Kakeibo Budgeting method

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Kakeibo. Sometime last week I came across this Japanese budgeting technique. What really sparked my interest was the results that this budgeting method had created for its users. In the course of my research, I discovered that Kakeibo budgeting method is said to have helped the people of Japan to save up to 35% of their income.

Sounds too good, doesn’t it. Well, dear reader let me give you a brief history of this (Kakeibo)budgeting method.

Free Kakeibo monthly budgeting tracker

About over 100 years ago, Japan was merely an agricultural country. Much like our rural areas. But in the year 1904, a female journalist Hani Motoko shared this budgeting technique with her readers. Her readers were mainly housewives. This technique was so helpful that these readers shared it with other people. Therefore, the Kakeibo budgeting method became a norm in Japanese households. Today this method is taught to school-going children.

Fast forward to today, this budgeting method is a common household practice. Not only for wives but even for children. And look at the country itself. It is no longer an agricultural-based economy yet the people of Japan still use this 100+-year-old budgeting technique.

Enough of the history. Let’s dig into the Kakeibo budgeting method.

Kakeibo Budgeting Method.

The word Kakeibo translates to Household accounting notebook. Makes sense now doesn’t it. This budgeting technique is so renowned that it has a whole book written about it.

The Kakeibo book

Why is the Kakeibo budgeting technique so effective?

Why is the Kakeibo budgeting technique so effective that it has helped the people of Japan save up to 35% of their income?

Well, this budgeting method is effective because it utilizes motor memory. It is said that we remember things more clearly when we handwrite them down as opposed to typing them. Like on a phone or computer.

The Kakeibo budgeting method also helps its users get more organized and disciplined with their money. This is by ensuring that one keeps track of every expense. As well as being accountable for their money goals.

How to budget income using the 50/30/20 rule.

What you need for the Kakeibo budgeting Technique

You simply need 3 things for this budgeting method.

These things are 2 notebooks and a pen. You can use any ordinary notebook but there are Kakeibo budgeting journals.

The two notebooks, they should be of different sizes. One bigger than the other. The big notebook will be used to record three things:

a) Your monthly income plan

b) Your monthly expense plan.

c) Your monthly savings plan.

The small notebook will be used to record your expenses in real-time. This means that you’ll need to carry the small notebook everywhere you go and record everything you spend your money on.

4 questions to ask yourself while doing the Kakeibo budgeting method

This budgeting method is very hands-on. That is a DIY (Do It Yourself) budgeting method. Knowing that, here are some vital questions to ask yourself when doing the Kakeibo method.

How much money do I:

  1. have?
  2.  want to save?
  3.  spend?
  4. How can I make things better?

After answering those vital questions you can now start the Kakeibo budgeting method.

Here’s a summary of how to do the Kakeibo budgeting method.

Step 1: Write down your total income from all your sources of income. Note that this is not the expected income but the actual income.

Step 2: Write down and deduct all of your fixed expenses. These could be your rent, utility bills shopping, and so on.

step 3: Deduct the amount you want to save.

Step 4: Divide the remaining amount by 4 weeks. This will be the maximum amount you will be spending per week.

Step 5: Review your spending to see the areas you need to make improvements.

Well, that’s it for this budgeting method. Try it out and let me know if it works for you. Feel free to use the free Kakeibo budgeting template below.

Free Kakeibo budgeting template

 

 

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Gertrude Njeri is an expert in creating personal finance content and has a bachelor’s degree in accounting. She is a skilled personal finance content creator with more than three years of expertise (writer, video creator, and editor). Additionally, she excels in simplifying complex subjects into engaging, clear, and easy-to-understand information. Her instructional materials go a long way toward assisting individuals in making wise financial decisions.

2 thoughts on “Kakeibo Budgeting method”

  1. Pingback: How to budget KES10000 using the 50/30/20 budgeting method - Financebuddy

  2. Pingback: How to budget KES10000 using the 50/30/20 budgeting method - Financebuddy

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