Also known as Kakeibo, Kakebo is a Japanese personal finance system gaining popularity in the Western world. The word Kakebo actually means “household finance ledger”.
To learn more about the history of Kakebo and how it works, read my article Change Your Money Mindset With The Kakebo Budget.
Find two free 2021 Kakebo printables at the bottom of the post.
What I Love About Kakebo
- Simplicity
- Consistency
- Engagement
Simplicity
Kakebo is practically a verb for spending quality time with your personal finances. As we advance through a tech-centric world and automate pretty much every aspect of our lives, I love how the Kakebo method allows me to embrace simplicity.
What do I mean by simplicity?
Its the quality or condition of being easy to understand or do. Like chopping vegetables with a sharp knife, or digging in the dirt to transplant a shrub.
Simplicity with personal finances is important because it strips away the apps, the charts, the pretty pictures that keep us from dealing with the most fundamental issues: are we meeting our financial goals?
It gets us into a routine of tallying up expenses and comparing the total against a budget. Its all hand-written and its therapeutic.
Consistency
The Kakebo method is all about consistency and cadence. A regular daily or weekly routine is essential to maintaining a household ledger.
Consistency means you are prioritizing the activity of tracking your finances, and are more likely to meet your goals because of the discipline a routine establishes.
Engagement
Each year my husband and I participate in a pigskin football league where we pick games each week that we think will win against the spread. We don't play to win (:-P), but to stay engaged. It gives us a reason to watch and be personally invested in the outcome of several games each week.
The Kakebo method keeps you engaged in the activity of tracking your expenses and comparing back to your budget or savings goals.
Alternative methods that involve opening an app from time to time, or calculating your results monthly, just don't provide the same level of engagement that the Kakebo method does.
Engagement is everything. Crunch those numbers. Slice them, dice them, and plan for future goals. Be inspired by your own progress.
How Kakebo Helps Me Stay on Track
I'm a finance executive.
I spend all day crunching numbers, preparing narratives, analyzing cost centers, and projecting future profits. Why on earth would I want to go home and spend more time doing numbers stuff?
At work I'm performing analytics at a complex level using Excel, accounting systems, and other sophisticated programs.
In the evening, its relaxing for me to gather up my receipts and write out my expenses in my Hobonichi Techo (a daily planner) using one of my favorite pens.
At the end of the week, I tally up the week's expenses and compare to my budget (I budget on a bi-weekly basis). If we overspent in a certain category, we work on correcting it the following week.
By the end of the month, there's no excuse to not be at or below budget on our expenses. (Barring an emergency).
While I'm tallying expenses, I also spend a little time on our plans for FIAR. What if we buy a different boat, or change our timeframe? Or our house sells for more than we expected?
I run different scenarios based on possible outcomes, renewing my excitement of our future plans to sell it all and sail away.
In short, spending time with the Kakebo is another way I plan and dream about our future.
Adapt Kakebo to YOUR Needs
The Kakebo, like any other system, can be adapted to suit your personal needs. Here are some ways I've done that for myself:
- I keep my Kakebo in my daily planner. I list expenses daily and then tally up each day's total on my weekly spread for a weekly total. Then I compare the weekly total to my budget and decide on how much we can spend the following week.
- In addition to tracking expenses, I also track my net worth by listing out the value of each bank & brokerage account, and the balance of each credit card weekly.
- I use my routine Kakebo time to also plan and dream for the future, making expense tracking one of the more exciting activities of the week!
Decide what works for you, and establish a routine to keep it going. Without a daily or weekly habit, the Kakebo will not be an effective tool for you to use.
You can keep your Kakebo in a dedicated planner or book, in your daily goal planner, or even in a spreadsheet, if that suits you best. Decide on a process that works for you and keeps you inspired!
Here are two free 2021 Kakebo printables to get you started –
