Your resolution at the beginning of the month is to spend wisely and help load up that savings account, but come month-end, you’re so cash strapped that the only meal you can afford is McDonald’s? We’ve all been there. Saving money is hard. There’s no denying that. And what makes it worse is the smooth process - you can use your gazillion cards or E-wallet and spending is seamlessly carried out! Then there’s rent and electricity bills that must be cleared month on month. If you’re facing the same issue, say hello to Kakeibo, the Japanese art of saving money... It really works!
The word Kakeibo translates to ‘household financial ledger’. While it’s being talked about now and is considered the trendy way to save money, it was invented back in 1904 by the first Japanese female journalist, Hani Motoko. It is only recently that the first book in the English language on Kakeibo has been published and it’s written by Fumiko Chiba.
An overview of the Japanese art
The concept of Kakeibo is as simple as this. At the beginning of every month, you pen down what you will be spending and saving on, and at the end of the month, you reflect on the process and how closely you followed the plan. That’s it!
How to make Kakeibo work
Focus on where you will be spending
In her book, Chiba has highlighted that one needs to spend well in order to save well, and vice versa. The idea is to budget in a meticulous manner and focus on all the things you can have if you follow this, instead of focusing all that you cannot have if you don’t follow it. Giving it a positive spin is the key.
Instead of swiping your card or using your E-wallets that make the entire spending process so easy and simplified, keep envelopes of cash and write down on each envelope what the money is to be spent on. This won’t only help you adhere to your budget plan, but parting with cash makes it more real and one is more conscious when hard cash goes out as opposed to swiping their cards.
Use a pen and paper
In a world where excel is where all your data - personal and professional - is stored, Kakeibo urges you to jot down on a piece of paper your budget for the month and where you choose to save and spend your money. Having this with you in physical form will make you go through it more often and make you more conscious of sticking to it. Note down what you have on you, until the last rupee in your pocket, and plan the month accordingly. First, take into account your fixed expenditures like rent, electricity, water bills etc. When you reach the sum that you have left, plan how much of it you’ll want to spend and save.
Scrutinize your spending/saving behaviour at the end of the month
This is of utmost importance if you want to practice this the right way and subsequently for this to really work for you. The idea is to scrutinize your spending and saving for the past month, identifying your weaknesses and successes, and setting goals for the following month.
Even if you end up saving a very tiny amount, remember that everything adds up and it will eventually be a significant amount.