How to Use Kakeibo Saving Method - Money Marshmallow (2024)

Modern money tech, such as Apple Pay, Klarna and one-click checkouts have made spending money easier than ever. But while modern technology is convenient, it can also lead to mindless spending, making saving difficult.

However, the Japanese tradition of using a kakeibo, which translates to “household finance book,” offers an easy solution to mindless spending habits. This budgeting system combines tracking purchases with the habit of mindfulness to limit unnecessary spending and help you achieve savings goals.

Whether you’re a saving expert or a beginner who is struggling to save, the kakeibo saving and budgeting method is worth giving a go. This is a great method, especially for those who don’t like more extreme saving techniques, such as no-spend challenges.

Often referred to as “the Japanese art of saving money”, kakeibo is a household financial journal that offers a simple, no-frills approach to managing your finances. Similar to otherbudgeters, the idea behind kakeibo is to help you understand your relationship with money. This happens by keeping a ledger of all incoming and outgoing money.

However, unlike many other budgeters, kakeibo doesn’t involve any budgeting apps, software or Excel sheets. Instead, it emphasises the importance of physically writing things down as a meditative way to process and observe your money habits.

Getting started with kakeibo saving method is simple: all you need is a notebook that you start filling in with your incomings and outgoings. Fumiko Chiba’s book Kakeibo: The Japanese Art of Budgeting and Saving Money provides simple instructions on how to use a kakeibo:

At the beginning of each month, write down the following in your kakeibo:

• Incomings
• Fixed outgoings, such as rent or mortgage, utility bills, insurance and groceries
• The amount of money you currently have
• How much do you want to save
• How much you can spend

In addition to the above points, you are also encouraged to make your own notes, such as what you are aiming to save your money for.

At the end of the month, it’s time to write a summary of how much money you had available to spend during the month, how much you would have wanted to spend and how much you have actually saved. Then, answer the below questions that will help you to learn and prepare better for the following month’s saving goals:

• What saving methods did you come up with?
• What did you spend too much money on?
• Did you reach your saving goal this month?
• What are you going to do differently next month?

As you can tell by now, kakeibo is an easy saving and budgeting method. But what makes such a simple method so effective?

The effectiveness of kakeibo is based on four important factors:

1) Visualisation: Keeping a clear record of how much and where you spend your money will help you see your spending habits on a larger scale. Writing by hand also makes it more tangible. Making your spending visible is important, especially if you often use credit cards or contactless payments. Paying with a quick tap of a card is convenient but distances you from your spending habits.

2) Reflection: Take some time to properly think about the questions asked in your kakeibo every month. The answers will help you to learn more about both mistakes and successes. You will then be able to succeed better in the next month. Reflection will help you to develop yourself as a saver.

3) Attitude change: Kakeibo brings out the Japanese attitude towards saving. Instead of thinking that saving is about missing things out, it’s seen as spending money “well”. This changes the typical negative attitude towards saving into a positive one. This change in money mindset will encourage you to keep going and continue saving.

4) Necessities vs. desires: When you look at your filled kakeibo, you will quickly learn to distinguish between necessary expenses and desires. For example, eating is essential but regular takeaways or meals in restaurants can quickly consume your budget.

Saving isn’t always easy to start, but the same rules apply to starting exercising; you just have to find a method that is suitable for you. Whether you are saving for a big life goal, such as a wedding or first home, or to be able to start investing, kakeibo may be your answer. It helps you to observe your spending habits and brings saving as part of your daily life. There are also various kakeibo printables available online that will help you to get started with your saving journey.

Related: 6 Saving trends that can help you grow your savings