Terrie's Job Tips -- Cost of Living in Tokyo 2008 - Part Two: The Middle Path

As I described last week, the lifestyle costs for expats is a different universe to most of us. I was once told by a major American IT firm that bringing a 35-45 year old expat boss on a JPY20M salary and his family to Japan costs them between JPY40M and JPY50M a year. This is clearly why most foreign firms have very few expat employees, and those that do have foreigners try to hire them locally.

This week we cover a "middle path" home budget, where you may be looking at taking a job in Japan, but your company isn't offering expat conditions. With a sense of adventure, you can comfortably enjoy a fusion of East and West, being pragmatic on appropriate spending and yet being able to have a reasonable lifestyle. What is good to know is that Japan has been stuck in deflation for 17 years (consumer prices only started moving this year) and so the cost of many items is now surprisingly cheaper (and yet better quality) than they are back home.

As with last week, we're focusing on families and related costs.

A. One-time costs:

1. Second-hand car, late model, includes registration -- JPY1.5M
2. Apartment deposit, 80-100 sq. m. about 45 minutes away from center of city (deposit including 5 months rent and 1 month in advance) -- JPY2.1M
3. Basic furniture for 4 bought from Japanese mail-order catalog -- JPY1M
4. Lower-cost shchool fees (Yokohama or non-central international school/kindergarten) yearly -- JPY1M x 2

B. Monthly:

1. Apartment rent, Inokashira line (near the Inokashira park) or Denentoshi line -- JPY350K/month
2. Food for 4, including some foreign items -- JPY120K/month
3. Eating out for 2, once a week plus baby sitter -- JPY80K/month
4. Gas, car maintenance -- JPY40K/month
5. Clothes, utilities, misc. -- JPY100K/month
TOTAL: JPY690K/month => JPY8.28M

For our middle-roaders, the big hurdle is the initial costs in the first year, where you could be looking at a bill of as much as JPY14.88M. As I noted last week, companies will usually spring for the apartment deposit, because they get most of it back anyway, but some of the other one-time costs probably need to be spaced out across several years to fit within an average family's budget. You can see now why I suggest that the breadwinner comes to Japan first, so that they can sock away some cash (read next week's to see how to do this) in order to cover these set up expenses.

Apart from deposits and furniture, another major hurdle for most newcomers is schooling for the kids. Once you are sure that you absolutely want to bring your family to Japan, choose a suburb about an hour out of Tokyo and consider putting your kids into a local (Japanese) school. There are more and more non-Japanese kids doing this, both from returnee families and also from parents from South America and Asia. I have a number of friends who have chosen the full-immersion option and have sold the idea to their kids by telling them what a great adventure it will be.

You'll probably be worried about how your kids will fit in, be sure to pick one of the more affluent suburbs (such as those in the Southwest of Tokyo), in Yokohama, or really out in the sticks - so that your kids will be novel enough to remain a center of attention. There are some rough locations in suburban Tokyo and you won't be doing the kids a favor by sending them to schools there.

Sometimes putting foreign kids into Japanese schools works and sometimes it doesn't, but of course those kids who do the full-immersion typically speak great Japanese after about a year. If after 6 months you're not seeing them fit it (yes, it takes at least 6 months for them to make friends and to start to get a handle on the language), then your options are one of the lower cost international schools outside central Tokyo, and there are more coming on stream, or home schooling. These non-expat international schools are well priced and have a good volunteer atmosphere thanks to supportive parents and local authorities. They typically charge around JPY800K - JPY1M per child per year. Most cater for younger children to early teens and apart from the critical university preparation years, are a good solution.