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Kakeibo - A Japanese Budgeting Method

Darcy Dang
January 28, 2021
Kakeibo - A Japanese Budgeting Method

Kakeibo is the Japanese method of saving money

Kakeibo gets its name from a Japanese term meaning “household financial ledger”, which basically means a physical budgeting journal. Users answer some financial questions and set savings goals. Then they track their expenses, put their purchases in categories, and review expenses at the end of every month. The process resembles a lot of budgeting apps. But there are no downloads, bank account links, or regular notifications with Kakeibo — just good old-fashioned record keeping.

More importantly, Kakeibo is designed to help you think about your relationship to money and understand why you’re making each purchase. 

While Kakeibo is still new-ish in the United States, it’s a tradition in Japan. Japanese journalist Hani Motoko first wrote about the method in a 1904 women’s magazine and  the kakeibo accounting system struck a chord with her readers, Japanese housewives in charge of their household budgets. 

When writer Fumiko Chiba published the guide “Kakeibo: The Japanese Art of Saving Money” in 2018, the trend took off in the West. According to Chiba and other experts, Kakeibo reflects Japanese cultural beliefs about the importance of saving money. For example when children receive money as a holiday gift  they're encouraged to hold onto the cash and save it for purchases that are worth it.

Adults don’t take money lightly either. Compared to other countries Japan has a cash-heavy economy; credit cards, which enable frequent, big-ticket spending, aren’t swiped nearly as often as they are elsewhere.

How do I Kakeibo?

  1. No technology - just a ledger !

Remember a pen and paper? Kakeibo stays true to its roots in early 20th-century Japan — it requires physical handwriting! Bullet journals work well, but any notebook (or handwritten system you can keep track of) will do just fine. Similar to bullet journaling, Kakeibo emphasizes the importance of physically writing things down — as a meditative way to process and observe your spending habits.

  1. Calculate your monthly income and subtract fixed expenses. Set a savings goal for the month

Ideally, this goal amount will come from the income you have leftover after fixed expenses like your rent or mortgage and utilities.


  1. List your spending categories. Categorize everything you buy

Kakeibo specifies four “pillars” or categories of spending:

  • Needs: the essentials like housing, groceries, car payments, or student loans.
  • Wants: enjoyable but not totally necessary purchases (takeout food, hobbies, entertainment).
  • Culture: any spending on cultural activities — books, museum fees, concert tickets, TV streaming services, etc.
  • Unexpected: other expenses that crop up, like medical bills or home repairs.

Record all your purchases under their appropriate “pillar” and include the purchase amount.

According to the Kakeibo method, you must ask yourself the following questions before purchasing any non-essential items — or anything you buy on impulse, but might not necessarily need:

  • Can I live without this item?
  • Based on my financial situation, can I afford it?
  • Will I actually use it?
  • Do I have the space for it?
  • How did I come across it in the first place? (Did I see it in a magazine? Did I come across it after wandering into a gift shop out of boredom?)
  • What is my emotional state in general today? (Calm? Stressed? Celebratory? Feeling bad about myself?)
  • How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)

  1. Answer four reflection questions at the end of the month (or week)

Every so often — monthly or weekly — write down your answers to these questions:

  • How much money do you have?
  • How much money would you like to save?
  • How much money are you spending?
  • How can you improve?

The last question “How can you improve?” is open-ended on purpose. You’re encouraged to reflect and personalize the answer. Improvement doesn’t just mean finding ways to cut costs — it might mean deciding to spend more on what you really enjoy (or save more for something you’re looking forward to) and spend less on purchases you didn’t value that much. Or you may figure out how to prevent a costly unexpected situation from happening in the future. The ultimate goal is to increase your savings

How is Kakeibo different from other budgeting systems?

For one thing, Kakeibo users write down budget items by hand in real-time. Handwriting improves memory, according to some studies, and it’s a meditative, reflective process. Writing down the details of a purchase takes longer than plugging numbers into a computer or phone. It can also help you make positive changes by encouraging you to be more present and aware, while also acknowledging the triggers behind your bad habits.

Kakeibo’s category system makes you give every purchase a second look. You couldn’t automate any part of the process — the way you might, for example, enter recurring expenses into an electronic budgeting app and then put them out of my mind. Instead, you had a chance to think about how all your spending reflected your values and priorities.

How can Kakeibo help you save money?

Kakeibo keeps your savings goals front and center. Similar to “spare change” apps like Stash and Acorns, the Kakeibo approach helps you save cash little by little in a way that’s sustainable over the long term. Setting a savings amount I knew I could achieve was empowering.

And Kakeibo is designed for long-term financial planning; the four questions required me to think about my future goals. Like any good budgeting system, Kakeibo helps you prepare for the future without feeling deprived or panicked in the present.

Who is Kakeibo best for?

Inconsistent budgeters

If you’ve had trouble sticking to budgets in the past, Kakeibo’s simplicity and flexibility might do the trick.

Fearful or reluctant budgeters

Kakeibo is good at banishing the idea that anyone is “bad with money.” The method puts you in charge of your spending, giving users more control and confidence.

First-time savers

The “start anywhere” approach celebrates even the smallest savings goals and motivates you to save more along the way.

“Envelope” budgeters

Kakeibo’s categories resemble the “envelope budgeting” method where you plan monthly expenses ahead of time and distribute fixed amounts into physical or virtual envelopes. If envelope-style planning works for you, you’ll probably like Kakeibo.

Many Kakeibo users report they actually started to enjoy saving money. If this method sounds intriguing, it’s a great time to grab a notebook and pen (and maybe your favorite budget beverage) and get started!

If you want to try this method, Click here to download a Kakeibo budgeting template!

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