Tag Archives: finance

Cashing Change and Begging Someone Else to Do It

I carried a lot of money around today. Woe to anyone who tried to steal it, though. It probably would have given them a hernia.

Today was the day I decided to drain the piggy bank (more on that here) and deposit the contents in a real bank. There were, of course, some complications.

When I first started doing this, my habit was to wait until the jars were full and then take them to the bank, hand them over to one of the nice clerks and then enjoy a book whilst waiting for them to count the change and give me bills, or deposit the money directly to my account and I could extract it at my leisure.

Unfortunately, one day 15 years ago, I handed the change over and the nice clerk suddenly sucked on her teeth and became apologetic (translation: you in trouble, foreign guy). Instead she sent me to the ATM where I was expected to enter the change by hand and let the ATM do the counting (note: Japanese ATMs can take coin deposits). I even tried to stack the coins on the counter and she just kept apologizing.

Unfortunately, the ATM could only take a few dozen coins at a time requiring me to make a few dozen deposits. A half hour and a few dozen swear words later, my account was full of cash and my bank book was full of a several dozen small deposits.

After that, I found a different bank. The only problem there was they charged a few dollars for handling all the coins.

Today actually had a few jobs: Deposit the change in my account; convince a nice clerk to do it rather than me; and take money out as today was also pay day. The problem is, as of Monday, I don’t have a bank card. This meant I needed a nice clerk’s  help.

The other problem was the coins were surprisingly heavy and I forgot there isn’t a branch of my bank in my town. This sent me the wrong way at first and then I got to carry the coins to the bank where I’d worked with Miss Patience about my name, address and bank card.

Luckily, after a little explaining, begging and playing dumb, a nice clerk took the change and deposited it for me and I was able to withdraw money for rent and food and taxes. I also have a little for more important things like pens and knives.

The International Bank of Dad is Run by a Jerk

My oldest is not happy with the International Bank of Dad. This is because, to her mind, the IBD president is rather unreasonably insisting she spend her own money.

She doesn’t realize things are about to get worse.

Because yesterday was brass band performance day, today was a day off. Our oldest therefore decided to meet up with her friend and go to karaoke at a place one station away from ours.

She first, however, tried to a get a no-strings attached grant from the IBD. The grant was refused and the shockingly handsome president of the IBD instead extracted money from her account and told her she could spend that.  He also, rather kindly, exchanged the loose coins for an actual note. This earned a huff and an eye roll but little argument.

(He also carefully explained the difference between “being home by 6:00” and “calling at 6:00 to say you’ll be home soon” and the consequences involved with the latter.)

Our oldest arrived home with fifteen minutes to spare and immediately began demanding money for tomorrow’s outing. Tomorrow she’ll be serving as an assistant at another battle of the bands. This involves moving chairs and serving as an usher. It also means she’ll need money to get to the performance hall.

Once again, she tried to get a no-strings attached grant.

The dashing president of the IBD told her she shouldn’t have spent her money today if she knew she’d need it tomorrow and tried to explain the concept of “planning ahead” but then remembered he was talking to teenager who’s concept of money seemed to involve , well, teenager logic.

The charming, yet humble president of the IBD then told her he’d advance her allowance to cover the expenses. This was met with a reply that reached an “Occupy Dad Street” level of outrage and obnoxiousness. Our oldest didn’t understand why she had to spend her own money on something that was volunteer. (In her defense, the distinguished president of the IBD didn’t understand why he had to spend his money on something that was volunteer either.)

In the end, the issue was left unresolved. There will, however, be a deal made. The IBD will front the money in exchange for two-and-half hours of labor (laundry, dishes, cleaning the kitchen, etc.) This is how long our oldest would have to work to earn the money the hauntingly good-looking president of the IBD plans to lend her.

She won’t be happy, but the alternative is doing the laundry, dishes and kitchen cleaning for free as a punishment.


The International Bank of Dad’s Good Intentions

At some point when our oldest was still in elementary school, I came up with this plan to teach her something about money. The results have been mixed.

The plan was to give her an allowance based on her age. She got 100 yen per month for each year of her life. When she was eight, she got 800 yen per month and then she got 900 yen per month when she turned nine.

There were also a couple rules. First, she had to save 10% of her allowance (after doing the math to figure out what that was) and she had to set 10% aside to donate to those in need. This rule also applied to Christmas cash, New Year’s Money and any birthday cash.

I started referring to the 10% donation as “money for sick people” and when I say that, She Who Must Be Obeyed immediately starts coughing and saying “I’m sick. I’m sick” and I have to hide the money and pretend she doesn’t know where it is.

In addition to all that, I founded the International Bank of Dad. The 10% deposit in the bank, along with any extra savings, earns 5% interest per month. This means 100 yen will have earned an extra 80 yen at the end of the year. (No you may not open an account with IBOD; but if you have any bailout money, please send it.)

When our oldest entered junior high I doubled the money (she gets her age x 100 every two weeks now) and scaled the interest back to something I could actually afford.

When our youngest turned eight we started the age X 100 yen per month plan.

The mixed results come from a couple things, first She Who Must Be Obeyed was amused by all this but not especially dedicated to it. It was, and is, as far as she’s concerned, my hobby and not her problem.

Also, although she did well at first, our oldest is now a teenager which means, by default she’s a Keynesian and her motto is “Spend Baby Spend”. Being a true Keynesian, she’s also taken to borrowing from She Who Must Be Obeyed for larger purchases. (It’s amazing what you can do with other people’s money.)  Unfortunately, SWMBO usually makes the loan without actually working out the terms and arguments ensue.

Our oldest also confiscated money intended to be split with our youngest, although she simultaneously denies this whilst claiming our youngest donated that voluntarily.

The International Bank of Dad has intervened in a few instances by paying allowance directly to She Who Must Be Obeyed or keeping a large portion of it and facing the brunt of the argument.

I suspect that eventually the International Bank of Dad will be forced to intervene more fully. Debtors prison (dishes and housecleaning) and confiscation (her tablet will be mine) will ensue.


Old Money and New Money and Confusion

Yesterday I talked about how living overseas can turn you into a minor currency speculator. Today I’ll talk about how, when I was in Albania, the Albanians clung to their old money but accepted new money.

When we got to Albania, one of the things we were warned about was the difference between Old Lek and New Lek. Basically, in 1965 or so, the then dictator Enver Hoxha (“xh” is pronounced “J” as “jump”) revalued the Lek and introduced new notes and coins. The new value was 1 New Lek for 10 Old Lek. If you had 10,000 Lek in the bank it suddenly had a value of 1,000 Lek.

The problem is the Albanians, being stubborn and prone to keeping their history close and alive, continued to price things in Old Lek and refer to them in Old Lek but would accept the New Lek value. For example, if the street vendor said “30 lek” he would take 3 lek. If the shopkeeper said “100 lek” she would accept 10 lek.

Adding to the confusion, the price tag on something you’d asked about would say 20 Lek, but the vendor would say “That’ll be 200 lek” as he handed it to you.

Note: When I was there $1 US = about 105 Lek.

It got confusing but most vendors, to their credit, were honest with us. With a couple exceptions.

For example, when we first got to Albania, one of my fellow volunteers payed 250 lek for rice (or some other kind of food). Our language trainers’ faces turned very sour and they made him take them to the vendor so they could help him get his money back. The price was actually 25 New Lek, but had been quoted in Old Lek.

In my case, I remember being confused about if the Chinese-made fountain pens I was buying were 150 lek each or 15 lek each and the vendor seemed to be encouraging the confusion. I gave the vendor 30 Lek and he seemed satisfied.

Of course, part of the problem was that we were seeing the prices as cheap, even when quoted in Old Lek. Despite that, we were instructed not to drive up the prices of goods by paying Old Lek for them.


International Financial Speculation on a Small Scale

Note to family and friends: With a weak yen, it’s a great time to visit Japan.

Every country, for the most part, is trying to ruin their currency. Unfortunately Japan has momentarily succeeded.

First you have to understand that when you move to a foreign country you are given a handful of funny looking bits of paper they call “local currency”. The problem is, you have no frame of reference for it and your brain immediately defaults to your home currency. I remember during our orientation in Tokyo that speakers would describe something as 20,000 yen and we newbies would be like “whaaasat?” and they’d say that’s about 180 dollars and then the people from the British Isles and/or Australia would be like “whaaasat?”

Once you learn the money, it becomes second nature and then you give a talk to newbies and they go “whaaasat?” when you mention a computer costs 90,000 yen. However, except for that case, you don’t even think much about the dollar or pound value. You just live and use the local currency.

However, if your goal is to send money back to your home country, you immediately become a minor currency speculator. You analyze whether or not you should send your 200,000 yen home now when it’s worth 1,800 dollars or wait and risk the yen weakening and your 200,000 being worth only 1,700 dollars. But if the yen strengthens, your 200,000 yen is worth 1,900 dollars.

This is important because your salary never changes but its value in your home currency can change a lot, as can your bragging rights. When I first came to Japan I had a 300,000 yen per month or 3,600,000 yen per year salary that didn’t change for three years. This is how the value in dollars changed each year. (I’m including the value when I finished that job in 1999.)

1996: $34,286 per year
1997: $30,000 per year
1998: $27,692 per year
1999: $35,643 per year

Just three years ago that same salary would have been $47,368.

The other thing you become aware of is why countries are trying to ruin their currencies: Stuff. By weakening your currency you increase exports (albeit by driving up inflation and making your country a crappy place to do business but at least someone’s getting rich).

As an expatriate, though, you get really good at price comparisons and adding in tax and shipping to decide if buying local is better or if importing is worth the money, the effort and the wait. For example, three years ago if you wanted to buy a laptop and the price was $1,000 in the USA and 100,000 yen in Japan, it would be worth the time, effort and wait to import to Japan because $1,000=75,000 yen, a savings of 25,000 yen or $328.

Now, however, that same $1,000 laptop would be 115,000 yen to import but only 100,000 yen to buy in Japan.

A couple years ago, I purchased a couple bags from an online retailer here in Japan. Soon after I made the order the yen started to get weak and the retailer cancelled most of my order. I suspect they were importing products from the USA and taking advantage of the margin they got by selling in yen. Then, suddenly the margin disappeared along with my order.

Confused? Welcome to my world.

Edited on 11/8-2014 for clarity.

Long Memories of Lousy First Impressions

In my experience, I make a decent first impression. It’s the second and third ones I have trouble with. However, here in Japan, first impressions are pretty much everything and you don’t always know which one you’re leaving. In my case the first impressions involved genetics and money.

Thanks to the crap shoot of genetics, I’ve pretty much been granted thin lips and denied anything resembling a bottom lip. (My other option, also coming from my father’s side, was a nose that points up.)  Because of this, when my face is “at rest” I have a naturally angry expression that tends to make me seem less than approachable to people who don’t know me. (People who know generally don’t approach me.) This all gets worse if there’s any tension, say I’m meeting new people. Mind you, I didn’t always realize this.

Soon after meeting all my colleagues at the Board of Education in Nou-machi, I’d often hear people say things along the lines of “Dwayne is very serious.” I didn’t think much of it at the time and would simply play along. “Yes, I’m very serious.)

Months later, during a drinking party, Mr. Komatsu, my supervisor got drunk and told me, quite seriously, that I “didn’t have a kind face” and always looked serious but that when he got to know me he realized I was a nice guy. I was shocked by this, and am still not sure if I should take it as a compliment. This opinion was later confirmed during our weekly trip to the hot spring bath. I told the story about being told I didn’t have a kind face and the men I was with both said, at the same time and quite strongly “you don’t”. Since then I’ve worked to become more aware of the impression I’m leaving, but I still don’t have a bottom lip.

I also left an odd first impression regarding money. Part of the reason I moved to Japan was to earn money to start paying off credit card debt. As such, after I got my first paycheck, I sent a huge chunk of money home and resigned myself to a month of little social life (situation normal, in other words). I did that again the second month I was there, but that time, right after the money had been sent, Mr. Komatsu (who hadn’t yet told me I didn’t have a kind face), told me that he needed money from me to pay for my July pension payment.

I won’t get into the long story of why he needed this except to say that it would help me in the long run. However, in the short run, I kept repeating that I didn’t have any money because I’d already sent a bunch home. He just kind of nodded and then went off an paid the money out of his own pocket without telling me. I was mad that he’d do this–and didn’t realize how big a deal it was for a Japanese colleague to intervene like that–but paid him back the first chance I got. For the rest of the time he was my supervisor, Mr. Komatsu would ask me “money okay?” every time I saw him. He did this even though I never had any money problems after that.

Three years later, as I was at the train station getting ready to leave Nou-machi and move to Tokyo, my second boss, who hadn’t been involved with the money situation because he wasn’t my boss yet, asked me “money okay?”

I tell that second story to trainees just coming to Japan. Your first impression is pretty much the only impression you’ll get to make in Japan. And even people you don’t meet will get that impression.

Fill the Jar Empty the Jar Never Break a Twenty Be an Evil Banker

In yesterday’s post I mentioned that, as part of paying off the final part of my debt, I drained the piggy bank. I also said that wasn’t a joke. Instead, it’s the result of finally paying attention to 1–something I learned when I was a kid and 2–something I saw a friend do in high school.

When I was growing up, my paternal grandparents used to put their spare change in a large mug. When we visited, my sister and I used to divvy up the contents and go on cheap toy and candy binge. There was usually about five dollars in the jar (about $22 now) and it was there every time we visited. (Along with a jar of candy my grandmother always kept full, but that’s another entry).

In high school, after we moved back to Kansas, my friend Darren appeared to have a rule where he never broke/spent a twenty dollar bill ($45 now). The result was an impressive pile of twenties at one end of his room that, if I remember correctly, he eventually spent on a new shotgun. (Remarkably, I never stole any of those twenties. Damn my Christian upbringing. Also SHOTGUN.)

Decades later, after I arrived in Japan, I found myself confronted with large handfuls of large change. Japan basically did away with it’s equivalent of the $1 and $5 dollar bills and replaced them with coins. Remembering my grandparents, I started saving my change in a jar. I also stopped spending change and instead spent notes, even if I had enough change to make the purchase. This had two results: 1–it made me think I was spending more than I was–I had seven 1,000 yen notes this morning, now I only have three. What have I done? 2–One day’s change could add up to a lot.

Fistful of Yen

A fistful of Yen. This is about $20.

The other advantage of using the jar is I got to see the money grow. This was awesome and rather inspiring, but because it was coins, it was annoying to sort and carry so I never spent it. Eventually, when the jar got full, I dragged it down to the bank and deposited it, much to the annoyance of the bank. I’ve paid for vacations in Japan and plane tickets home with the change.

Note: Now, I know that many wise and financially literate people would argue that I should have cashed the change out sooner and sent it some place where I could earn interest on it. Those people are absolutely correct, except they’re overlooking the psychological importance of actually seeing the money grow. It is much more powerful than seeing the numbers in a bank account change.

The other thing I did started when, in 2,000, Japan began printing 2,000 yen notes. The public reaction was underwhelming. People in the USA have more excitement over and interest in dollar coins than the Japanese had for the 2,000 yen note. They were difficult to spend because merchants didn’t want to deal with them and no one changed out machines so that they could accept 2,000 yen notes. They therefore made a great savings source. I saved every 2,000 yen note I got and then eventually cashed them in. I did the same when Japan released new 1,000 yen notes. I saved every crisp one I found as well as every old one.

This latter idea, saving a certain kind of bill, is what I encourage my friends and family in the USA to do. Stop spending ten dollar bills. Just stick them in a jar. It’s weird at first, but you have to want to see that jar fill up.

Finally, the last thing I did, and still do to build up extra savings beyond the 20% or so of each paycheck we already save, is to be my own greedy bastard banker. Every time I take money out of my account, I charge myself an outrageous 20% ATM fee. For example, if I take out 10,000 yen, I immediately pull out 2,000 yen and put it in an envelope in my bag. As soon as I get home, I put it in my savings pouch. (Yes, I know: banks, interest, etc. In my defense, most Japanese savings accounts pay no more than .02%. That’s not 2%, that’s .02%) and exchanging into dollars costs money so it’s better to build up some cash.

If I know I’ll be spending the money on frivolous stuff, I tax myself an extra 10%. I know, I know. Some one should regulate me, so to speak.

Deeply Into Debt and Out Again

To steal from Hemingway, sort of, I got into debt two ways: full speed ahead and then significantly faster than that. I got out of debt the same way Mike Campbell went bankrupt: “gradually and then suddenly”.

Basically, I was the sucker who enjoyed the “free” credit cards handed out in the student unions at universities. This was combined with an “I can’t be broke; I still have checks left” attitude and student loans. That combination would eventually put me around 100,000 dollars in debt with no Ph.D. (long story that) and no Porsche. I didn’t even have a decent watch. (Although I did get a good laptop so all was not lost.)

Part of my reason for going to Japan, besides taking a break from academia, was to get some cash and pay off some credit card debt.

About the time I was thinking about proposing to She Who Must Be Obeyed (then known as She Who Would Eventually Be Obeyed) I started making token payments on my student loans. They didn’t even cover the accruing interest, but I did it to establish the habit of sending regular payments. At this time, I still didn’t know how much I owed and denial played games with my math abilities. I told She Who Would Eventually Be Obeyed what I thought the number was and, surprisingly, she stayed around.

It turns out I was only off by 25,000 dollars or so. When I told She Who Would Eventually Be Obeyed what the real number was she had a much stronger reaction. Because we were already engaged at that point, she could have called off the engagement and sued me for lying. (Side Note: Japanese can also have marriages annulled if they find out their partners lied about such important things.) I pointed out that I didn’t have anything worth suing for and that being stupid was not the same thing as lying. (To this day she still doesn’t quite agree with that assessment.)

A year or so after I started the token micro-payments, I started a debt-snowball to get rid of my credit card debt and get my entire debt down to just my student loan. My financial illiteracy created and printed a payment plan that paid off everything in under ten years and would have worked great except I forgot to account for interest. I scribbled corrections on that printout and then kept it as a reminder to pay attention and figure out what the hell I was doing. (And also to print out an actual debt amortization schedule.)

Once I got to having only the student loan, I started throwing every loose yen I could at the debt, and also managed to start some actual savings. The loan number slowly crept down and I celebrated every time it crossed a 10,000 milestone. Early on, I to got the point where I could completely pay off my credit cards every month. I’m pleased to say I haven’t rolled over any credit card debt to a second month in 10 years.

Then, after the 2011 earthquake and tsunami, I noticed that our total net worth, as pathetic as it was on a single salary (plus lots of part-time jobs), was actually bigger than the total amount still owed. The constant earthquakes and the constant threat that we might have to move suddenly (and leave my job behind) told me it was time to get rid of the debt completely.  I closed out some CDs, drained the piggy bank (not a joke, but a long story) and sent it all in. For one glorious month, my debt handler Sallie Mae owed me money (that they eventually just disappeared as “fees”.)

Since then, we rolled most of the old loan payment into savings (well at least until last year when we did some traveling, both expected and unexpected). Even nearly three years later, it is still very odd not having to worry about making a payment and dealing with creditors. I admit I still hold my breath every time a clerk runs a credit card approval during a purchase.

Surprisingly, suddenly having  this odd little thing called “cash” around didn’t start burning a hole in my pocket like I feared it would. I did decide to share the wealth a bit buy buying knives and some other goods from new makers and artisans and I also helped out an old friend. Other than that, we’ve been saving and it’s surprisingly relaxing.