Kakiebo: The Japanese Art of Budgeting
You’ve probably already heard about Marie Kondo and the Japanese art of decluttering your life, but did you know you can use another Japanese organizational principle to keep track of your budget? Kakeibo is a budgeting tactic that aims at helping you be more mindful of what you are spending so you can start saving a little bit here and there. Those small savings will add up to major overages over time. So, how do you do it?
What is Kakeibo?
Kakeibo is a 100 year old practice. Part mindfulness, part budget, and part journaling, it challenges adherents to take a close look at their budget to gain a better understanding of what is going on, what can be saved, and where things are going wrong. The entire practice is built off of a journaling concept but utilizes four pillars to help you organize your spending.
What are the pillars?
Pillars are categories that your spending falls into. To make things easy, everything is divided into four categories. The categories are as follows:
- Survival: The bills you have to pay to keep a roof over your head fall into this category. Your groceries, medical bills, and rent are part of this category.
- Optional: This category includes everything from eating out, to buying new clothes. These are items that you don’t really need but want to shell out for. Think of these as the little things that make your day better.
- Culture: Anything from concert tickets to your cable subscription fall into this category. Anything you deem as entertainment would be placed into this category.
- Extras: Extras are any one-off expense. Whether you had to get new brakes for your car, or your friend had a birthday bash, you’ll want to track the expenses in this category.
How do I practice the art?
You’ll need a notebook and some pens, that's all. If you don’t want to go out and buy a journal specifically designed for the purpose (they do exist), any notebook that allows you to create a monthly overview will do. Each month you should start off with how much you will bring in, how much you’d like to save, and how much you will be spending.
Each day you’ll jot down what you’ve bought and then place them into the separate categories. At the end of the month, you’ll tally up your total and see how close you got to your goal. The first month or two is all about setting a baseline, then you can try improving on your spending by really reflecting on how the month went and what small expenditures you can cut out of your daily spending.
What’s the point of Kaikeibo?
Maybe you already follow a budget. Maybe you are already tracking your spending in an excel spreadsheet or through your bank app. While those methods are great for getting an overview of what is going on, Kaikeibo invites adherents to really write down everything. By doing so, you’ll be more mindful of your spending and can look back on months that didn’t go so well so you can understand what happened. It’s a great way of becoming more in tune with your spending, and thus, increasing your savings.
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