Saving money is hard — a huge chunk of monthly income goes on rent, bills, travel costs, and groceries. Sometimes the extras eat away precious pennies without you even noticing.
Enter the kakeibo, a Japanese “budgeting journal” that promises to help you keep an eye on your incomings and outgoings.
The Japanese believe that tidiness in your finances is as important as tidiness in your home (we only need look at Marie Kondo and her global decluttering movement).
Kakeibo, pronounced kah-keh-boh, was invented in 1904 by Japan’s first female journalist, Motoko Hani, according to Fumiko Chiba, author of the guide/journal Kakeibo: The Japanese Art of Saving Money (The book a year-long journal with a few pages of explanation around how and why to use it).
Chiba writes: “Although Japan is a traditional culture in many ways, the kakeibo was a liberating tool for women, giving them control over all financial decisions.”
Kakeibo a minimal journaling approach to managing your incomings and outgoings. It helps you keep an eye on hidden and unnecessary expenses you can cut to save or invest.
Kakeibo is a saving tool that helps millions of people in Japan set saving goals, spend wisely, and manage their household finances.
“Most children in Japan get their first training in personal finance at a young age from their parents. They are taught that the more money they save, the higher the quality of personal items they can buy in the future,” writes Melo at Moni Ninja.
It’s a simple art of keeping track of your finances or being financially mindful. It combines budgeting and mindfulness, a sort of zen savings tracker helping you to achieve financial wellbeing.
The idea is to keep track of how much you’re earning and how much you’re spending; the ultimate goal is to save more. By recording your goals and daily spending in a journal, you’ll be better positioned to have complete control of your outgoings and incomings.
Experts claim it could help you cut spending by up to 35 per cent.
For millions of people, a budget is not always easy to maintain, but Kakeibo promises to help you get back to the basics of personal finance to spend wisely and save for the future.
It’s a simple financial journaling method. No apps, no digital technology, no complex mathematical calculations that can put you off.
“Our world is now so fast that everything can be bought and paid for very quickly. A kakeibo helps us slow down and really consider what we buy in a calm, measured way, ” Chiba says.
By stripping the technology we are so used to and getting up close and personal with your daily money habits, you will not miss any outgoing expense, and you’ll be better positioned to make solid financial decisions.
When you use the kakeibo, Chiba says, you’ll learn that “saving money is about spending money well.”
Kakeibo shifts the focus from everything you can’t spend money on to all the things you really value that you can spend money on — think of it as budgeting from a self-care perspective. The emphasis is on the quality of personal belongings — not on quantity.
How does it work? It’s a pretty simple concept — write down your incomings and outgoings
Kakebo begins with setting a monthly budget. At the beginning of each month, think mindfully about what you need (not what you want), how much you would like to save, what you have to do to reach your goal, and spend with that target in mind.
The “kakeibo monthly cycle” depends on four questions:
- How much money do I have available? Your monthly income.
- How much would I like to save? If you struggle to save each month, don’t aim too high — as you progress, you can keep cutting where necessary to save more.
- How much am I spending? Make a list of spending categories. The kakeibo approach subdivides expenses into 4 key areas: Survival (things you can’t do without, eg. rent, bills and food), Culture (theatre, movies, Netflix) Optional (things you don’t need but choose to do eg, takeaway) and Extra (unexpected expenses such as repairs and replacements, birthdays). You can create your own key areas, for example, if fitness is more relevant to your lifestyle than culture, go ahead and customize to suit your lifestyle.
- How can I improve? What areas did you spend too much on? What will you change next month? Keep an eye on each category, review weekly and monthly to see where and identify areas you can cut to make extra savings.
The simple act of completing your kakeibo each week or month ensures that saving is a part of your everyday life, while also giving you the opportunity to reflect and improve your finances.
When you choose the Kakeibo budgeting method, “Think about your ‘musts VS wants’ (ie your optional category.) Before you spend, pause to consider whether or not you need it or want it. This is a quick way to identify areas of wasted spending to help you succeed in meeting your savings goals,” saysKath at The Life Spotters!
If you’ve struggled to create and stick to a budget, give kakeibo a try. It offers a big-picture, mindful view of your finances.
The philosophy can be easily applied using a regular bullet-style journal by following the principles above. The key is to write down everything — which aids in remembering and staying accountable to yourself.
Alternatively, pre-printed kakeibos are available to purchase and fill in. Fukimo Chiba’s ‘Kakeibo — The Japanese Art of Saving Money’ is a simple option.
Kakebo isn’t just about money — it can help you develop self-awareness, self-discipline, and promotes peace of mind.