Kakeibo: A New Way To Budget

Do you struggle to save money? Have you tried a dozen different budgeting methods, but nothing seems to work? Then you might want to consider a little strategy called kakeibo.

What Is Kakeibo?

Kakeibo comes from a Japanese phrase for a “household financial ledger.” It’s part budgeting strategy, part financial philosophy. As Money Under 30 explained, it helps practitioners become more mindful about their spending and saving. While these might sound far fetched, it’s a simple strategy that you can quickly adapt to your lifestyle.

Kakeibo is simply a journal you use to track your budget and finances. You start by answering a few questions and establishing goals. Then, you follow your expenses, categorize your purchases, and assess it at the end of the month. 

Kakiebo is similar to many budgeting tools, but unlike most apps and software, it is completely free and requires nothing but pen and paper. It also offers something that other things don’t: a chance to reflect on your relationship with your finances to learn why you make individual purchases. 

How Does Kakeibo Work?

Get A Notebook

It doesn’t matter what kind of ledger or notebook you use, as long as it’s something you won’t lose.


Total Your Monthly Income

After you determine how much you bring home each month, subtract your expenses that stay the same each month.


Pick A Monthly Savings Goal

The amount you decide to set as your goal will come from your disposable income, which is the money left after paying fixed expenses like your car payment or housing bill.


List Your Spending Categories

In kakeibo, there are four spending categories:


  • Needs, which are basics such as rent, mortgage, good, student loans, credit card payments, etc.
  • Wants: Discretionary spending such as dining out, hobbies, entertainment, etc.
  • Culture: The money spent on cultural activities such as books, museums, concerts, streaming services, etc.
  • Unexpected: Home repairs, medical bills, or other surprise expenses


Categorize Your Purchases

Write down your purchases (and their amount) under the corresponding categories. This is where the mindfulness aspect of kakeibo comes in. Categorizing your spending offers a moment of reflection about what constitutes “need” versus “want” and can help you determine if you need to cut costs in a particular area.


Answer The Reflection Questions

Whether you do it every month or every week, a core part of kakeibo is answering these questions — and writing your answers.


  • How much money do you have?
  • How much money do you want to save?
  • How much money do you spend?
  • How can you improve?


The final question is intentionally open-ended because it motivates practitioners to think deeply about their response. 


Improvement is more than reducing expenses; it may also mean spending less on less-important purchases and more on things you love or saving for something meaningful. Alternatively, this last question could help you create a plan to avoid an unexpected expense from occurring down the road.


The primary goal is to save more money. The first copies of Japanese kakeibo guides (which emerged in the 20th century) included depictions of a “savings pig” going up against an “expenses wolf” every month. These images may help you rethink your perspective on spending and saving.


Rinse And Repeat

Kakeibo is as simple as that. The questions and categories never change. That consistency can help you as you work toward financial stability. 


How Does Kakeibo Help You Save Money?

This budgeting method helps you save money by helping you stay focused on your savings goals. Just like apps such as Stash and Acorns, kakeibo enables you to build your savings incrementally — but most importantly, sustainable. Establishing a realistic savings goal you know you can reach within the month can encourage you to set larger objectives over time. 


Kakeibo is specifically meant to help you in the long-term. It gives you the support you need to plan for your future but doesn’t make you feel like you’re giving up too much in the present.


Who Should Use Kakeibo?

Kakeibo can work for anybody, but there are a few people who stand to benefit the most.


  • Inconsistent budgers who have struggled to follow a budget before
  • Hesitant or fearful budgeters who think they’re “bad with money.” Kakeibo empowers you by thinking about money differently so you can boost your confidence in your finances
  • First-time savers 
  • Fans of the envelope method. Kakeibo’s categories are similar to the famous envelope budgeting strategy, which can make it easy to transition to this method


If you’re looking for a new way to save, then consider learning more about kakeibo. 


  • Begen, Amy. “Kakeibo: The Japanese Budget Method Explained.” moneyunder30.Com, 9 Sept. 2020, www.moneyunder30.com/kakeibo-the-japanese-budget-method-explained.
Ian Schindler