Japan has been struggling with inflation for years after a long period of deflation. Now he succeeded. In addition to rising domestic prices, the falling yen forces the Japanese to import inflation. Inflation in Japan grew up to over 2% for the first time in over 13 years.

Unlike the inflation that accompanied economic growth during the boom of the 1970s, rising prices are now not accompanied by rising wages, he writes. one of the main economic newspapers from Japan

Inflation without rising wages is extremely problematic and puts a lot of pressure on livelihoods.

For example, in 1970, when Japan was in a period of high economic growth, the consumer price index was 31.5%. In 1980, it was 74.5%, and in 10 years, prices increased by 2.36 times. But people’s wages were also rising, and the average monthly income was ¥112,949 in 1970, and ten years later, in 1980, it was ¥349,686, almost tripling. This is a picture of inflation accompanied by economic growth.

However, there is a strong possibility that the current inflation will not be accompanied by economic growth, where recession comes with rising prices.

How do we fight inflation?

There are two strategies to protect against inflation: reduce spending and simultaneously increase income.

How we reduce costs:

Reduce living expenses by saving money. For example, get married

What can you do to reduce your costs? One way is to move in with other friends or acquaintances. If you are single, you can marry and live with a man.

It has long been often said that “one person cannot afford one thing, but two can”. And looking at the data of the Bureau of Statistics, those related to the survey of family budgets, they look like this:

• Total consumption expenditure of one-person households: 155,048 yen

• Total consumer spending for households with two or more people: ¥279,024

Even if there are two or more people, these costs are not doubled, but 1.8 times. This is a simple calculation that shows us that living as a couple actually saves money.

Find more statistics on Statista

Another way to save: split the costs with friends/neighbors. Go to a flea market, not a mall

The concept of “sharing”, where rental homes and cars are shared and used, is a way to save money.

Originally, the idea of ​​the “sharing economy” is a new lifestyle where goods and services are exchanged through a platform that uses smart technology.

Space (shared housing, parking), transportation (shared cars, bikes), skills (cleaning, babysitting, cooking), money (crowdfunding), goods (flea market, rental services), etc. can be shared. ., thus in response to a new era of inflation.

Consider that food prices, such as oil or wheat, have risen amid the war in Ukraine. Including in Japan, there is no doubt that prices for gasoline, utilities, transport, and logistics will rise even more. If prices are rising and wages are not rising because of a recession, you have no choice but to cut spending.

You also have the option of moving to a country or region where prices are lower if you work remotely. But it depends on how much the yen depreciates. If the yen falls to 150 or 200 to the dollar, it will become difficult to go abroad. There are countries in the world where prices are lower than in Japan, but, unfortunately, the standard of living in such countries is much lower than here.

Three ways to increase our income

1. Find a second job. Due to the spread of the pandemic, remote work has become commonplace. We recommend living in the countryside. We know that even if you have a vegetable garden at home, it is difficult to maintain it without experience and skills. There are also many internal risks in rural areas. There are times when costs rise and you have to think twice about moving there to keep up with inflation.

2. Look for a better paying job. The income from the side business is about 60,000 yen per month. 30% of Japanese have already applied for part-time work. Since the time required for commuting has decreased, it can be assumed that there are fewer obstacles to obtaining a secondary job.

How much can you really make per month from your side business? According to research institute Persol’s “Survey on Side Job Awareness”, the average monthly income from a side job is ¥68,200. According to Mynavi’s career change survey, the average income of those who actually do it is ¥59,782 (survey conducted in November 2020). In other words, 50,000 to 60,000 yen per month would be a reasonable income.

There is also an opportunity to become independent and open a business. Our notion that we are tied to one company and work there until retirement is rare in the rest of the world.

3. Take risks and invest. If you keep your money in the bank, it will soon evaporate. The financial literacy program was launched in school education in April. Careful management of money in the era of inflation is necessary not only for pensioners, but also for young people. People who don’t take risks never save. Basically, there are three main types of investments: in shares, in bonds or in specialized funds. Start with small amounts. In an age of inflation, excuses like “I didn’t know” and “I don’t want to take the risk” don’t work.