Good with Money

You might not need to be to be happy

Even the simplest aspects of personal finance can seem difficult or complex, but in reality if you follow three simple rules you will rarely have money problems:

That is literally all you have to do to have a secure, financially stable platform to build your life on.

However, there are many ways to achieve these, most of which I am too lazy to do myself.

Track your spending

People swear by this, but it bores me to tears and I don’t really do it any more. I did try this for a few months a while back and it was interesting to see where our money was going, but haven’t really bothered since. An easy way to do this is to use Moneytree (smartphone app) and do most of your spending a credit card. The app will track spending categories automatically and if you take the time to train it can be pretty accurate.

Make a budget

Again, this is not something that works for me, although many people say it is effective. You Need a Budget seems very popular.

Cook all your meals (preferably in batches)

This not only saves you money, but is also a healthier option. I have been cooking a bit more recently, and my wife cooks as much as her busy job will let her, but we still eat out quite a bit.

Don’t spend lots of money on hobbies, travel, etc.

Oops.

HOWEVER

Despite thoroughly failing at these important habits, we manage to save more than half our income and are in pretty good shape financially. Here are our saving graces:

Minimize the big expenses

We don’t spend much on rent, transport, and communications. Our mortgage is under 30,000 yen a month, we bought our car second-hand over ten years ago for cash, and our mobiles are from an MVNO. These low monthly expenses give us a lot of flexibility in our spending.

Pay ourselves first

Every month, our iDeCo contributions are taken automatically from my salary and my wife’s bank account. On payday my Monex account takes cash directly from my bank account to buy mutual funds. On the first of the month I take money from my wife’s account to invest in her Rakuten account. When I get my bonuses they go straight into my NISA account. All these payments happen automatically or are a habit. The money just disappears and our investments grow. We don’t really think about it or miss it.

The way to get started with this is to start slow and increase the amounts over time.

Er, that’s it.

There are lots of ways to do well financially, but you can’t beat the basics:

How about you? How do you approach your finances?

8 Responses

  1. Good summary of a sensible approach, thanks.

    You mentioned that you use Monex to do monthly purchases of mutual funds automatically. Do you know if SBI have a similar product? I’ve looked for one, but haven’t been able to figure it out.

    Thanks,
    Brian

    1. This came up on the Forum recently. While Monex and Rakuten allow you to set up automatic payments and have them come out of a bank account, SBI doesn’t seem to have this functionality yet.

  2. I share your aversion to making a detailed budget and tracking all spending. Instead I set a savings goal each year, usually as a specific amount but sometimes as a percent of income, and track where I put the savings.

  3. The subtitle: “You might not need to be to be happy” needs an edit.

    >> no need to publish/approve this comment