kakeibo the japanese method of budgeting and managing finance

Kakeibo: The Japanese Method of Budgeting and Managing Finance

by Weave Asia

Kakeibo is a financial philosophy emphasising thoughtful, deliberate spending and saving rather than just a budgeting technique. Although this may sound high, kakeibo is relatively easy to learn and adapt to your lifestyle. Best of all, kakeibo is cost-free other than purchasing a pen and paper to record your spending.


What is kakeibo?

The name Kakeibo is derived from a Japanese word that means “household financial ledger”. Therefore, a kakeibo is basically a physical budgeting journal where users specify savings objectives and respond to various financial questions related to their spending habits. They then keep track of their spending, categorise their purchases, and review their spending each month at the conclusion.

Many budgeting apps, such as PocketSmith and You Need a Budget (YNAB), are similar in their approach to kakeibo. But with kakeibo, there are no downloads, bank account links, or routine notifications – just plain old record keeping on a physical journal.

More significantly, kakeibo encourages you to reflect on your relationship with money and comprehend the motivations behind each purchase you make. Another objective of kakeibo is to remind its practitioners to take things slowly when they can spend hundreds of dollars by pressing a few buttons on Shopee or Zalora


The origins of kakeibo

In Japan, kakeibo is considered a tradition despite being somewhat new in Singapore and other parts of the world. In a 1904 issue of a women’s magazine, Japanese journalist Hani Motoko reported about the kakeibo technique for effective budgeting. Her readers, Japanese housewives in charge of managing their household expenditures, found the kakeibo accounting method appealing. 

Following author Fumiko Chiba’s book “Kakeibo: The Japanese Art of Saving Money” which was released in 2018, the practice exploded in the West and other parts of the world. Chiba and other specialists claim that kakeibo reflects cultural values held by the Japanese people on the value of saving money. In Japan, money serves a ceremonial purpose. 

Financial savviness has been instilled in Japanese kids since young. Money is given to kids as a holiday gift, and they are urged to save it up for worthwhile purchases. Even adults don’t treat money casually. Compared to other nations, Japan has a cash-heavy economy; credit cards, which allow for frequent, large-ticket purchases, aren’t used nearly as frequently as they are in Japan.


How do you kakeibo?

Kakeibo is very simple to practice, here’s a step-by-step guide to starting kakeibo:


1. Get a notebook

Kakeibo adheres to its early 20th-century Japanese origins by requiring actual handwritten records. You can use any notebook or bullet journal that allows you to jot down your financial details clearly.

2. Calculate your monthly income and deduct fixed expenses

3. Set a savings goal for the month

4. List Your Spending Categories

Kakeibo lists four “pillars” or categories of spending:

  • Needs: The basic requirements, such as food, housing, auto payments, or student loan debts.
  • Wants: Items that are entertaining but not necessarily a need (takeaway food, hobbies, entertainment).
  • Culture: Any expenditure on cultural goods and services, including books, museum admission fees, concert tickets, TV streaming services, gym fees, etc.
  • Unexpected: Additional costs, such as hospital bills or home repairs.

5. Categorise everything you buy

All of your purchases should be included with the purchase amount and under the relevant “pillar”.

The categorising part is seemingly what makes kakeibo most effective. Apparently, you give a purchase more thought than you usually would when you have to categorise it.

6. At the end of the week or month, answer four reflection question

Occasionally, whether weekly or monthly, jot down your responses to the following questions:

  • How much cash do you have?
  • What amount of money are you hoping to save?
  • How much do you spend each month?
  • What can you do better financially?

The final question, “How can you improve financially?” is intentionally left open-ended. You are urged to consider your response and make it unique. Finding ways to reduce expenses is only one aspect of improvement; another is choosing to spend more on activities you find fulfilling and less on items you didn’t place as much importance on. Or you could discover a way to avoid an expensive unforeseen circumstance in the future.

How can kakeibo help you save money?

With kakeibo, you can grow your money in the long run. Kakeibo keeps your financial objectives top of your mind. Most importantly, the kakeibo method can sustainably help you save money over time. Likewise, setting a savings goal you know you could meet will give you the confidence you need regarding money management.

Additionally, kakeibo is designed for long-term financial planning; the four questions will make you consider your long-term financial objectives. Kakeibo, like any effective budgeting system, enables you to plan for the future without experiencing deprivation or anxiety in the present.


Many kakeibo users claim they actually got into the habit of enjoying money management. If this approach seems interesting, pick up a notebook and pen (and perhaps your preferred inexpensive beverage) and start immediately!

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