I've received a lot of questions as to how I got myself to learn Japanese up till this stage without attending any classes or spending a lot of money on books. Though firstly, I have a great advantage as I learnt Mandarin back in primary and secondary school (Though I only took Mandarin till Form 4 :P) Knowing Mandarin gives you a great advantage in a sense that it helps you learn Kanji way faster!
To learn Japanese the fun way, pretty sure most who reads my blog are anime/manga/games enthusiast (or also known as fans of the Japanese sub-culture), I'm 100% sure most of you started picking up words and phrases from anime. I'm no different, my first Japanese word I learnt back when I was in primary school was "Harahetta" (はらへった) which means "hungry", and the very anime I picked it up from was Gensomaiden Saiyuki, where Goku's favourite word is Harahetta!! Few years along the road more vocabulary entered into my brain, though I was still unable to form phrases, let alone sentences. (Okaylah, maybe the simplest Watashi no namae wa ___)
So, as we all enjoy watching anime, and you probably watch with the subtitles, try and listen carefully to their pronunciation while reading the subtitles, and also, try and repeat the words in your mind. It helps in memorizing :D Like, after you watch an episode of Free!, and then you first heard of the word swimming in japanese, "Oyogu", keep repeating it in your mind after you watch the episode. I had this continue for a couple of years and it really helped expand my vocab further.
It was always one of my greatest dream, to watch animes without subtitles (I was young, don't criticize me, h-hmph! >.>) I got myself 1 Japanese vocabulary book when I was in secondary school. I didn't bother buying any dictionaries as I believe it'd bore the hell out of me definitely (and that includes grammar books). I proceeded to read the book daily, even if I was busy, I'd at least read 1 page before I go to sleep. I even went to the lengths of bringing the book to school and read at times when I'm free.
This is my personal opinion on choosing a Japanese book to learn from, so it is entirely up to you whether you want to follow my advice or not. My criteria for choosing a good Japanese book, it must contain 4 main things, the Kanji writing, Hiragana/Katakana, romaji reading and English translation (Or any other languages that is your mother tongue). So while you read, you'd read all four. Some books only provide romaji reading and English translation, which is a no-no for me.
Right, so you found a book of your choice to help you expand your vocab, and help you to sort-of identify hiragana/katana (and perhaps kanji). What's lacking is to practice writing. For starters you should memorize Hiragana. I had a note book specially to practice writing each syllable everyday. After memorizing Hiragana, next up is Katakana! Katakana is a simpler form of writing compared to Hiragana, and it is slightly similar to Hiragana in some ways, so it should be easier to memorize. Again, keep writing to get it into your head, reading won't help you much to memorize all of it!
At this point, I was running out of ways to learn Japanese further (memorized Hiragana and Katakana liao D: and also I want to be able to actually read sentences instead of just words and phrases). At this point, most people would consider taking classes, but as my parents won't allow me to, I discovered an alternative way to do it.
Reading Twitter tweets and blogs of celebrities that you like. I am not kidding, I started this after completing my SPM, I did spend a whole 2 hours reading through my Japanese-filled Twitter timeline, tracking back all the Japanese tweets till the last tweet I read the day before (I believe I followed about 80~90 people, mostly Nico Nico Douga singers/producers/dancers). If I see any kanjis that I do not know, I'd rush to the help of my trusted Japanese online dictionary, Nihongodict and Denshi Jisho. Nihongodict is for fast quick search, whereas Denshi Jisho is good to find sentences and also search up on Kanji. I have been using these two up till today. Still good and reliable.
2 years after that, I attempted at translating short paragraphs and short blog posts and also song lyrics (you can still read my old posts in this blog, I once translated Shounen-T's posts :P ). Don't be afraid to do it, it's a good activity to help you improve Japanese, even if you think you can't do it, I believe you can >D (fuiyo)
Also, another great tip for music lovers, read the lyrics, in kanji! Once you've com across the same kanji a number of times, your brain will automatically register the reading for it. And since lyrics are something you don't forget very easily, it's a great material to learn Japanese from :) Anime OPs and EDs and Vocaloid was the thing for me XD
And as of last year, I challenged myself to read light novels and also tryout Japanese visual novels, to test my kanji level! And surprisingly, I was able to complete visual novel games, and read light novels (of course, still with the help of dictionaries) Up till this day, I am still learning of course, there's still much to learn about kanji and grammar @.@.
I only started to seriously pursue Japanese when I bought my Japanese book, so it approximately took me about 4~5 years to get to where I am now. And what's best, the only money I spent on learning Japanese, is that one vocab book LOL (which was only RM20 if memory serves me right) But nonetheless, it still takes a lot of effort and time, and of course motivation, to keep pushing yourself to learn. At one point I got tired of reading Japanese sentences, I literally had to force myself to do it (though it wasn't really that bad actually). I had to force myself, and in my mind I kept telling myself "I must read Shounen-T's blog post today, I must read it!" Lol, in a way, there are hard times when you feel like giving up.
Added the fact that I have friends around me who are taking Japanese classes provided by their university, or going for language classes, I did feel the pressure (no hard feelings really, I'm just jelly of you guys D:) End of the day, though I took a longer time to come to this point, I believe I achieved something, and that sense of achievement is overwhelming :3
In short, just have confidence, and keep motivating yourself. Perhaps you can find a friend to work on Japanese together with you, at least you won't feel alone, and also competition is good to help motivate you to learn.