[+30,000 Yen in Take-Home Pay] 7 Fixed Cost Reduction Checklist Items Every Employee in Their 20s Should Do Right Now

Hello, I'm Ryosuke Kitamura. I run three companies, but I still keep track of my monthly household budget with my wife.

I have a question for you, out of the blue.

The answer is by far, "reducing fixed costs".

A raise depends on the company. On the other hand, fixed cost reduction can be implemented by your own decision starting today, and once done, it will be effective forever from the following month.

Today, I will share 7 fixed cost reductions that I think every employee in their 20s should absolutely do. If you do them all, 360,000 to 500,000 yen per year will be saved.

Why target "fixed costs"?

When people hear "saving money," many first think of
"making lunch cheaper," "turning down invitations to drink," or "turning off lights frequently". But this has
terribly poor cost-performance.

Because,

• You have to be conscious of it every day (it's mentally exhausting)

• The effect is only a few thousand yen a month (small for the effort)

• It tends to lower your quality of life and affect relationships

On the other hand, fixed cost reduction is:

• Once you change the settings, you don't have to do anything else

• It works on a scale of 10,000 to tens of thousands of yen per month

• It doesn't lower your quality of life at all

In other words, the "cost-performance of saving" is on a different level.
That's why the golden rule is to start with fixed costs.

7-item checklist

1. Switch to a budget SIM (Save 5,000 yen/month)

If you are still paying 8,000 to 10,000 yen a month with Docomo, au, or SoftBank, stop it right now.

Recommendations are:

• Rakuten Mobile (3,278 yen/month for unlimited data)

• povo (pay-as-you-go, from 990 yen/month)

• ahamo (Docomo network, 2,970 yen for 20GB)

The switching process takes 30 minutes on your smartphone. If you don't do this because you think it's "too much trouble," you will end up throwing away 60,000 yen every year.

② Switch your electricity provider (-1,000 to -2,000 yen/month)

Switching from TEPCO or KEPCO can result in a difference of 10,000 to 30,000 yen per year. If you enter your address and current electricity bill into "Enechange," you can find the cheapest plan in 3 minutes.

My recommendations are Shin Energy or Looop Denki (comparison is essential as rates fluctuate by season). If you're stuck, try simulating all costs on a comparison site.

③ Limit life insurance to "term medical + prefectural mutual aid" (-15,000 yen/month)

If you are an employee in your 20s paying 30,000 yen a month for insurance, you are almost certainly overpaying.

It's a dark history of mine that I was paying 50,000 yen a month for insurance right after I became independent. For a single person in their 20s, Prefectural Mutual Aid (2,000 yen/month) + term medical insurance (1,000 yen/month) is enough. If you're single, you basically don't even need life insurance.

I generally do not recommend "savings-type insurance," "educational insurance," or "foreign currency-denominated insurance" because you will definitely get higher returns by investing yourself via NISA.

④ "Inventory" your subscriptions (-3,000 to -8,000 yen/month)

Many people haven't looked at their smartphone's "subscription management" screen in 3 months.

• Netflix, Amazon Prime, Disney+, DAZN

• Spotify, Apple Music, YouTube Premium

• Adobe, Canva Pro, Notion Plus

• ChatGPT Plus, gym apps...

The employees around me are, on average, paying 8,000 yen a month without realizing it. If you make it a rule to "cancel immediately if you haven't used it in 3 months," you will save 50,000 to 100,000 yen a year.

5. Consolidate credit cards into one "no annual fee, high rewards" card (-1,000 yen/month + increased rewards)

Having multiple cards increases annual fees and disperses your points. I recommend consolidating to something like a "Rakuten Card" or "Sumitomo Mitsui Card (NL)".

The Sumitomo Mitsui Card (NL) is the best value card because if you spend 1 million yen a year, you get no annual fee for life + 10,000 points every year from the following year onwards.

6. Refinance your mortgage or negotiate a rent reduction when renewing your lease (-5,000 to 20,000 yen/month)

This is a big one.

[Homeowners] If you took out a mortgage more than 5 years ago, just refinancing to lower your interest rate by 0.5% can sometimes reduce your total repayment amount by over 2 million yen. Variable rate online banks (au Jibun Bank, SBI Sumishin Net Bank, etc.) are the standard choice.

[Renters] At the time of renewal, if you "research the rent of other properties and send one email to the real estate agent," it is common to see your rent drop by 3,000 to 10,000 yen per month. A friend of mine got his rent lowered by 8,000 yen per month. That's 96,000 yen a year.

7. Use Furusato Nozei (hometown tax) to make your "daily necessities and food expenses" effectively zero (-5,000 to 10,000 yen/month equivalent)

This is something people who aren't doing it should start tomorrow.

Furusato Nozei is a system where you pay your resident tax in advance "in exchange for gifts." If you don't do it, you are just losing out on the best system available.

Every year, I get:

• Rice: 60kg per year

• Tissues/Toilet paper: 1 year supply

• Frozen meat/fish: Delivered regularly

• Daily necessities like detergent/shampoo: Bought in bulk

I get all of these through Furusato Nozei. This saves me 8,000 yen a month on food and daily necessities.

I will explain the details in a separate article, so please be sure to read that as well.

How much will you save if you do it all?

Item Monthly Savings Annual Savings 1. Budget SIM 5,000 yen 60,000 yen 2. Electric Company 1,500 yen 18,000 yen 3. Insurance Review 15,000 yen 180,000 yen 4. Subscription Cleanup 5,000 yen 60,000 yen 5. Card Consolidation 1,000 yen + rewards 12,000 yen + 6. Housing Cost Review 8,000 yen 96,000 yen 7. Furusato Nozei 8,000 yen equivalent 96,000 yen equivalent Total approx. 43,500 yen approx. 520,000 yen

Don't forget about "priorities"

If you try to do all 7 at once, you will burn out.

My recommended order is:

1. Organize subscriptions (takes 5 minutes, immediate effect)

2. Low-cost SIM (60,000 yen saved per year for 30 minutes of work)

3. Review insurance (biggest impact, but takes 1-2 days)

4. Hometown tax donation (Furusato Nozei) (must do by the end of the year)

5. Electricity, credit cards, and housing costs at their respective renewal times

The secret to keeping it up is to "do one, feel the effect, then move to the next."

Summary: Reviewing fixed costs is "annual maintenance"

To keep your household budget from becoming a "sieve," every December, make it a habit to do a

• insurance

• communication costs

• subscriptions

• electricity/gas

• housing costs

"30-minute inventory check".

It's a task that will increase your take-home pay for the following year by 300,000 to 500,000 yen in just 30 minutes. If you calculate the hourly rate, it pays better than being a CEO lol

Finally: Your "next step"

▶︎ X (formerly Twitter):@ryosuke_kitamura

▶︎ Note article to read next:

#Saving #TaxSaving #FixedCostReduction #20sEmployee #BudgetSIM #InsuranceReview #FurusatoNozei #IncreaseTakeHomePay