The Japanese art of kakeibo can teach you how to be more mindful with your money. If your finances are in need of order or require a helping hand, kakeibo can help get them back on track.
What is kakeibo?
Pronounced 'kah-keh-boh', it translates “household financial ledger”. This concept was dreamed up in 1904 by Hani Motoko, who is considered Japan's first female journalist.
Kakeibo involves keeping a journal of all your incomings and outgoings so that you can see where you’re spending unnecessary money. It takes a more novel approach to saving money than other budgeting methods to help you think about why you’re making each purchase.
The process of Kakeibo involves three main steps – at each stage, you’re asked to think about your approach to money:
- Planning – when you plan your budget you’ll need to anticipate how you spend your money, allotting a certain amount to categories, such as needs, wants and emergencies.
- Spending – as you spend your money, you’ll be prompted to think twice about every purchase you’ve made and add it to a particular category. You’ll see certain categories growing faster or slower than others which might make you reconsider your spending habits during the month.
- Reflecting – when the time comes to review your finances, you’ll take a view of how you’ve spent money during the month. You’ll note how much you’ve spent in each category. You’ll need to ask yourself to consider how your spending shows which areas of your life you value most.
Why it works
- Awareness: Writing expenses by hand slows you down, making you more aware of your spending habits.
- Intentionality: You start asking, “Do I really need this?” before buying.
- Reflection: Monthly reviews turn spending from a guilt trip into a learning experience.
Who Should Try Kakeibo?
- Anyone who struggles with overspending
- People who want to build a stronger savings habit
- Those who find joy in journaling or self-reflection
- Anyone tired of mindless scrolling through bank statements
Each month, you record in a notebook:
- Your income
- Your savings goal for the month
- Your actual spending (broken into needs, wants, culture, and unexpected)
- And then you reflect: What did I do well? What could I improve?
This practice of handwriting your income, expenses and savings has been popular in Japan since 1904.
Now you can look for small ways to improve your money habits. One really important thing to bear in mind during this step is that you aren’t looking for points to criticize, you’re simply making observations and finding small tweaks. Add these improvements either to your money goal, or make adjustments to your budget and see how it goes next month.
For example, you might notice that your spending in one category is higher than you anticipated. Think about why you spent more in this area than you thought you would. Does this mean that the category is a priority for you, and is an area you might want to allocate more funds to? Or maybe you’ll reflect that some of the spending wasn’t necessary and will aim to spend more carefully next month.
Hopefully, you will also have been able to save a small amount of money, but if you weren’t able to, then it’s worth considering why you didn’t manage it. Think about the way you spent money this month, and ask yourself whether you prioritized your savings, or something else. There’s no judgement to this question, but it might prompt you to reassess your goals, and your budget.
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