Kakeibo: A japanese method to save money in a realistic way

Different cultures around the world have contributed their knowledge of personal finance. Each of us then analyzes these ideas and decides whether or not to apply them.

The KAKEIBO Method is a Japanese system whose goal is to achieve a significant saving of money through a control of expenses. The KAKEIBO Method is relatively easy to apply, since it is based on self-knowledge, good organization and good decisions. This system is ideal for home economics, then it can be applied to larger businesses.

How the Kakeibo method works

The key to the KAKEIBO system is to know all your expenses, then classify and organize them so that you can finally save money.

  • First you must have a common notebook or a KAKEIBO notebook to write down all your expenses. You can also use an app to control your expenses or write down everything in an Excel sheet.
  • You write down your expenses that you have made in a month.
  • Then you classify the expenses in the following way: survival expenses, leisure expenses, optional expenses and extra expenses.

  • SURVIVAL EXPENSES: food, rent, electricity, gas, internet, cell phone, etc.
  • LEISURE EXPENSES: concerts, theater, movies, etc.
  • OPTIONAL EXPENSES: expenses that are not essential, but necessary, such as clothes, gifts, going out to eat with friends, etc.
  • EXTRA EXPENSES: these are unforeseen expenses such as paying for the repair of the roof of the house, some car repairs, medicines that had to be bought, etc.

Once you are aware of all the expenses you have, compare your expenses with your income and determine the amount of money you want to save.

Apply the Kakeibo method

To determine how much money you want to save you must first look at where in your budget you can save. Ideally, you should control optional expenses and leisure expenses. Really choose which expenses you are willing to cut. You don’t need to stop doing what you like to save money. The key to the KAKEIBO system is to figure out what you spend your money on and what you would like to spend it on in the future.

Once you are clear on that you will be able to determine a realistic monthly savings for yourself.

The KAKEIBO Method seems to be effective, as it is based on self-knowledge of the individual. Once you know what you spend money on and where you could save, you can actually determine how much you can save on a monthly basis.