Otoshidama (ใๅนด็) is a traditional envelope containing cash. Kids in Japan receive them from relatives and family friends in the New Year – almost equivalent to Christmas presents in the West. Bandaiโs survey on Otoshidama revealed that the average amount received by a child this year was ๏ฟฅ24,424 (around USD $240).
Guess what the most popular “spending” option of children polled was? Computer games? A trip to Disney Land? The world’s largest Happy Meal?
Nope…most children opted to save.
A savings ethic is built into Japanese culture. As a result,ย families in Japan have, on average, greater savings than people in other countries. Parents, grandparents, the TV, and peers all encourage and incentivize saving. Japanese people, it seems, positively enjoy the process of saving, and dislike spending even more than they like to save!
There are so many national traits and cultural backgrounds to this, but these are some of the main factors:
The War
As in other places in the world, the extreme poverty and famine during and after WWII meant people became very conscientious about making sure they have enough money and food for survival. Some of this rationale lingers, despite the extremes of spending later seen during the height of the Bubble Era.
Cash, Not Credit
This relates to the war too, I suppose. In Japan, there is a focus on the moral lesson of “donโt spend what you donโt have”. (The same idea does exist in the West, although some consider it slightly old-fashioned) As a result, credit card or even debit card spending was slow to take off in Japan; even now, cash is king.
I went skiing in Shiga Kogen earlier this year. An ingrained western mindset made me assume that, obviously, a hotel in a ski resort and the lift ticket office would take payments by card. But alas, no. Not only did they not take card payment, there wasn’t even a single ATM in the town, and the only way we could start skiing or pay for anything in the hotel was to drive down the mountain to the nearest 7-11 to withdraw some cash.
Coupon Culture
There is no negative public perception at all about using coupons or vouchers to get things for free in shops or restaurants. In fact, there seems to be a “well done, you!”-type attitude to people who manage to shop without using any actual money. I know that in the UK, although I love a bargain myself too, there is a bit of a cultural perception about going to the thrift store or using coupons to get things for free. Call it snobbery, but there is an underlying judgment here.
In 1999,ย the Japanese government distributed shopping coupons worth 20,000 yen (about 200 dollars)ย (PDF link) to families with children under the age of 15 and to more than half the elderly population. The coupon had to be spent in the local community within six months. The idea was that the use-it-or-lose-it nature of the coupons would stimulate more spending than a conventional tax cut. It turned out there was little impact at all – people just saved even more cash! There are also many “eat all you want” type offers and even “drink all you want” (unthinkable in the U.K!) in Japan, and so although people eat out a lot, they can do so at a very low cost. (Previously on UJ,ย we highlighted the trend in “subscription programs” for food and booze, which allow people to economize while also indulging.)
The Family Ledger
Kakeibo (ๅฎถ่จ็ฐฟ, literally meaning home finance ledger), was a concept first introduced in 1904 by the country’s first female journalist, Motoko Hani. This consists of a notebook where all the ins and outs of one’s money are tracked along with inspirational messages to encourage people to reach their goals. In fact, the Kakeibo is now sweeping through Europe as a new saving method that could help you save 30% or more in your family budget.
As with many other countries, until very recently, men worked and women were at home. A womenโs role, other than all the house and child care, included financial control. The characteristic of the Kakeibo is that it splits spending into categories of survival, optional, cultural and extra. At the end of the month, one can compare actual money with spent money, and reflect on what can be done to save.
Japanese housewives combined the concept of Kakeibo with the amazingly beautiful and addictive array of Japanese stationery, turning it into a kind of crafting. The Japanese blogging site Ameba is full of Kakeibo examples and tips. Like the bento or the Kondo method of tidying up, itโs another example of a necessary household task thatโs been turned into a national art and pastime.
Respect
…for the money itself. Brand new and clean bills are considered great gifts. You can buy wallets in Japan that sterilize bills. Money is thought of as something to be respected and valued – quite rightly. There is very little counterfeiting and great enthusiasm for accumulating hard currency. This, combined with a mistrust of banks, encourages people to save their cash in theirย tansuย (็ฎช็ฌฅ; cupboard) instead of banks. A lot of Japanese saving is in the form of cash in their own house โ either as tansu chokin (cash in cupboard) or hesokuri (cash put aside secretly from the monthly budget traditionally by women for a โrainy dayโ). Many Japanese people prefer this form of cash over interest-earning bank deposits. Very low-interest rates, though necessary, donโt discourage this.
National Health
Japanโs health system is a part payment scheme where, for approved treatment and drugs, the system pays for two-thirds and the patients pay for a third. There is of course insurance to cover medical costs; however, as with saving in banks, a lot of people mistrust these types of medical coverage. Thus, itโs common for people in Japan to have cash put aside specifically for emergency medical care.
Perhaps saving is just too deeply embedded in Japanese culture for it to come down to whatever economic stimuli are applied. There is, however, a lot of card payment technology being installed and internationalized with the imminent Rugby World Cup 2019 and Tokyo Olympics in 2020, so perhaps some change is afoot.
[As of this writing, there has indeed been some change. In particular, the COVID-19 pandemic has seen many places in Japan go cashless that had until that point been quite resistant to that change.]
