How to Bank Mad Cash in Japan

My freshman year of college, four guys on the floor above me saved their spare change the entire year and ended up with $400. They spent it all on booze for a final party, and because we were freshman and not yet legal, they sent the booze home along different routes; prudent since one of them ran into the Freshman Dean and had his portion confiscated.

Saving loose change might be a nice way to save up a little extra cash in the US, but in Japan, it can be a way to raise some serious fundage:


How to Bank Mad Cash in Japan from Daniel Morales on Vimeo.

I was pretty surprised by the relative value of change across the world. US change is practically worthless compared to Japanese coins. It’s 10 times less valuable! In Japan, that $400 my friends saved would have been closer to $4000!

Studies have shown that consumers are less likely to spend bills of larger denomination, and I think this is probably true of the coins in Japan – personally, I feel like I’m more likely to use 100 yen coins than 500 yen coins given a choice.

Because coins in Japan are so valuable (could you ever pay for your phone bill in quarters?), I think this brings about another corollary – people probably undervalue change compared to bills. For any given purchase, I believe people would be more willing to make the purchase with coins and less willing to make the purchase with bills.

A quick example. You’re waiting for a train and see a vending machine. Hmm, maybe I’ll get a water, you think. You fumble around in your pockets and produce 80 yen, not enough for a drink. Now you have to make the decision to break a bill. The above study shows that you’re increasingly less likely to break that bill as the denomination increases. If you’d had the coinage for it, you aren’t forced to make these psychological decisions, and it’s easier just to spend the cash. For whatever reason coins just feel less valuable.

But this comes back to bite you in Japan. We’re more willing to use these coins without realizing that they’re actually worth quite a bit of money, especially that big, beautiful 500 yen coin that’s worth $5.

Here’s some quick math. Say you save around 4-5 coins a day. That’s somewhere around 400 yen/day x 100 days = 40,000 yen = roughly $400. Double that and you can put aside $800 in just over half a year.

Let’s take this even further. Say you put away one 500-yen coin every day. That’s 500 yen/day x 300 days = 150,000 yen or $1500 in less than a full year! They actually make special piggy banks for this exact purpose – parents can teach their kids how to save money and make it fun.

For this project I went on a really strict change diet. I tried to use as little change as possible, going out of my way to use bills and emptying my pockets whenever I got home. The results are clear. From August of last year to April of this year, I saved around 120,000 yen in 500 and 100 yen coins alone. I still haven’t banked the smaller change, but I think it will add another 10-20,000 yen.

For your own change diet, you can vary how strict you are with yourself to achieve the results you want. Manage your bank account as you normally would, and make decisions based on that. Forget about the change for now and just bag it up. It’s easy enough to switch back to bills – my bank lets me deposit it straight into my account. It only took me about 15 minutes at lunch, but my backpack was ridiculously heavy on the morning commute.

7 thoughts on “How to Bank Mad Cash in Japan

  1. You can buy 100 yen or 500 yen piggy banks at the 100 yen store. I have a 500 yen one, and when it’s full, it will have 300,000. I’ve had a similar strategy as you for a year and a half, but only with the 500 yen coins. I haven’t spent one… ever. Even if something is 499 yen, I break a 1000 yen note and save the coin. It looks about 4/5 of the way full. Weighs a ton though-

  2. Intellectually I can see how this is a great idea. Emotionally, though, it fills me with revulsion. This is because I am one of those people who always gives the cashier a strategically irregular amount of money designed to minimize the total number of coins in my wallet after the purchase. It’s bad enough on those rare occasions when I make a mistake at the register and later realize that I’ve been walking around with two five-yen coins all day — there’s no way I could ever intentionally pollute myself.

    (Actually, there are rare exceptions. When I had to use a laundromat, I would spend a couple of days in mode B, where my goal in each transaction would be to maximize the 100-yen coins in my wallet while minimizing everything else. But I didn’t like it one bit.)

  3. Brian: Damn, that’s a ton of 500 yen coins. Take some pictures of that stash when you finish saving.

    Matt: Haha, I used to be like that. It’s a pretty fun game to play, but I also found it pretty liberating for to say fuck it and break those bills, carry around massive pockets of change. There were some days I remember dumping like 3 or 4 500 yen coins into my bag. Although I did have to temporarily retire a set of jeans because the pockets were too small (bought them in China).

  4. I saved up all my change for the past year or so, putting what was in my pocket at the end of the day into a jar. I try to avoid using it during the day, but for tea and such sometimes. I cashed in last week and got 120,000.

  5. I have a couple of mugs filled with change that I dump my pockets into every once in awhile.

    Though one month I decided to change (durr) this and spend no change AT ALL. Every month I take a set amount of money to live off of, and that particular month I ran out of funds far earlier than I should have. The culprit was the massive amount of coins I had built up.

    So that’s my warning: BE CAREFUL, CHANGE CAN BE DANGEROUS

  6. Before I got married I used to do this to make larger purchases. Now I’m married and don’t have any money of my own.

  7. Pingback: How to Japonese» Blog Archive » How to Bank Mad Cash in Japan – Director’s Commentary