Personal Income and Expenditure in Japan

Japanese Big Buyers:
Japanese consumers have been savers as well as buyers, partly because of their habit. However, by 1980, the consumer credit industry began to flourish. Younger families are particularly prone to take on debt. Housing is the largest single item for contracted loans by consumers. In 1989, families annually borrowed an estimated US$17,000 or about 23% of their average savings. An average of US$242,600 is needed to buy houses and real estate.

Big house buyer:
Many families in the 1980s could not afford to buy houses. This led many young Japanese to spend part of their savings on trips abroad, expensive consumer items, and other luxuries. As credit card and finance agency facilities expanded, the use of credit to procure other consumer durables was spreading. By 1989, the number of credit cards issued in Japan reached virtual parity with the population.

Big Savers:
Japanese families still feel savings for retirement is critical due to the relative inadequacy of official social security and private pension plans. The average family in 1989 had US$76,500 in savings, which is less than the living expenses for retired individuals. These expenses included official pensions and retirement allowances covering the financial burden of senior citizens. The annual living expenses for retired individuals in 1989 were estimated at US$22,800. About half of the expenses are from government pensions and the rest from savings and retirement allowances. In 1970s senior citizens reached the largest savings, including deposits, insurance, and negotiable securities worth an estimated US$113,000 per person. In 1989 savings of individuals in their twenties at US$23,800 and salaried workers in their thirties at US$66,000.