Kakeibo is a Japanese word that means “accounting for the household.” The method has been used in Japan for a very long time, but it’s now gaining popularity in the United States and other regions as well. This blog post will teach you how to manage your money with kakeibo, whether you’re interested in personal finances or managing a household’s finances for a positive outcome.
This method for getting more clarity on your income and expenses was developed by Motoko Hani, a Japanese journalist, in 1904 as part of a contribution for a women’s magazine. Kakeibo, sometimes spelled kakebo, can be used for everyone, even if you live alone or have a family. Kakeibo is not just about saving money; it’s also about getting to know yourself better and making your life much more straightforward. Kakeibo is a system of accounting based on the following three principles:
- Kakehō – Shūsei or recording your income and expenses.
- Keshiki – Seiri or categorizing your monthly expenditures into major categories.
- Kekka – Kaiketsu or setting an appropriate budget for each category.
If you put all of these pillars in your personal or family finance management, you managed to build a nice foundation not only for accounting but for the first step to start saving. In business management, many say, “you can’t manage what you can’t measure,” which is also applicable to your household’s finances. Measuring your income and how you spend money is one of the most important aspects of saving money. You can do all of this in a bullet journal to track and manage your budget or grab an app. It works either way. You don’t need to buy a product first just to follow the method to save some money.
Kakeibo is great for:
- Households with children who need to learn about how household expenses work.
- Those living by themselves without roommates since the method teaches individuals how to save money and create a savings plan.
- Couples who want to learn how to manage their household budget with kakeibo as an alternative to using credit cards.
- Those living with roommates and those without a roommate since kakeibo is meant for everyone. All of this only works if you make it work for your lifestyle.
Kakeibo can help you save money in the following ways:
- Kakeibo can help you reduce your overall expenses by teaching you how to categorize them and stay within your budget.
- The method can help you stop overspending on unnecessary items each month since journaling encourages mindfulness of spending habits.
- Kakeibo can help you create a savings plan so you have money saved for emergencies or other significant expenses.
- Kakeibo can help you get out of debt.
Kakeibo spending plan benefits:
- Kakeibo teaches you how to manage expenses within each category of spending so that you can stay within your budget.
- The practice helps you to become more mindful of where your money is going and how you can save money each month.
- Kakeibo makes it easy for you to keep track of your income and expenses, both long-term and short-term.
- Kakeibo encourages you to live a simpler life by evaluating your needs and wants.
- Kakeibo is a great way to start saving money for those who have never saved before.
- Kakeibo can be used as a tool to get out of debt.
- Kakeibo can help you create a savings plan so that you have money saved for emergencies or for buying a house or car.
- Kakeibo can help you understand and manage your budget better.
- Kakeibo can be used by each and every person, no matter their age.
- Kakeibo is a great way to learn about personal finance for the first time.
So how to get started with Kakeibo?
First of all, if you’re part of a household, you should get the buy-in from your whole family you’re living with or roomies, or other people you live with, depending on your lifestyle. Kakeibo is not a one-person activity. It’s a group activity. Once everyone agrees to do the plan together, then you should choose a time each month when everyone can sit down and record their income and expenses.
Related article: Fortune City – Cute and Fun Finance Tracking Gamification App
You can use a notebook or an app on your phone like Kakebo by Kiranum, which was designed to make Kakeibo easier. If you’re looking for alternative apps, there might be other good ones as well. It’s always best to try a few as you start a new habit to see which are a good match for your family, lifestyle, and requirements.
After recording your income and expenses, you’ll have to categorize all of them into major spending categories, such as food or transportation. This allows you to create a budget for each category of spending so that you can save money within those specific areas. Kakeibo helps you become more mindful about where you’re spending your money and how you can save in each category.
There’s also a book: Kakeibo, The Japanese Art of Saving Money Paperback, by Fumiko Chiba
The final step is to create a goal for the following month. Kakeibo encourages you to have different goals for each month, such as saving $50 or reducing your food expenses by 20%. Having specific goals will help keep you accountable and on track with your financial plan. Kakeibo is not only for accounting but for the first step to start saving. This methodology is an excellent way to manage your monthly budget, and it can be tailored to fit anyone’s lifestyle.
To summarize, the steps you need to undertake are about understanding your finances, setting goals, tracking your income and expenses, and most importantly – reflecting on what happened. Kakeibo is a great way to learn how you can save money each month. Following this practice helps reduce spending and teaches people how to create better habits with their finances so that they will be able to save more money in the future. Kakeibo makes it easier for everyone, no matter what age or income level. You only need a piece of paper, and a pen to write it all down or use an app if you’re more interested in a digital experience.
If you’d like to check out how others are already doing this, check out the financial journaling layout video tutorial below. Of course, this only serves as inspiration and as an example, but maybe it will help you to get started.
YouTube: How I Set Up My Budget Planner
Photo credit: The feature image has been done by Seraph Photographer. The photo showing a man journaling his expenses was taken by Tirachard. The picture with two women managing their financial plan on a notebook was prepared by Nathaphat Nampix.