A seven-day solo trip to Japan was all I needed to be convinced of one thing: the Japanese know exactly what they are doing. Ever since my trip there in 2018, I’ve been partly obsessed with the way of life of the Japanese and I’ve been applying some of their principles to my personal life.
We all know about Marie Kondo and the art of tidying up but what about Kakeibo? Kakeibo is a budgeting system that was created by a Japanese woman and has become very popular ever since then. I tried it out sometime last year and I’d like to say that so far, it has worked really well for me and has brought my savings up by 40%.
What’s the Kakeibo?
Kakeibo simply means household financial ledger. It was first invented by a Japanese woman called Hani Motoko. I love that Kakeibo was invented by a woman and I hear it gave women freedom to make financial decisions in Japan. The centre stage of this budgeting method is journaling. Journaling your way into better finances and reaching your financial goals.
Why I tried the Kakeibo
Firstly, I tried it as a social experiment. I first heard about it when I traveled to Japan and wondered if it really worked. Secondly and most importantly, I wanted to save more money in a simple yet effective way. I was tired of boring spreadsheets and all the numerous apps I had. I just wanted a simple way to get the job done.
How the Kakeibo works
You may be wondering – what’s so special about the Kakeibo anyway? Isn’t it like any other budgeting method? Well, I thought so too until I tried it. The Kakeibo works based on four main questions:
- How much money do you want to save?
- How much money do you have available?
- How much money are you spending?
- How can you improve?
What sets Kakeibo apart in my eyes is the reflection piece of it. The thoughtfulness required to journal your habits every month and truly understand where your money is going to, really helps. I find it to be a better way to understand your money vs. using just a spreadsheet. I didn’t ditch my spreadsheets or budgeting apps but I embraced journaling my money and it worked for me.
The power of the Kakeibo lies in its journaling process.jessica ufuoma
What I love about Kakeibo
The simplicity of it
You see, budgeting can be a pain. You’re required to list out all your expenses and income and focus on saving money. Saving money is great but I love how Kakeibo focuses on spending money. It’s a mindset shift. If you know how much money you are going to spend every month, then you can work out what you want to save. And hey, thinking about spending money is far more fun than thinking about saving money. Same goal, different approaches.
No technology, just plain old pen and paper
I also love the fact that there are no spreadsheets or apps involved. There’s something more intentional about putting pen to paper and recording things – in this case, recording your expenses and income. It’s a more meditative way to go about things and it helps you be more aware of your spending habits.
I love that Kakeibo focuses on mindful spending and makes budgeting more of a meditative process.jessica ufuoma
The Kakeibo is both practical and actionable
1.) You’ll need these two things: 1.) A big journal you can keep at home and 2.) A small journal you can carry along with you. You can also buy the Kakeibo journal – even better!
2.) Every month in your big journal, you write your planned income and expenses and you also write down your savings. You carry your small journal everywhere you go and use it to record your expenses in real time. Grocery shopping, Uber fares, etc.
3.) You divide your expenses into four major parts: a.) Expenses on living – food, living, rent, etc. b.) Culture and education – Courses, Training, museum tickets, etc c.) Entertainment d.) Others
4.) You try to stay on budget within the month and at the end of the month, you do a review of your journal and see where the leakages are coming from. And here’s the catch! Recording your bills every month in that journal helps you see exactly where your expenses are going and it helps you improve your budgeting for the next month. It’s simple yet effective!
The Kakeibo works and is still working for me
I don’t know if the Kakeibo will work for everyone – I was a bit skeptical when I tried it at first but it has worked tremendously for me. I am no longer anxious about my spendings and my savings have gone up. Having a clear picture of my expenses and income per month helps me do better the next month and improves my relationship with money. Asking myself the four questions above and journaling the process has been simple yet revolutionary for my financial goals.