Personal Finance and The Kakebo! Ways to Stay Rich.

Personal Finance and The Kakebo! Ways to Stay Rich.

Have you ever wanted to save money for a trip to Europe, a new car, or something big You can’t afford all at once? Then you know how money has a magical ability to disappear overnight, right after payday. But it looks like the Japanese know the secret to make it stay in your wallet longer, and even multiply there.Personal Finance! The Kakebo and 8 Strategies to get Help

The Kakebo

The Kakebo (ka-KAY-bow) method of budgeting is growing popular all over the world, and for a good reason.
Why listen to the Japanese? A hundred years ago, Japan was a traditional agricultural country – nothing like how we know it now.
How did it manage to become the most technology-savvy country, with a developed economy and one of the highest living standards?
One of the reasons is the high financial competence of the Japanese themselves.

Personal Finance

They’re experts in personal finance. They use Kakebo. This means they don’t buy that third handbag in 2 months and manage to save up to 35% of their income. Sound good? Then be ready to take notes. “Kakebo” translates to “household account book.” It’s a notebook where you write down your income and expenses. Long before any financial apps or digital tables appeared, the Japanese had this system of writing up a budget. And it keeps working today.
The idea of this saving tool is to track how much you earn and spend in detail. Its final goal is to increase your savings. No apps, no technology, no tricky calculations. That’s the point: you rule out everything that’s not necessary and focus on your habits and decisions. This is how Fumiko Chiba, the author of the book “Kakebo: The Japanese Art of Budgeting Saving Money” explains the efficiency of the method.

Kakebo’s Mian Focus

Kakebo appeared in 1904 and grew popular thanks to the first woman journalist in Japan – Hani Motoko, who sold it to a wide audience. Chiba says that even though Japan is still a traditional country in many ways, Kakebo gave women freedom and control over financial decisions. Dozens of books, magazines, and articles devoted to Kakebo are published in the country every year. Kakebo fans know that reasonable budgeting helps you save money. Instead of thinking about things that you can’t afford, you switch your attention to what’s important, and what you can spend your money on.

KaKebo is based on 4 main questions

  1. How much money do you have?
  2. How much would you like to save?
  3. How much do you spend?
  4. How can you make things better?

To draw up a Kakebo-style budget, you’ll need 2 notebooks – a big and a small one. You can buy special Kakebo journals, but any kind will work.
You’ll use the big one to write down your income, and plan expenses and savings. As for the small one, you’ll be carrying it around with you to record all the expenses in real-time, so you don’t forget a single cent. Using the small notebook is easy: you just make a note every time you spend money. You can organize the big notebook as you wish, but it must reflect the following points: A monthly income plan.

It can be done as a table or a bullet list. You’ll need to record all the money you get as income: advance payment, salary, debt return, the money you get from selling a secondhand laptop, etc. At the beginning of the month, you put the income you know for sure you’ll get into the table. You can add notes about the extra money in a different color or in block letters. A monthly savings plan.
You write down how much money you’d like to put in a money box or a savings account. It’s important to decide this amount before you start planning your expenses. A monthly expenses plan. Here, you write down your common expenses: utility bills, apartment rent, and mobile and internet bills. The money that’s left after you deduct common expenses and the sum you want to save should be divided into 4 categories:

Expenses on living.

Here you include food, household cleaning products, clothes, medicine, gas or subway pass, etc.

Culture and education.

Courses, training, tickets to museums, and books will fall into this category.


Having fun will be recorded too, and this might be the black hole eating up your money! This includes meetings with friends, movies, short trips, restaurants, cosmetics, and the clothes you don’t need. You might argue that a person can’t survive without another lipstick and 5 pairs of jeans, but Kakebo is merciless. That’s why it works so well!


It’s for everything else that wasn’t mentioned in the last 3 categories. It’s up to you to decide the ratio between the 4 categories. If you plan wisely, it won’t be difficult to stay within the limits during the month. At the end of each month, you’ll analyze if you’ve managed to follow the plan and save or spend extra money. It’ll allow you to draw up a more exact budget for the next month and see what expenses need to be corrected. Even if you don’t have a big plan to save much, you’ll see where most of the money goes.
For example, you might spend too much on food. How can you spend less? You might think about skipping lunch at a restaurant or cooking at home instead of taking out your dinner. You’ll be amazed at how much you can save on tips only. If a shopping spree is your favorite hobby, you’ll have to face the figures when you write down everything you buy. Half of the joy goes away when you have to record your bills. If you do think big and are already driving a new car in your dreams, here are some other tricks that’ll help you save more.

Personal Finance and The Kakebo! Ways to Stay Rich.


In the evening, put all the odd money that you’ve got in your pockets in a money box. What seems like a handful of coins will turn into a solid sum at the end of the month.


Put all the returned debts into the money box. In fact, it’s not an income. You just get back money that was taken away from you before. After all, you’ve managed to live without it all this time.


When changing money, put a small amount into the money box. 1-2 dollars are enough, later they’ll turn into a bigger sum.


Every time you buy something, round the sum up. Say, if you have a $74 bill, round it to $100 and put the other $26 into the money box. It’s a great tool that’ll allow you to save daily.


Work out a system of penalties for yourself. You can “punish” yourself financially for bad habits like skipping the gym or having an argument with a partner or friend. Each time, put a dollar in your money box. If that’s not enough motivation, let it be $10. But don’t be too harsh on yourself! You’ll benefit from this anyway: either you’ll get rich or you’ll be more disciplined.


Divide the money you’re going to spend during the month into 4 parts. Everything that’s left from the 7-day budget will go to the money box too.


Put off any non-urgent purchases for a month. If you still want to buy it after that, then do it. This will save you from impulsive shopping, which can damage any budget.


Always make a shopping list before you go to the supermarket. This piece of advice is as old as the hills, but who actually follows it? Kakebo fans do, and it works for them. You probably wonder why the most technologically advanced nation keeps writing things down instead of putting everything on an app.


Fumiko Chiba says that Kakeibo makes you focus on your financial goals better than any digital device.
Research shows that we remember something we’ve written down better than something typed on a keyboard. The writing process activates the part of the brain that lets the information pass directly into memory. Typing doesn’t do that: our hands work automatically. That’s why motor memory is almost everlasting. Say, if you want to learn Japanese or French, or any other language, it’s best to write down new words. If you skip that step, they’ll leave your memory as quickly as you close the laptop.

Writing makes the process personal. We internalize everything we write by hand; it becomes more important to us.
So, that explains why high-tech apps might not work as well as an old-fashioned pen and notebook. As you see, the Japanese method of budgeting is simple and efficient. Hundreds of thousands of people around the world have become better off following the Kakebo plan.

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