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The Japanese Budget Method Explained

The Japanese budget method explained

Kakeibo is more than a budgeting method – it is a financial philosophy that focuses on mindful, conscious spending and saving. That sounds high, but Kakeibo is super easy to practice and tailor to your lifestyle.

Supporters and sponsors promise Kakeibo Users can save 35% on monthly expenses. Although I didn’t get that exact number, I was surprised at how much money it helped me save. I definitely have a better sense of my financial priorities.

And besides the cost of pen and paper KakeiboIt’s absolutely free.

What is kAkeibo?

Kakeibo takes its name from a Japanese term that means “household financial book”. Essentially a Kakeibo is a physical budget journal. Users answer some financial questions and set savings goals. They then track their expenses, organize their purchases into categories, and review the expenses at the end of each month.

The process is similar to many budgeting apps like PocketSmith. However, there are no downloads, bank account links, or regular notifications either Kakeibo – Just good old-fashioned records.

More important, Kakeibo is designed to help you reflect and understand your relationship with money Why You make every purchase. If I can spend hundreds of dollars clicking a few buttons on Amazon, I will cherish this reminder to slow down.

Where did kAkeibo I’m from?

While Kakeibo is still new in the USA, a tradition in Japan. The Japanese journalist Hani Motoko wrote about the method in a women’s magazine in 1904. The Kakeibo The accounting system appealed to its readers, Japanese housewives who are responsible for their household budgets.

When the writer Fumiko Chiba published the guideKakeibo: The Japanese Art of Saving Money “ The trend began in the west in 2018.

According to Chiba and other experts Kakeibo reflects Japanese cultural beliefs about the importance of saving money. Cash plays a ceremonial role. Children receive money as a Christmas present and are asked to keep the money for purchases that are worthwhile.

Adults don’t take easy money either. Compared to other countries Japan has a cash-rich economy;; Credit cards, which allow frequent spending with high ticket prices, are not stolen nearly as often as elsewhere.

How is kAkeibo Job?

Get a ledger

Do you remember a pen and paper? Kakeibo stays true to his roots in his early 20sthCentury Japan – it requires physical handwriting. Bullet journals work fine, but any notebook (or handwritten system you can keep an eye on) will do fine.

Calculate your monthly income and subtract the fixed costs

I cheated and used an online calculator for this step.

Set a savings goal for the month

Ideally, this target amount results from the income that you have after fixed costs such as rent or mortgage and ancillary costs.

List your expense categories

Kakeibo indicates four “pillars” or expense categories:

  • needs: the essentials like housing, groceries, car payments or student loans.
  • Want: pleasant but not essential purchases (takeaway, hobbies, entertainment).
  • Culture: Expenses for cultural activities – books, museum fees, concert tickets, TV streaming services, etc.
  • Unexpectedly: other expenses that come up, like medical bills or home repairs.

Categorize everything you buy

Record all of your purchases under the appropriate “column” and indicate the purchase amount.

For me, the sorting process was the most helpful part of Kakeibo. When you need to sort something into a category, think about it more than you would otherwise. It turned out that separating needs from wants was more difficult than I expected!

I’m a big funder in the Culture category (I love to support the arts) and it was interesting to see these results on paper as well – not just how much I spent, but which creators and organizations I supported.

Answer four reflection questions at the end of the month (or week).

From time to time – monthly or weekly – write down your answers to the following questions:

  • How much money do you have?
  • How much money do you want to save?
  • How much money do you spend
  • How can you improve?

The final question, “How can you improve?” is intentionally perpetual. You will be asked to reflect and personalize the answer. Improving isn’t just about finding ways to cut costs. It can also mean spending more on what you really enjoy (or saving more on something you look forward to) and less on purchases you don’t appreciate as much. Or you can find out how you can prevent a costly unexpected situation from occurring in the future.

The ultimate goal is to increase your savings. Original Japanese Kakeibo Books contained illustrations of a “piggy bank” that spent the month fighting a dangerous “expense wolf”. You can replicate these drawings in your own Kakeibo Ledger – or get creative and think of your own metaphor.

Repeat if necessary

The categories and questions are the same every time. I appreciated this consistency. Even if my circumstances and goals change, my budget planning doesn’t have to.

How is kAkeibo different from other budgeting systems?

i found that Kakeibo is exceptional – more than any other system I’ve tried – for taking into account the reasons for my spending.

One is kakeibo Users hand-write budget items in real time. Handwriting improves memoryAccording to some studies, it is a meditative, reflective process. Writing down the details of a purchase takes longer than sticking numbers into a computer or phone. In some ways I know better what I’m writing and why. ((Kakeibo could be customized for a screen or software program if physical handwriting is a challenge for you. The thinking process is the most important part.)

KakeiboWith the category system, you get a second look with every purchase. I couldn’t automate any part of the process – for example, I could put recurring expenses into an electronic budgeting app and then get them out of my head. Instead, I had the opportunity to think about how everything my expenses reflected my values ​​and priorities.

When I decided to buy something under the Desires or Culture column, I was more confident that I was making a wise choice, not an impulse buy.

How can kAkeibo will you help save money?

Kakeibo keeps your savings goals in mind. Similar to “Spare Change” apps like Hide and Acorns, the Kakeibo With this approach, you can gradually save money in ways that are sustainable in the long run. Setting an amount of savings that I knew I could reach was a fortification.

And Kakeibo is designed for long-term financial planning; The four questions made me think about my future goals. Like any good budgeting system, Kakeibo helps you prepare for the future without feeling deprived or panicked in the present.

Who is kAkeibo Best for?

Inconsistent budgeters

If you had Problems sticking to budgets in the past, KakeiboSimplicity and flexibility could do the trick.

Fearful or reluctant budgeters

Kakeibo is good at banishing the idea that someone is “bad with money”. With this method, you will be responsible for your expenses and gain more control and confidence.

First time savers

The “start anywhere” approach celebrates even the smallest savings goals and motivates you to save more along the way.

Budgeter for envelopes

KakeiboThe categories are similar the “envelope budgeting” method Here you plan monthly expenses in advance and distribute fixed amounts in physical or virtual envelopes. If envelope style planning works for you, you will likely like it Kakeibo.


Lots Kakeibo Users report that they actually have fun saving money. If this method sounds intriguing, it’s a good time to grab a notebook and pen (and maybe your favorite beverage) and get started!

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