This method or technique can be apply to anyone; students, housewife, office workers, entrepreneurs, and etc. Whether you’re rich or poor, saving money is very important. With this method, all you need is a notebook and a pen. You don’t have to be a great mathematician and it is not a rocket science. All you need to do is to be mindful on how you spend your money wisely.
Kakeibo is a Japanese term for “household financial ledger”. It is a physical budgeting journal and an accounting system. It is a way of tracking your finances and stick to your budget per month. It includes some financial questions, set saving goals, tracking your expenses, purchases in categories, and review expenses at the end of every month if you save more or you spent a lot (which it leads to losses).
This system and concept was created way back 1904 by a Japanese journalist, Hani Motoko, for housewives. It is designed to control of your budget and remain more mindful of your expenses. Kakeibo promises an automatic saving of 35% on the household finances and learn how to use. It’s easy and simple: record every expense and follow the instructions.
Wanna know? No worries! Remember, it’s never too late to save than never at all. Always bring a pen and a pocket notebook if you don’t have your phone with you. I will include the format for this method so that you can have a copy with you and some tips to save more money. Start to save now, not later.
Kakeibo has 4 Core Questions:
How much money do you have available?
How much would you like to save?
How much are you spending?
How can you improve?
or
How much money do you want to spend?
How much would you like to save?
How much money are you spending?
How can you improve next month?
Kakeibo’s 4 Spend Categories:
By grouping your spends under these categories, you become more mindful of your spending habits and avoid wasting money on things that are not in alignment with your goals.
• Needs / Survival – Things you can’t live without like the basic needs, utilities, etc.
• Wants / Optional – Purchases you enjoy but don’t need like take-out meals, new perfume, etc.
• Culture – things like visiting tourist places, cinema, shows, etc.
• Unexpected / Extra – Unanticipated expenses like a doctor’s visit, car or motorcycle repair, etc.
How to use Kakeibo?
Kakeibo combines planning, journaling and keeping a ledger to bring mindfulness and attention to your spending habits. Here’s the step-by-step guide using your Kakeibo.
1. ESTABLISH YOUR BUDGET / FIX A BUDGET
At the beginning, your expenses from your income to determine how much you have for all other monthly spending. Simply, INCOME – EXPENSES = SAVINGS.
2. SET YOUR SAVINGS GOAL FOR THE MONTH
Set realistic monthly goals and write or jot down what are you saving for. Set aside your so savings by deducting your goal amount from your available spending money. Simply,
GOAL/PROJECTED AMOUNT TO SPEND – ACTUAL SPENDING MONEY = LOSS/SAVING.
3. KEEP TRACK OF YOUR SPENDING
Ever time you make some purchases, jot them down in a ledger. Track your spending real-time. This will help you slow down, pay attention to the present moment and to think about the future impact of your spending
4. CALCULATE MONEY SPENT EACH CATEGORY
At the end of the month, determine how much money you spent on needs, want, unexpected expenses, and cultural purchases.
5. CALCULATE MONEY SPENT AND SAVED
Add up all your purchases and deduct the amount from your total budget (Step 1). This number is the amount you saved. Compare it to your savings goal amount.
6. ASSESS YOUR PERFORMANCE
Another component that separates Kakeibo from other budgeting method is its mindful approach to reflecting on your performance. Did you meet your goals? If yes, write or jot down what went well this month and how you can carry your success forward. If not, write down the reasons you didn’t meet your goals and how can you improve next month.
Let me give you another and simple format for Kakeibo for personal budgeting
1. First Sheet
2. Second Sheet
3. Third Sheet
TIPS FOR MASTERING THE KAKEIBO METHOD:
1. REMEMBER TO BE MINDFUL
Pay close attention to your spending and think first whether or not your purchases make you happy and satisfied and not regret later.
2. WRITE OR JOT DOWN YOUR SPENDING AS YOU GO
Keep your journal with you throughout the day and jot down your spending as you make purchases. This will help you be mindful or how you make your money spent.
3. EMBRACE SETBACKS
Didn’t meet your goal for the month? Try not to be discouraged. Reflect on your reasons for overspending and move forward without judgement.
4. MAKE SURE YOUR FAMILY JOINS IN
Everyone in your family, friends, or colleague can keep their own Kakeibo as long as they have their own goals. Kakeibo works best as a personal budgeting system, but that doesn’t mean the people you knew can’t join in.
So, 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 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.
Other basic formulas for you to use:
Income – Savings = Expenses
- You can use for expenses whatever is left after subtracting the savings from your income.
Income < Expenses = Loss
- Obviously, if your expenses are higher than what you earn or your income, it really leads to losses.
Income > Expenses = Savings
- Basically, if your income is higher than your expenses, you can save a lot.
Tips to save extra money according to financial experts:
• Pay your bills on time
• Make a list before shopping
• Do not bring the kids when shopping
• Always use cash and not credit cards
• Buy generic products whenever possible
• Ride your bicycle whenever possible
• When distance permits, take a walk instead of taking a ride
• Bottle your own water, avoid soft drinks, if possible
• Drink water before eating
• Plan vacation ahead of time and look for package/promo deals
• Keep distance from lavish, high-roller friends
• Set a budget and stick to it, as much as possible
You can check the awesome video and testimonials with this link:
https://m.facebook.com/story.php?story_fbid=1557910341072591&id=500689923461310
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