What is Kakebo?
Kakebo is the Japanese art of saving money. Folks in Japan are masters of minimal living, and the method of the Kakebo budget is no exception. It was invented in 1904 by a woman named Hani Motoko, a Japanese journalist and woman who was way ahead of her time. In later years she published a women's monthly magazine, and became a pioneer in promoting education for women. Based on her teachings, women were elevated as managers of the home in all areas, including finances.
For decades in the early 1900s, women in war-torn Japan became the de facto leaders of the savings associations and neighborhood associations. Using ideas taught by Hani Motoko, the women of Japan honed the household ledger into not only a record of income and expense, but a mindful process that enabled them to save significant sums of money for their families. In post-war Japan, to be a good housewife was to be a good saver and dutiful keeper of household finances.
Kakebo (pronounced “kah-keh-boh”) is a Japanese word meaning (literally) “book of accounts for household economy”. It is sometimes spelled “Kakeibo” on the web, and I'm not sure which is the correct spelling! Kakebo is a simple but effective method to reduce to mindless spending so rampant in our culture. There are many versions of the Kakebo, from super simple to slightly complicated. You could easily create your own spread in a bullet journal, if that's more your style.
The Art of Kakebo
The art of the Kakebo budget is based on these four factors:
- The amount of money available.
- How much you would like to save.
- The amount of money you are spending.
- How you can improve.
Kakebo helps you identify waste, and find significant areas to make adjustments. This means spending consistent time on planning finances and following up on results. The Japanese super-housewives tally up every single receipt and enter it into the Kakebo.
Expenses are typically broken out into four categories:
- Survival: food, rent, transport, kids
- Optional: eating out, shopping
- Culture: books, music, shows, movies, magazines
- Extra: irregular events such as gifts, repairs, furniture
3 Simple Steps in the Kakebo Budget Process
1. Start of Each Month – Record what your expected income and known expenses will be. Decide how much you want to save for the month, based on how much money is left over after paying for necessary household expenses. Use my free worksheet to try it out. Although my worksheet does not break out expenses according to the categories listed above, you could label each line item expense with an appropriate category.
2. Daily/Weekly – In ledger form, write down every expense you incurred each day. Every.single.expense. Add up the total for each day, and then add up the total for each week. Each week, check if you are on track for the month. Use my free Kakebo Monthly Ledger worksheet.
3. End of Each Month – Take your actual income and expenses and compare it with your goals. This is a time for reflection about you accomplished for the month, and what needs can be improved upon. The point is not to beat yourself up about mistakes or missed targets. Reflection is a mindful way to begin to train yourself by being more aware of how your money is spent. Record your thoughts and then go back to the first worksheet and start planning for next month.
Kakebo in Modern Times
You might ask, wouldn't a spreadsheet or phone app work better? Perhaps, but using technology takes away from the mindfulness of the task. Its not just about numbers with Kakebo, but more about gentle affirmations and thoughtful questions. This way both quantitative and qualitative aspects of budgeting are addressed. The traditional Kakebo also contains space to separate and save receipts, write up monthly and yearly savings goals and budget for unforeseen expenses. In fact, this method would work great with the envelope system, using one envelope for each of the four categories of expenses. Each week you withdraw the cash needed to cover the expenses for that week, based on your monthly budget for each category.
If you're interested in learning more, there are several books available on Kakebo. Here are two popular titles: