Kakeibo, pronounced "kah-keh-boh,“ is officially a “budgeting journal used to set savings goals and spend wisely”. It hit the headlines in 1904, when it was promoted as a way for housewives to manage budgets. The Japanese government encouraged the idea, to help people save Kakeibo makes you plan how much to spend beforehand rather than writing down what you spent . At the beginning of each month, you’re meant to sit down and think about: How much you have to spend ? How much you want to save ? What you need to do to reach your goals ? During the month, you track the money coming in and going out. Then at the end of each week and month, you Add up what you’ve spent, Check if you are meeting your savings goals, and Think about how you can improve in future.

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Kakeibo:The Japanese art of saving money

2. What is Kakeibo, the Japanese art of saving
money?
 Kakeibo, pronounced "kah-keh-boh,“ is officially a “budgeting
journal used to set savings goals and spend wisely”.
 It hit the headlines in 1904, when it was promoted as a way for
housewives to manage budgets.
 The Japanese government encouraged the idea, to help
people save
 Kakeibo makes you plan how much to spend beforehand
rather than writing down what you spent .
 At the beginning of each month, you’re meant to sit down and
think about:
 How much you have to spend ?
 How much you want to save ?
 What you need to do to reach your goals ?
 During the month, you track the money coming in and going out.
 Then at the end of each week and month, you
 Add up what you’ve spent,

3. Start of the month: set savings goals
 According to Kaikeibo, you start the month by working out:
 Money coming in- If you have a salary, put down the amount
that actually hits your account after TDS , PF etc is taken off.
 Add on any freelance earnings, savings interest, birthday cash or
anything else that bumps up your income.
 Fixed money going out- This is the essential bills, like rent ,
Society tax, gas, electricity, water, broadband, phone, mobile
and life assurance.
 Add on any other fixed monthly payments, like loan repayments
and subscriptions.
 Money left- Take away the fixed money going out from the
money coming in – and hope you have some money over!
 This is the money you can choose whether to spend or save.
 Savings amount- Decide how much you’d like to save.
 How much you can spend- Now, work out what you have left
to spend during the month, after taking off your savings.
 Divide by the number of weeks until you next get paid, to find

4. Example of setting Kakeibo spending and saving
goals
 Say I am a pensioner and get Rs 1,00,000 per month
 Fixed expenses
 TDS- Rs 5000
 Society Maintenance -3000
 Electricity -1000
 Aya/Servant- 2500
 PPF -12000
 Balance 100000-23500= 76500
 If you want to save 20000 , that leaves 56500 to spend
over the month (76500-20000).
 Divide by 4 weeks, and if you keep your spending to 14125
per week , you’ll achieve your savings goal.
 Kakeibo also encourage you to write down what you’re
saving for, and add quick notes about how you’re

5. Questions before purchasing Non Essential Items
 According to the kakeibo method, you must ask
yourself the following questions before purchasing
any non-essential items — or the things you buy on
impulse, but might not necessarily need:
 Can I live without this item?
 Based on my financial situation, can I afford it?
 Will I actually use it?
 Do I have the space for it?
 How did I come across it in the first place?
 (Did I see it in a magazine? Did I come across it after wandering into a
gift shop out of boredom? Did I get motivated by looking at others
purchasing it?)
 What is my emotional state in general today?
 (Calm? Stressed? Celebratory? Feeling bad about myself?)
 How do I feel about buying it?
 (Happy? Excited? Indifferent? And how long will this feeling last?)

6. How to spend more mindfully?
 Here are some simple kakeibo-themed strategies to ensure
that you spend more mindfully:
 1. Leave the item for 24 hours- If you're still thinking about
the item the next day and can afford it, then make the
purchase.
 2.Don't let "blowout sales" tempt you-For each item you
want to purchase in sale, ask yourself whether you would
buy it if it were full price.
 3.Check your bank balance regularly- Checking your
balance will help you feel more in control of your finances
because it brings into focus how much money you have to
spend.
 4.Spend in cash- Physically handing over cash rather than
just mindlessly swiping your card makes you more conscious
of what you're spending, and you will find it easier to budget.
 5.Put reminders in your wallet- Sticker on credit card
bluntly saying, "Do you REALLY need this?!" prompts you to
take a step back before making a purchase
 6.Change the environments that cause you to spend- like

7. During the month: track weekly spending
 Now you have to put your plans into practice. Traditional
Kakeibo divide spending into four categories:
 Survival- like food, transport and children’s costs
 Optional- like eating out and shopping
 Culture- like books, music, theatre, cinema and exhibitions
 Extra- for unusual spending like presents and repairs
 One may come up with own categories for spending, such
as food, travel, clothing, eating out, children’s expenses,
entertainment.
 Do write down any spending in each category every day.
 Add up what you spent each day, and at the end of the
week.Add up how much you spent for each category and how
much you spent in total.
 Do check up actual spending against targeted weekly
spending limit set
 Kakeibo recommends adding notes to explain your
spending.
 Perhaps you spent more than normal due to a weekend away, or
less if you were ill in bed.

8. End of the month: review spending
 At the end of the month compare your plans with the
reality.
 Kakeibo suggests digging out figures from the beginning of
the month, for the money available after essentials and the
monthly spending target.
 Then add up how much you actually spent, and work out how
much you were actually able to save.
 To improve your finances in future, the journal has space to
answer four questions at the end of each month:
 Did you meet your savings target?
 What ways did you find to save money?
 What areas did you spend too much on?
 What will you change each month?.

9. Think about the year ahead
 The other useful element in Kakeibo is taking the time to
think about the year ahead.
 If you focus entirely on daily spending, it’s all to easy to
forget less frequent bills – like
 Road tax for car
 Medical
 Festival expenditure
 Gifts on birthdays/marriages
 Social obligation
 If you consider these unusual expenses beforehand, you
can work out
 How to spend less,
 Save more and
 Try to avoid running out of money.

10. Tips for trying Kakeibo
 Not spending vs spending well-
 Focus on spending well.
 Make it a positive step rather than a sacrifice.
 Divide spending ‘needs’ and ‘wants’-
 Major monthly spending goes on essentials like council tax,
gas, electricity and rent or mortgage, but much of the rest is
variable.
 Tracking the amount that goes on essentials can help
identify where it’s possible to make savings.
 Set a manageable savings target-
 Better to set a small savings target at the start , rather than
large sum which you can’t .
 As you continue tracking your income and spending, you
may find it easier to save a larger amount.

11. What’s good about Kakeibo
 Kakeibo is generally A Good Thing.
 If you want to save money, then you must focus on saving
first, and spend what’s left.
 Kakeibo encourages us to be much more intentional,
 Working out what we want to save at the start, and
 Reflecting on
 What went right?
 What went wrong ? and
 What to do differently in future?
 Setting concrete goals makes you more likely to reach
them.
 Once you’re aware of where your money is going, you can
make changes and may curb unnecessary expense.
 Resorting to pen and paper, Kakeibo-style, makes us face up to
our finances.
 Physically adding up the totals each day, week and month

12. What’s missing from Kakeibo
 Kakeibo seems to assume your fixed expenses are just
that: fixed.
 Recommend tackling each item in turn rather than paying bills
on autopilot.
 See if you can cut those supposedly fixed costs, by by
changing to LED bulbs instead tube lights to reduce electricity
bills etc.
 Focus on earning more, not just spending less.
 If you’re on a low income, and your expenses are already cut
to the bone, it’s just not possible to save more without bringing
in some extra cash.
 Finally tracking spending every day may sound difficult but
can be managed in a coordinated fashions weekly or even
twice a week
 Anyway, I’m willing to give Kakeibo a whirl as part of a New