If one of your goals for this year is to have more money saved in your bank account (who doesn’t want that, right?), then you might want to look into “kakeibo,” which in Japanese means “household account book.” It's a tool that has been used in Japan for more than a hundred years. But articles on kakeibo have been popping up all over the Internet recently, from ABC News to Stylist, thanks to the popularity of the recently published book Kakeibo: The Japanese Art of Saving Money.
“[Kakeibo] is the essential tool used by any money-savvy Japanese household budget manager,” explained Just Hungry. “In a typical Japanese household, the wife is firmly in charge of the household finances... Many magazines aimed at housewives include a giveaway version as a supplement to their December issues for use in the coming year.”
A quick Amazon search for kakeibo will show you that they are like yearly planners.
So how does kakeibo work? Inside these “housekeeping books” are pages for monthly, weekly, and yearly sheets to fill up. At the beginning of each month, the housekeeping book will ask you:
- Note down your income and subtract from it fixed expenses like the house rent, and the internet, electricity, and water bill.
- From what’s left of your income, deduct the amount you want to save (20% of your income is a good amount to aim for, according to financial experts).
- The amount that you get after savings is how much you can spend.
- The Japanese also use their kakeibo to write down their daily expenses in dedicated weekly pages that can be more difficult. There's a page for an end-of-year finances summary, too.
A kakeibo journal provides categories that can be subdivided further. For food, for example, there's a section for carbohydrates (rice, bread, etc.), meat (beef, pork, fish, etc.), and vegetables and fruits. According to Just Hungry, “there are kakeibos that combine budgeting functions with meal planning and recipe tracking, too.”
Another aspect of kakeibo is categorizing expenses into “envelopes,” not a foreign concept at all. The idea is to physically divide cash into labeled envelopes with categories like “fixed expenses” (food, rent, bills, etc.), “optional” (allocated for family meals to restaurants, shopping for clothes, etc.), “culture” (movies, monthly subscriptions, etc.), and “extra” (gifts, repairs, etc.).
You can't take money from the other envelopes once an envelope is emptied or spent. If you run out of money in the “optional” envelope, the family will have to wait until the next month to eat out, for example. Obviously, you are not expected to cheat (after all, Japan is a country where you can leave your bag on the table, and no one will steal it). If any money is left in the envelopes, they can be considered as savings.
You are probably thinking this concept of saving especially the envelope technique isn't new, and you are right. You can probably do without the book to practice it yourself. What kakeibo does teach you if you stick to it is how to mindfully track your family's spending. It should help you get concrete answers to questions like “Where does all our hard-earned money go in a month?” and “Where can we cut back on so we can save more?”
Recording everything down and spending only what you have set aside in the envelope makes you more aware of how much money you do have. It means you can plan your finances better. You will know whether you have enough money for that family vacation (and you know how long it will take). And if you don't, then kakeibo should be able to help you plan how to save up for it. You are very much in control of your finances. In Japanese, that means a calm and happy life.
Kakeibo: The Japanese Art of Saving Money isn’t available in local bookstores yet and the kakeibo journals are definitely cute but they’re in Japanese! The good news is, though, you can start with just a regular notebook, a few highlighters, and a ruler as well.