How to Save Money Like the Japanese: Kakebo

The Japanese are well known for their politeness and kindness but also for their discipline. This applies to how they manage their money as well and there’s a lot to learn from them about it.

In 1904 they created a method for budgeting called “kakebo” – basically the Japanese art of saving money.

What is Kakebo?

Kakebo is a philosophy and a technique about how to spend and save mindfully and deliberately. It was invented by Hani Motoko and it literally means “book of accounts for household economy”.

With kakebo you write down your finances to get them in order which the Japanese believe enhances your wellbeing as well because mindfully saving, spending and tracking your money brings balance and calm in all other areas of your life.

A kakebo is basically a financial journal that helps you manage the present and also focus on the future.

How Kakebo works?

Kakebo is very simple to practice and it only requires a notebook and a pen – no technology. The reason for this is because the act of writing things down instead of quickly dotting them on your phone, tablet or laptop, is much more reflective and even meditative. It makes you more aware of what you’re writing. The whole point of kakebo is to encourage a thoughtful process and doing it digitally does not help meet the purpose.

So step number one is to get a notebook or grab our kakebo planner and just print it out.

At the beginning of the month
  • Write down your income and all regular expenses.
  • Calculate the difference and allocate what is left to spending and saving. Be especially mindful of your saving goal.
  • Record your spending for every day of the week – cash or card.
  • Use the four kakebo categories to organise your spending: needs (household, groceries, transport, student loans etc.), wants (shopping, takeout, hobbies, entertainment etc.), culture (museums, art, concerts etc.) and unexpected/extra (medical bills, repairs, gifts etc.).
At the end of the month
  • Calculate your total spending versus what your plan was at the beginning of the month and see whether you hit your saving target.
  • Spend time reflecting on what went well, what you achieved and what you can do better next month.
  • Review the spending categories to identify where you might be overspending.
At the end of the year
  • Calculate your total income, spending (per category) and saving.
  • Reflect on the above and what went well or didn’t but also think about the process of going through this exercise and how you can make it more meaningful and relevant to your situation, focusing on your bigger life goals.

Why do Kakebo?

Kakebo gives you more control over your finances and makes you feel empowered, especially if you don’t have the discipline to track and plan what you’re doing with your money.

Kakebo allows you to establish money management as a habit that can be enjoyable and thought-provoking because you have everything in front of you on paper. It pushes you to think why you’re making each and every purchase and slow down in our world of one-click buying.

It ultimately teaches you to be truly mindful of where you’re spending your money and if your spending is aligned with your values and what matters to you in life.

Have you ever heard of Kakebo? Would you try it?

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