size as Japan's government debt burden, and
the total amount of money tucked away in Japan's postal savings. Wow.
(Consumer debt does not include mortgages.)

*The US isn't the only country addicted to credit card spending. According
to the International Herald Tribune, "there are 99 million credit cards in
South Korea, an average four for every working person. Payments still due on
those cards stood at 122.4 trillion won at the end of June 2003. That is
equal to about a quarter of all the goods and services produced by South Korea
last year." The government has stepped in to help banks deal with the
resulting bad debt issues.

*The United Kingdom is also seeing a boom in consumer debt, fueled by an
increase in property prices and a general economic recovery. Epolitix.com
says the average person owes "at least GBP1,062 on credit cards, GBP1,561
in personal loans and GBP760 in overdrafts."


Handle with Care: How to Manage your Plastic

Here are a few brief tips to help you get a handle on your
credit cards, which can be useful but widely abused tools.

If you are just starting out:
* Choose one widely accepted, low-limit credit card as your
card for use in emergencies, for car rentals, online shopping,
and travel and hotel purchases. Religiously pay off the entire
balance every month -- and don't get any new cards.

If you have several credit cards already, but have low/no balances:
*Either cancel the unused accounts, or more practically, place the
unused credit cards in a Ziploc bag in the freezer. I've got about
four cards residing there now. They're there in case I need them,
but not in my wallet for me to use them. It's a proven fact that you
spend more with a credit card than with cash (usually around 30
Also, always write down your credit card purchases in your household
accounts book, daily planner, or calendar, to both track your
spending and avoid any unwelcome "surprises" on your bill.

If you have many credit cards and high balances on them:
*Stop incurring new debt! If your bathtub was leaking,
the last thing you would want to do would be to add more water.
The first step in getting out of debt is changing your habits --
so stop using the cards. Now begin aggressively paying off your
(More on how to do this in future issues.)

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Written by: Wendy J. Imura (frugalwatch@japaninc.com)
Edited by: JI editor

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