What is Kakeibo?
Here comes the kakeibo, a “budgeting notebook” and the newest lifestyle fad in Japan. Hani Motoko, the first female writer in Japan, created the kakeibo in 1904 with the intention of assisting busy women in managing their finances. Now that Fumiko Chiba’s first English-language kakeibo has been published, it’s time to put it to use.
The idea is that you sit down with your kakeibo at the beginning of each month and plan what you’re going to spend, what you’re going to save, and what you need to do to attain your objectives by reflecting on the following four questions:
- How much money do you have available?
- How much would you like to save?
- How much are you spending?
- How can you improve?
What do you need to know about the Kakeibo method?
1. Stop focusing on saving and start focusing on spending
There is no issue, you say. The problem is not spending. If so, you’ll enjoy this.
According to Chiba, we need to change the way we think about budgeting since we need to “spend well” in order to “save well” and vice versa. Chiba informs us, “We all work extremely hard to live and to enjoy things. It’s critical to keep this in mind when saving.
In other words, saving becomes a hassle and we’re more inclined to give up if it’s all about what we can’t do or have. It becomes a lot more appealing idea if it becomes about carefully planning our budgets so we can do and have what we truly desire.
2. Write your expenses down.
The main focus of keeping a kakeibo is keeping track of your expenses, however entering data into a spreadsheet is insufficient. Writing down ideas is an essential component of the practice.
According to Chiba, utilizing a kakeibo transforms into a form of mindfulness practice in this way. Today’s world moves so swiftly that everything may be purchased and paid for in a flash. A kakeibo encourages us to take our time and thoughtfully evaluate our purchases.
You must thus determine how much money you truly have at the beginning of the month and record it in writing. Add up everything you have, including your income, any side jobs you may have, and the £20 your mother gave you for your birthday.
Then subtract your “fixed expenditure”—the things you must pay, such rent and bills—from your total. Simple enough.
3. Being truthful about your “musts” and “wants”
The goal of using a kakeibo is to organize your funds. If you completed the previous stage, you should now be aware of how much money is coming in and what needs to be spent. It is now time to determine how you are currently spending the remaining funds and how you may improve upon it.
Your expenditure is broken down into categories and very specifically tracked with the kakeibo. Takeaways, for instance, may be one of the categories. The items on this list might range from a full-fledged Deliveroo night to a short takeaway coffee that you forgot about as soon as you drank it. Be strict.
The four major budget categories that you’ll use to track your spending are as follows:
- Needs: This would include groceries, clothing and medicine.
- Wants: Factor in expenses like gym memberships, dining out and spa services.
- Culture: Buying books and attending festivals would fall under this category.
- Unexpected or extra expenses: This could be things like car repairs or an emergency vet visit.
Knowing where your money is going can help you distinguish between what you absolutely must have and what you can do without. Yes, it is a “essential” that we all eat. But let’s face it, the Itsu habit is a major old craving. And yes, clothing is a “essential,” but does that mean you should spend all of your money at Topshop?
You can find areas where you might be able to make savings by breaking down your expenditure into manageable bits.
4. Cash is better than cards.
Nowadays, we’re more likely to carry a stack of cards in our handbag than actual cash (we hope). But this could be where we’re making a mistake, Chiba tells Refinery29. Using a credit or debit card makes us less responsible for our spending, but physically giving over cash makes us more inclined to think again.
To assist you stay inside your budget, Chiba even advises taking cash out of the bank and splitting it up into designated packets.
5. Review your achievements at the end of the month.
It won’t do to take a quick look at your mobile banking app (followed by a cold sweat when you see single numbers). Your kakeibo requires you to examine your spending for the previous four weeks at the conclusion of each month, identifying your strengths and shortcomings and establishing objectives for the next month.
According to Chiba, tracking our expenditure with applications just reveals where we are making mistakes. But you can see things from a wider angle if you use a kakeibo.