What is the Kakeibo Method? Japanese Style Saving Tips

The Kakeibo method is a financial management method from traditional Japan that is worth considering for those who need a savings guide using the Kakeibo method. 

This term refers to a technique for recording and planning household finances that is considered effective. But what exactly is the Kakeibo method? What steps should be followed? Let's find the detailed explanation below!

Understanding the Kakeibo Method

According to MoneyCrasher, Kakeibo is a method of recording finances with the aim of achieving financial targets. It emphasizes the use of pen and paper as an alternative to financial recording applications. 

According to CNBC, manual recording and financial planning have a higher potential for success. By consistently recording expenses and financial goals, it will subconsciously form a habit of considering expenditures to achieve those goals. 

Discovered in 1904 by Motoko Hani, this method is believed to help reduce expenses by up to 25%.

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Kakeibo Method Guide

The Kakeibo method is a simple financial management system that involves detailed recording of expenses and income. 

The first step is to record the initial income and expenses of the month, determine the desired amount of savings, and record daily expenses in detail. 

After that, regular evaluations are conducted to ensure that expenditures are in line with the plan, with an analysis of financial habits for improvement. 

This method aims to increase awareness of daily expenditures and optimize savings and financial planning for the future.

How to Manage Finances with the Kakeibo Method

The Kakeibo method is a simple guide to managing finances with steps such as setting financial goals, recording income, detailing daily expenses, and making a monthly spending plan. 

Expenditures are grouped and assessed weekly, while reflective questions help understand spending habits. Monthly and annual evaluations are necessary for adjustments and setting new goals. 

Involving the family, maintaining consistency, and rewarding oneself are part of this process to enhance financial awareness. This method aims to provide structure and a better understanding of personal financial management.

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Recording Steps

The steps in the Kakeibo method are as follows:

1. Begin recording at the start of the month by knowing the incoming income and estimating certain expenditures, such as installment payments.
2. After recording expenditures, determine the amount you want to save from the remaining money available.
3. Detail daily expenses carefully, recording each expenditure according to the previously determined categories.
4. Conduct evaluations and analyses of financial activities performed. Review expenditure records to ensure they align with the plan made earlier. Evaluations are conducted daily, weekly, monthly, and annually. 

Use the expenditure records as a guide for future improvements. If expenditures align with the budget and there is still some left, then the Kakeibo implementation has been successful. However, if not, it should be improved in the following month.

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Kakeibo Method Saving Tips

• Consider Carefully Before Buying Items

Consider the necessity and benefits of an item before purchasing to avoid impulsive or unnecessary purchases.

• Frequently Check Account Balance

Regularly check your account balance to ensure accuracy and control your spending.

• Make Transactions Using Cash

Using cash for transactions can help control spending because it is more visible and easier to monitor the amount spent.

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• Creating Reminders in Your Wallet

Including reminders or notes in your wallet as a reminder of savings goals or to limit spending.

• Analyzing Spending Habits

Evaluating and analyzing personal spending habits to identify areas where spending can be optimized or reduced.

Kakeibo Method Saving Tips Improve your saving skills with effective Kakeibo tips! Learn how to manage your finances better to achieve your financial goals. Also, discover an easy, safe, and fast way to send money to Japan using the Easylink service here!