#header{ border-bottom:2px solid #eee; }

Kakeibo: The Japanese Budgeting Method that Conquers ‘em All!

kakeibo method

Disclosure: The information we provide is precise and genuine to make your Every Buck Count. However, some of the links provided belong to our affiliate partners and we get paid for it. For more information please check out our Full Advertising Disclosure.

 “Money grows on the Tree of Persistence.”

This Japanese proverb is worth thirty-something characters, but it has a hidden deeper meaning. Since the inception of the concept of money, humans have been hunting for ways to save it and make it grow.

As of now, we have billions of ways to both save money and rack it up—some online, some offline, some legal and some not-so-legal. With the inception of razor-sharp technology that’s as good as a shuriken; people have resorted to saving money online with budgeting apps.

But just like every timeless classic getting a remake (which is never better than the original), people have started digging up old ways to save money. One such method is a hundred years old, and it’s worth the antique salt.

We are talking about the Kakeibo Method, AKA the “Household Finance Manager”. This age-old beauty is nothing less than an art. An art of managing money so easy that anyone can practice, all you need is pen and a thick (or thin) notebook.

“OK Children, Say Kakeibo!

Kakeibo (pronounced as kah-keh-boh) is a Furui gakkō (that’s what they call old-skool in Japanese) method that involves managing money on pen and paper by recording income and expenses by hand.

We all love to download budgeting apps and filling up big data in it just to”look at stats” and see where our money goes. But at most times, we forget the real purpose of budgeting—to manage our income and expenses so that we save more money.

A lady journalist named Motoko Hani wrote about the Kakeibo Method in a women’s magazine in the year 1905. Backing her findings with psychological reasons that financial stability is crucial for happiness, she believed that it had to be done.

With the Kakeibo Method, you have to record whatever you do with money—a card’s swipe at Happy Hour, monthly grocery splurge or that BOGO sale shopping spree from Walmart.

That’s just one step (and it’s not even the first one), and when you know all of them, saving money would be a lot easier. Kakeibo Method is easy to master, and we are going to learn how it works.

How it works

As it was highlighted before, the Kakeibo Method is not about punching numbers into a spreadsheet. Rather, this one’s about keeping track of your cash the old way.

Here are some things you’ll need before we get started with the Kakeibo Method:

  1. A blank Notebook/Authentic Kakeibo Personal Finance Journal
  2. Set of colored pens to spice it up!
  3. Sheer display of will

You can buy two of these, or you can find them in your room. But when it comes to willpower, well, that is something you’d have to work on. Once we’ve decided that we need to save money and an ol’ journal and few pens can get it done, we’ll get it done.

So here it is, Ladies and Gentlemen—a complete guide to follow the Kakeibo Method and save big money. Because when it comes to the battle of savings pig and expenses wolf, you gotta be on the green side!

Kakeibo Method: The 5-Step Guide

You’re all set with the goods, now all you need are numbers to make it real. Here’s the five-step guide to make Kakeibo Method your money savior:

I. Check where it comes & goes

When it comes to the Kakeibo Method, you first need a reality check. The Japanese culture rates self-introspection very highly. Note down how much you earn and how much you spend every month for the perfect reality check.

The first three numbers in your Kakeibo Journal should be:

Your Monthly Income

For a start, figure out how much money you cop every month. We’re talking about your monthly income, and it should not include money which won’t come in every month.

PRO TIP: If you pocket a capital gain (from selling your car, old jukebox, or an irregular side-gig), write it down under a different column in your journal. We’d advise you to save this money for the long run.

Monthly Recurring Expenses

Next up, you write down all recurring expenses at the other side (remember the ol’ ledger? That way). It should include everything—from your monthly rent to credit card bill, gym membership to NetFlix subscription and your food expenses.

Weekend Splurges

You put water in a vessel and you want to identify the leaks. Kakeibo Method brings those leaks to light and gives a chance to fix ‘em up. Note down all weekend splurges you made this month, as they’re the ones which can be trimmed.

Start with what you did on the weekends, including all online and offline splurges too. Then move on to shopping sprees, coffee dates and other plans with mates and family. This is where we are going to slice up.

Once you are done with it, it’s time to calculate your discretionary income. Here’s how you do it:

Discretionary Income= Monthly Income- (Recurring Expenses + Weekend Splurges)

Now that you know what your discretionary income is, it’s time to move on to the next step. And yeah, we hope you’ve been doing this in the Kakeibo Journal!

II. It’s Save-time!

Now that you have a concrete figure of discretionary income in your hands, you can start working on saving a chunk of it. The Kakeibo Method doesn’t advise saving all of 100%, as this budget is very realistic.

If you put all the discretionary income in savings, it’d disturb your budget. A more tangible and attainable figure would be a great place to begin. Saving a specific percentage of your discretionary income would be a good start.

Saving money for no reason would make it another unreal budget plan that would never become a reality. So it’s better if you save for a reason: It can be to procure new furniture, pay off student loans or craft an emergency fund.

Do keep your ultimate goal in mind while you are saving. Do remember that the Savings Pig is only one side of the coin, and it won’t be of any use if the Spending Wolf keeps chomping on your hard-saved cash.

That is why your spending strategy might turn out to be the deal-breaker. As the Kakeibo Method leaves no stone unturned, it has a distinct spending strategy for you which would help you save big money while spending wisely.

III. Spending Strategy

As we highlighted before, saving money is just half the battle won. To go all the way, one has to craft a splendid spending strategy that is rock-solid to the core. The Kakeibo Method is the perfect hack for your spending habits.

The Kakeibo Method classifies your spending between needs and wants—two crucial blips of human behavior. Keeping in mind these two salient factors, there are four parameters which can help you in regulating the spending habits:

1. Survival

Some errands cannot be stalled and some bills cannot be delayed. In most occasions, you have no choice but to spend money on these categories. The survival factor includes paying for commute, gas, groceries and other utilities.

HOW TO SAVE ON SURVIVAL: You can’t compromise on commodities which are crucial for survival, but what you can do is stall their consumption or look for newer alternatives.

PRO TIP: You should use coupons when you’re shopping, be it online or in-store. Some of the famous coupon-dwellers are:

For instance, there is a lot of scope to save money on groceries as one can try new brands in the market, which are generally available at a lower price. You can also try the frugal month strategy, where you can cut down on fancy foods for a month and stick to basics.

2. Culture

Kakeibo Method believes that culture is the driving factor in shaping one’s personality. Although spending on culture is technically a want and not need, it is understood that purchases that enrich your life’s meaning are needed.

HOW TO SAVE ON CULTURE: Spending money on your hobbies and interests can never go wrong, and good hobbies can always be enjoyed without spending money. If you’re into reading, don’t buy the books and issue them from the library.

PRO TIP: You can sell books online and make way for new names on your bookshelf. Some of the best places to sell books online are:

The activities of culture are there to enlighten your senses, inspire you, and give you a better perspective about life. So if you are seeking inspiration, you don’t really have to splurge spend on it. Inspiration and lessons are everywhere (including our website).

3. Optional

The optional expenses are ‘hanging out’ part. Kakeibo Method clearly states that spending money on eating out; weekend binge-drink-fests and shopping sprees are some reasons that screw the whole budget.

HOW TO SAVE ON OPTIONALS: Well, come on now. We are not going to stop you from living a good life. All you have to do is live frugally and you’d be spending less on optional expenses in no time.

PRO TIP: The best way to save money on optional and leisure part is ordering online rather than going to the restaurant all the way. Studies show that ordering in is more economical rather than dining out.

If you want to know some names, UberEats and Caviar are two apps that you can use to order from local restaurants and possibly save money on optional purchases.

4. Extras

In a literal sense, extra expenses are those which come up without notice. In most cases, it involves emergency expenses like a car-breakdown, birthday bash for your little one’s 16th, house repairs and replacements.

HOW TO SAVE ON EXTRAS:  Normally, the extra expenses dwell up for causes that just can’t be taken care of while saving money at the same time. But in cases like parties and anniversary gifts, one must try and save money by delaying them as much as possible or wrapping them up frugally.

PRO TIP: To cover yourself from unexpected expenses, get insurance for your assets and yourself.

Now that you know the four pillars of Kakeibo Method, write them down and mention your expenses in your Kakeibo Journal. This will give you a clear view of how much you’re spending on every category.

Traditionally, the followers of Kakeibo Method take four envelopes and name them with respective pillars. Now fill those envelopes with the amount of cash which you labeled in each category of your journal.

The method of stuffing cash with envelopes is kind of old skool (and risky), so it would be better if you write your expenses down in every pillar and its category.

IV. Shake things up

Now that you know what you’ve been doing and where is it going wrong, it is time to shake things up. Remember when we told you about color-coding? That’s where those colored pens will be of use.

Highlight all those nefarious expenses and start working to stop the money from flowing there. Some of the biggest expenses that you’ll find are completely useless after maintaining the Kakeibo Journal are:

  • Your Gym membership (if you don’t go)
  • Your Cable subscription (you haven’t turned it on for long)
  • Those morning Lattes
  • Midnight snack-binging
  • Weekend Parties

Now that you know where it is all going wrong, it is time to make it right. Here are some assistants that’ll help you with cutting your spending in all useless categories:

  • Trim would cut all those useless recurring expenses and stop the money from going out mysteriously—hence increasing the savings.
  • Charlie, like Trim, is your all-in-one personal finance manager. Download it and you’ll get an insight into your finances like no other.

V. Look at the Books

Now that you’ve wrote everything down in the Kakeibo Journal, have a look at it. Here’s what you’d see:

  1. The distribution of monthly income, recurring expenses and the balance i.e. Discretionary Income is clearly visible.
  2. Your objective of saving money, which was rather unclear, is right there in front of you. Build on your long-term goals with the Kakeibo Method.
  3. The question “where’s my money going?” finally has an answer. As you’ve classified your spending into four categories, you actually know where your money is going.
  4. Once you have a lucid view of where you are spending, you can decide on pulling the axe and cutting expenses.
  5. It’s time to cut expenses at places where you feel—be it on bare necessities or on lavish parties, take your pick.

In the End, you’re the Victor!

If you were wondering why the Kakeibo Method would help you save money, this notebook does nothing out of ordinary. There’s nothing new with the philosophy and it is just self-introspection doing the trick.

In short, you’d get a detailed insight into the world of your own finances, which would be nothing less than an eye-opener. Maintaining a journal is fun, takes your mind off the bad stuff and makes personal finance fun.

Start maintaining a Kakeibo Journal today and delve into the world of finance—the classic way!


Be an influencer. Share what your voice say and get paid. Get rewarded with gift cards and cashout and change the product of tomorrow.


Recommended Posts

Previous Post Next Post