Kakeibo: How This Japanese Budgeting System is the Perfect Way to Practice Financial Self-care


In today’s fast-paced world, self-care has become more of a necessity than a luxury. Behind the bubble baths and binge watching, is a crucial need to relieve stress and invite calm into our lives. The magic of self-care is that it involves shifting your perspective, tackling your stressors head-on, and finding actionable ways to live a healthier, slower life.

The state of your finances plays a fundamental role in your general health and well-being— Studies attribute a myriad of psychological difficulties, including greater psychological distress and increased difficulties with family members, friends, and in the workplace to financial stress. Reframing the way you approach your finances– financial literacy and mindful spending– encompass financial self-care.

The Japanese budgeting system, Kakeibo, is a great way to practice financial self-care.


Kakeibo: The Japanese Art of Saving Money

The word Kakeibo literally translates to household finance ledger. In his book, Fumiko Chiba reveals that Kakeibo traces its roots to 1904, and was originally popularized by Hani Motoko, Japan’s first female journalist.

It is a method of tracking down expenses and spending that was traditionally used by Japanese housewives to manage a household budget. Kakeibo is therefore a budget ledger in which you manually jot down your monthly expenses, and keep track of your spending, while ensuring that you save a certain amount of money every month.


How it Works: Financial Self-care

Goal setting

At the start of each month, you have to write down and deduct your fixed expenditure from your income to determine how much money you have available. Like many things, the success of managing a Kakeibo highly depends on establishing a goal (saving goal in this context.) Having in mind (and writing) the exact things that you are saving for, motivates and reminds you to act accordingly in order to achieve your specific goal(s).

To be effective in your saving journey, you will need to determine how much you can afford to save, and aim to only spend money on the things that are important to you. The process involves asking yourself and answering (in writing) four basic questions at the end of each month:

  • How much money do you have to spend?
  • How much would you like to save?
  • How much are you spending?
  • How can you improve?

Set a savings target that works for you and deduct this from your available money. Your best chance is to put this money aside and away immediately. Forget about it if possible. After this rewarding step, you will be able to ascertain how much money you have been left with to spend.

Kakeibo Tip: Treat the money you would like to save as a fixed expenditure.

You will also need to include a Promises section in your journal, where you write down the things that you promise to do differently. You are making a declaration to yourself by promising to make better financial decisions, stick to your budget, and avoid toxic habits (ones that hinder you from achieving your goals.)


Planning: Track your income and expenses

This is where the bulk of the actual writing, calculating and work takes place. Create a table to account for your spending in 4 different categories, namely:

Survival (Needs) Necessities like food and fixed expenses like rent, electricity and gas.

Optional (Wants) Things you enjoy/choose but do not necessarily need; a new pair of boots, takeout etc.

Culture – Costs incurred by entertainment and cultural activities, such as books, Subscriptions like Netflix and cable TV.

Extra (Unexpected) As the name suggests, these are unanticipated expenses, like repairs, replacements etc.

Under each, list down specific items that fall under the category. The work comes in where you have to write down literally everything that you spend money on, for the entire month.

Chances are that you will not get a ledger that suits your every need or one that has slots for everything you intend to record in your Kakeibo. You could always use a normal notebook, or make your work easier, cheaper, and more personalized by designing your ledger in a computer spreadsheet of your choice, including everything you need.

However, remember that the idea is to write, not type. So, print the sheets out, file them if you want, and there you have it— your very own customized Kakeibo.

Having in mind (and writing) the exact things that you are saving for, motivates and reminds you to act accordingly in order to achieve your specific goal(s).

You can keep the money you intend to spend on each category in separate envelopes. At the end of the month, you will use this to track down how well (or not) you have managed to stick to your budget.


The need to put it down on paper: Mindfulness

With the fine art of Kakeibo, a traditional approach is stressed simply because you connect with your words best when you write them down manually. You are also more likely to achieve your goals (including your financial goals) when you record them manually, as this gives you a tangible sense of how you are managing your finances.

For most people, writing by hand takes a little more time than typing. Contrary to what you might think, this is actually an advantage. The extra time you spend writing something makes you interact with the idea longer, thus cementing it in your brain and making you more likely to chase it actively. A study published in Psychological Science found that students who took notes on laptops performed worse on conceptual questions than students who took notes longhand.

The original Kakeibo book’s slogan stresses the need to put it down on paper— “Memory can be fuzzy, but the books are accurate.”

This system of budgeting shows you every single thing that you spend money on, and with time you will end up cutting back on the things that are not necessary and ones that you are spending too much on. The goal is to have some money left in each envelope and ensure that you spend within your budget. Keeping a Kakeibo is about being mindful with your money. The process requires you to employ conscious spending habits, and at the end of each month reflect on your ledger to identify your shortcomings, and be in a position to correct yourself and make even better financial decisions in future. Check in with your Kakeibo throughout the month, ideally on a daily basis.

Experts claim that by keeping a Kakeibo you will be able to save up to 35% of your income. How accurate this is— give it a try and find out.



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