This Japanese Budgeting System Could Be the Key to Saving Big Bucks

Forget apps that track your expenses for you. Forget Excel spreadsheets that require meticulous data entry. Forget email notifications of your bank balance.

What you need to get your bills under control, save money, and finally feel some financial peace of mind is a 100-year-old Japanese organizational system that lets you turn your financial life into a journal that doubles as a work of art.

Welcome to the mindful art of kakeibo.

What is kakeibo?

Back in 1905, Motoko Hani, the first female journalist in Japan, published an accounting book for household finances (known in Japanese as a kakeibo) in a women’s magazine. Hani believed that financial stability was important for happiness, and she wanted every family to be able to get control of their finances. Some 113 years later, Hani’s original kakeibo book is still sold all over Japan.

As with any budgeting system, the basic practice of kakeibo is about recording your income and your expenses. However, this program has users think about their money a little differently.

To start, at the beginning of each month, once you have recorded your fixed income and expenses, you are asked to make a savings goal for the month, as well as a promise to yourself for the month. For instance, you might make it your goal to set aside an additional $100 that month for an upcoming vacation, and you might promise yourself that you will brown bag your lunch at least four days a week.

After you have done your beginning-of-the-month accounting, goal-setting, and promise-setting, you need to record your expenses during the month. The system has you categorize each of your expenses under one of four spending pillars. These four pillars are:

  • Survival: This covers everything you need to survive, such as rent or mortgage, groceries, medical expenses, etc.

  • Optional: This is for things you don’t need to do, such as restaurant dining, going out for drinks, shopping, convenience purchases, and the like.

  • Culture: This is for the costs incurred for cultural experiences, which includes your Netflix subscription, theater tickets, books, and magazines.

  • Extra: This covers any unanticipated or one-time expenses, like birthday gifts, car repairs, or furniture.

In addition to categorizing each purchase you make under these four…

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