Although already aware of the importance of setting aside a portion of income, but still, there are still many people who have difficulty managing finances. In other words, saving is a difficult thing for the majority of people. Well, if you don’t want to keep going like them, try kakebo.
What is Kakeibo?
Kakeibo is a Japanese money-saving concept of up to 35 percent. This concept was discovered in 1904 by Hani Motoko, a Japanese journalist. Now, the concept of kakeibo is increasingly popular after the writer Fumiko Chiba released a kakeibo guidebook in English.
Compared to other money-saving concepts, kakeibo is simpler. At the beginning of each month, you only need to check how much money you actually have. Check carefully what you get, from a fixed salary, bonus, or other additional income.
Next, plan exactly how much money you will spend, how much to save, and write down what needs to be done to ensure you can fully commit to the plan that you make yourself.
After that, separate money into four categories, namely:
- Survival, namely food, household needs, transportation, rent, and health.
- Optionally, including eating out, clothes, and purchasing hobby items or collections.
- Entertainment like buying a book, watching a concert, or watching a movie.
- Additional costs, namely unexpected costs, buying gifts, or home repair costs.
Simple things that make a difference
Believe me, if you really can commit, you can definitely spend the right money for each category. The good news is that you can even record weekly expenses so you can easily track where your money is going.
Then at the end of the month, check your kakeibo notes to see the last month’s overall expenditure, and check whether your budget plan works or something is wrong, then plan how you will do different things next month.
Separating physical cash into several envelopes makes you less likely to spend it on other things. Simple things like that, can make a big difference. Acting patiently and consistently is what drives the success of the Kakeibo concept.
The concept of ‘necessity’ and ‘desire’
This is the actual kakeibo function: it helps slow down decision making so that you can consider what you will buy in a calm and measurable way.
Kakeibo can also be an exercise to understand the concepts of ‘necessity’ and ‘desire’. You, will know what is really needed and what can actually be removed.
Applying kakeibo is about removing unnecessary things from everyday expenses. Once you get used to it, you will know how much money comes in, think about how to spend the rest, and plan to do kakeibo even better.
