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Try a Kakeibo Budget To Be More Mindful With Your Money

5 minute read

Devon Taylor

By Devon Taylor

There are plenty of budgeting methods out there. There’s the envelope method. The 50/30/20 philosophy. There are apps and software programs that help you keep track of it all. No matter which budgeting process works for you, most experts agree that making (and sticking to) a firm budget is paramount to financial success. That being said, here’s one more budgeting technique that will help you be more mindful of your money.

A Japanese budgeting method called Kakeibo is gaining popularity in North America. Pronounced “kah-kah-boh,” you can consider this more of an overall financial mindset. It’s much more than a simple ledger of income and expenses. When utilized properly, Kakeibo will help you be more cognizant with you money.

Where Kakeibo Comes From

Kakeibo has been around for about 120 years already. However, it was Japanese journalist Hani Motoko who truly helped popularize the idea in the 1920s. At the time, Kakeibo was considered a helping hand to traditional housewives who were charged with keeping track of family’s finances. In fact, the literal English translation of Kakeibo is “household financial ledger.” Yeah, we know it’s not a very exciting phrase in English. However, the concept itself works great.

How Kakeibo Works

As we already mentioned, Kakeibo is more than just balancing some numbers. It’s a more careful reflection of how you earn and spend your money. You’ll still track income and expenses like you would with other budgeting systems. However, the key factor with Kakeibo is writing everything down. No, not in an app or a spreadsheet. Get a small notebook and turn it into your Kakeibo journal.

Physically writing down your financial habits — with pen and paper — makes them “more real.” It should help you discover potential areas of saving that you wouldn’t notice while staring at a bunch of bank statements and rows of numbers. You can buy special Kakeibo-specific notebooks if you want. However, any notebook will do the trick.

What To Journal

So you know what Kakeibo is about and have your journal ready to go. Now what? The Kakeibo budgeting system tells you to ask (and answer) the following questions at the start of every month:

  • How much money do you have available? Include all income sources.
  • How much money would you like to save?
  • How much money are you spending? Don’t miss anything!
  • How can you improve?

Take care of the easy numbers first. Hopefully you have a steady income that doesn’t fluctuate too wildly. Certain payments are probably the same every month, like your rent or car payment. Hopefully, once you’ve written everything down, you have a surplus. It doesn’t matter whether it’s big or small. That’s your “available” money for the month. The next step will show you how to use that cash.

Breaking It Down Into Categories

Kakeibo asks you to break down your expenses into four major categories: Needs, Wants, Culture, and Unexpected Expenses. Place every one of your expenses into one of these four categories. Here are some examples of each one.

  • Needs: Clothing, groceries, healthcare/medicine expenses, electricity and heat.
  • Wants: Dining out, gym memberships, cable TV, subscription services.
  • Culture: Books, concerts, films, or theater tickets.
  • Unexpected Expenses: Car repairs, pet emergencies, or surprise home expenses (like a broken window or a dead appliance, for example)

The next step might be the most important, so read carefully. As you log each expense into your journal, add a couple of contextual details. Write down why you made the purchase and how it made you feel. Was it an absolute need? A splurge of online shopping? A date night?

Then add how the purchase made you feel. Did you end up with buyer’s remorse? Or the satisfying feeling of a well-researched purchase? Did spending that money make you feel happy? Or stressed? Maybe you feel accomplished if it was something you’ve been slowly saving money for.

You’re Only Human

The key factor in Kakeibo is that is acknowledges that budgets can’t always just be balances and numbers. You are a human being, with all the feelings and emotions that come along with the human condition. For many of us, spending money is a stressful thing. Kakeibo embraces those feelings. Then, it encourages you to try to cut down on any spending that doesn’t make you feel good. You’ll never be able to completely eliminate that, since literally no one enjoys paying bills. However, your Kakeibo journal will hopefully help you feel more happy and confident that you’re spending your money wisely.

Extra Benefits

Your Kakeibo journal may lead you to other realizations about your life. For example, maybe you notice a pattern of spending on fast food that makes you feel guilty and rushed. It might be a sign that you need to manage your time better, in order to make meals at home. Or embrace some meal prep plans on your days off, so that you’re not so hurried during the week.

You might notice you’re spending extra money to impress your social group. Sure, they can afford to spend their weekends at theme parks or cottage rentals. Maybe you can’t, and your journal will inform you that trying to keep up with their spending only leads to feelings of envy and regret.

How to Review Your Performance

To borrow from another popular self-help guru, the goal is Kakeibo is that spending your money should “spark joy” in your life. Even when you’re paying the rent or electric bill, you can at least be satisfied that you’ve successfully provided you and your family a safe and secure place to live for another month. On the other hand, that gratuitous extra spending that leads to extra stress can be whittled down. Or eliminated altogether.

At the end of every month, look back at the four questions you started with. Did you save the money you planned to save? Did you suffer setbacks? Where there areas you could have done better in? What spending made you happy? What spending made you angry? Write down short answers to all those questions in your journal too.

The Last Word

Putting your finances — and the feelings related to them — down on paper every month is a terrific exercise. It gives you a chance to analyze your personal financial goals and then check back on whether you reached them. After a couple months, you’ll have a much better idea of where you spend your money. It might make you re-think that impulse buy from your favorite store or giving in to that targeted ad on Instagram that just won’t go away.

In short, keeping a Kakeibo journal teaches you to be more mindful about your money. You already know how hard you have to work for it, so it only makes sense to focus on spending it in ways that enrich your life in one way or another. Whether it’s a need or a want (or just something that “sparks joy” — thanks Marie Kondo!), keeping a Kakeibo budget will help you stay on track financially.

Woman Recording Cash Spent on NotepadShutterstock
Devon Taylor

Managing Editor

Devon is an experienced writer and a father of three young children. He's simultaneously trying to build college funds and plan for an eventual retirement. He's been in online publishing since 2013 and has a degree from the University of Guelph. In his free time, he loves fanatically following the Blue Jays and Toronto FC, camping with his family, and playing video games.


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