Can Kakeibo Help You Save More Money?

If you’re considering trying something new to deal with your finances, Kakeibo could be that breath of fresh air. A Japanese method of managing your budget, it is a gentle and reflective strategy which emphasises mindfulness.

Given the hustle and bustle of everyday life, and the accompanying onslaught of ads and consumerism, Kakeibo might just provide that step back to give you a sense of renewed perspective and hope when it comes to getting your budget under control.

What is a Kakeibo budget

Kakeibo, which translates into “household financial ledger”, was first mentioned by journalist Hani Motoko in 1904 in a women’s magazine. Presumably, she was describing or recommending the method to housewives who had to balance the books for their households.

The budgeting method has a few key characteristics. Firstly, you are to set a monthly savings goal after taking stock of your income and deducting fixed expenses such as utility and internet bills.

Secondly, it’s recommended that all expenses be written down by hand. The idea is to have the chance to process each expense through the process of manually recording it.

When you record your expenses, split them into four categories: needs, wants, culture and the unexpected. Needs and wants are self-explanatory – the essential purchases such as groceries, and the non-essentials or “luxuries” that you could live without. Culture relates to the arts and learning – books, movies, plays, etc. The unexpected is unavoidable expenses that suddenly pop up, such as medical fees and the cost of fixing a spoilt appliance.

Finally, after recording your expenses, reflect regularly. Take stock of how much you’ve spent, your progress towards your savings goal, whether you need to save more, and how to improve if necessary.

What makes Kakeibo different from other budgeting methods

What sets Kakeibo apart, as with many aspects of Japanese culture, is its integration of mindfulness into budgeting. In other words, it guides you to pay close attention to what you are spending on. It also gives you opportunities to reflect on whether you are spending as you want to, and whether to make changes.

Kakeibo doesn’t prescribe any particular rule, percentage or ratio to follow when it comes to savings. Instead, it encourages you to set personal goals which can be continually re-visited and adjusted, as you consider whether you are spending in ways which are meaningful and realistic for your lifestyle.

Another crucial differentiating factor is the categories that Kakeibo applies to expenses. While it’s usual to identify your “needs”,“wants”, and even “emergencies”, the inclusion of “culture” places an emphasis on personal growth,learning, and appreciation of the often-unquantifiable value of the arts. That frees you up from viewing a musical, for example, as a “luxury”. It gives the perspective that such an expense is an accepted and expected part of deploying your finances.

 Read more: 7 Best Budget-Friendly Ways To Treat Yourself

Kakeibo in practice

I have generally thought myself quite diligent in keeping to my monthly budget, though there were times I overspent on unanticipated meals or occasions. So when I heard about the Kakeibo method of tracking one’s expenses, I was intrigued. Could it possibly help me save more money? How different could it be from what I had been doing?

What I first noticed was that instead of setting aside a fixed amount of savings each month, Kakeibo advocated having a savings goal. That made me feel a little uncomfortable, due to a niggling fear that I would overspend and not hit my target. On the other hand, I acknowledged that I usually set aside quite a small amount of savings each month to ensure that I had enough for expenses.

When I started recording my expenses by hand, instead of typing them into a tracking app as I usually do, I instantly noticed the extra effort required. The act of taking out a pen (and later on, stylus as I decided to write in my phone) was very deliberate and noticeable to whoever was with me. I came to mentally associate the action of writing with whatever I was about to spend on, making me more conscious before I committed to buying something.

It was interesting having to think about which category my expenses fell into. Not all of them were clear cut. For example, if I needed to have lunch but wanted to eat a pricier meal at a café rather than at a hawker centre, did that count as a need or want? (I decided it was a want.) Or if I was at the supermarket getting groceries, and threw in potato chips, was that also a necessity? (I cut myself some slack and put it down as a need.) And if I was treating my friends or family to a meal, would that count as a need or want? (I assigned it as a need, unless it was an obviously frivolous expense like having high tea with a girlfriend just to “treat ourselves”.)

I also noticed that my “culture” category was quite short in expenses and found myself deliberately (and happily) spending on a book or movie in order to fill out that aspect of my budget.

The emergency category was probably the most obvious, because I could feel that sense of shock/surprise when it happened: my laptop failing and needing repairs, a toothache that required a visit to the dentist.

I tried to reflect on my spending at the end of each week, even if it was just a quick glance over my recorded expenses. Usually, I noticed some sort of spending pattern revolving around whether the “needs” or “wants” were particularly high. I evaluated why that was, asking myself if it was related to how I felt that past week or something that happened.

My recorded expenses became a sort of “diary” in reminding me of what happened each week, and how I spent as a result. If a spending pattern threatened to derail my progress towards my monthly goal, I tried to consider what I could do differently the following week to adjust my spending.

 Read more: Money Journals: How I Saved S$100,000 by Age 30


What I found helpful about Kakeibo was the frank acceptance of the way a person spends being tied to many factors and rationales. Even what belongs to “wants” vs “needs” is not strictly defined and can be viewed differently by various individuals.

The practice of regular reflection, whether when writing down the expense or during the regular assessment of progress, magnifies why and how a person spends. I sometimes hit my monthly savings target, but when I didn’t, I was aware of why. I think, in the long run, this will help me make sustainable changes in my spending habits that result in more savings than the small amount I originally put aside.

I also appreciated how the “culture” category added another dimension to spending, making me aware of the possibility of enriching myself personally.

In conclusion, Kakeibo is a budgeting method that I would recommend for a slower, more attentive way of relating to your finances. Instead of spending heedlessly and feeling guilty when bills come in or, conversely, being excessively frugal, Kakeibo can help to promote a more balanced and forgiving attitude towards managing your money.

Read more: 4 Habits Preventing You From Saving Without You Realising

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