Using the Art of Kakeibo to Save Money


Posted on Friday 05 March 2021


The act of spending has become effortless. Debit cards, credit cards, online shopping, PayPal, Apple Pay, and money transfer apps like "Venmo" have made it easy to spend money in an instant.

Plus without having to physically hand over your cash or even open up your bank statement, it’s become quite easy to lose sight of how much you are actually spending.

However, spending wisely is intricately connected to saving wisely—and being able to save is crucial to meeting your financial goals. Whether you want to save for a big purchase (like a new car or a home), put more toward retirement, or simply get a little bit of breathing room, a budget is a powerful tool.

There are countless apps and programs designed to help you learn how to budget, but they certainly aren’t for everyone. If you’ve tried budgeting in the past and haven’t had much luck, it might be time to try the Japanese method of kakeibo.

Kakeibo takes budgeting one step further by helping you stay mindful, present, and intentional about your spending—and it’s been a proven budgeting method for more than a century.

What is Kakeibo?

Kakeibo is a Japanese budgeting method that translates to “household financial ledger.” Originally created in 1904, kakeibo was designed to be a simple, straightforward approach to tracking spending and promoting better saving habits.

What sets kakeibo apart from other budgeting tools (For individuals or even businesses) is its focus on instilling financial mindfulness through a handwritten ledger. Every step is written down, from initial budget creation to daily spending to monthly reflection and planning.

Kakeibo encourages you to stay present and aware about your spending habits, while exposing bad habits and what triggers them. Before you make a purchase, kakeibo prompts you to consider these questions:

  • Could I live without this item?
  • Can I afford this item?
  • Is this something that I will actually use?
  • Do I have the space for this item?
  • How did I find this item?
    (Was it in an online ad that I happened to click on? Did I aimlessly walk into a store because I was bored?)
  • How am I feeling today? Am I experiencing a strong emotion?
    (Am I feeling stressed out? Am I celebrating something? Am I depressed?)
  • How does the idea of buying this item make me feel? How long will that feeling last?

Even if you only ask yourself half of these questions, you are already putting much more thought into a purchase than you normally would.

Unlike budgeting apps or spreadsheets, kakeibo uses a combination of thoughtful planning, journaling, and personal tracking to create a wholly self-directed financial analysis.

How Does Kakeibo Work?

Using kakeibo is incredibly simple and straightforward. All you’ll need to start is a pen and paper—no apps to download, no links to follow, and no passwords to enter. Best part, it works not matter what Canadian city you are in.

Ready to begin? Let’s go! See below for a step-by-step overview of how you can start using kakeibo today.

Step 1: Create your monthly budget.

Before you start using kakeibo to save more money, you’ll need a good understanding of how much money is coming in each month. Write down your monthly income.

Then, add up all of your fixed expenses: mortgage, rent, electric, internet, car payments, etc. Subtract your fixed expenses from your monthly income: this number will represent what you should have available for all other spending.

Step 2: Decide on a savings goal for the month.

Once you have your monthly budget written down, it’s time to choose a monthly savings goal. Don’t be afraid to start out small, as this ensures you don’t sign yourself up for more than you can reasonably handle. Then, break that monthly goal into smaller, weekly amounts.

Let’s say your monthly income is $3,000. After rent and fixed expenses, you have $1,000 in spending money. You could set a goal of saving $500 each month, which means you need to set aside $100 each week. While the thought of putting away a lump sum of $500 might feel overwhelming, breaking it into $100 segments makes this goal much more accessible.

Step 3: Track your spending.

Every time you spend money, write it down in your ledger. That includes everything from the cup of coffee on your morning commute to every online shopping spree.

It may feel tedious at first, and may take some time to get used to—but this is what makes kakeibo so successful. This forces you to stop for a moment, pay attention to where your money is going, and consider the impact of each purchase.

Step 4: Categorize your spending at the end of the month.

Each of your purchases should fit into one of four categories:

  • Needs: These are your essential purchases, such as your housing, groceries, and student loans.
  • Wants: These are fun purchases, but they aren’t absolute essentials. Some examples might be getting takeout, a night out with friends, or a round of golf.
  • Culture: This could be anything from tickets to an art museum to books to digital streaming services.
  • Unexpected: These expenses are the unplanned costs that come up, such as a home repair or a medical emergency.


Once you’ve categorized each purchase, tally up the dollar amount you’ve spent in each category.

Step 5: Compare against your budget.

As part of your monthly review, you’ll revisit the first step in the kakeibo saving system: your monthly budget. Subtract your spending from your monthly budget to see how much you were able to save. Were you able to meet your savings goal?

Step 6: Reflect and assess your performance.

The last step in the kakeibo saving system is what truly sets this approach apart: this is where you will reflect on how you have spent and saved throughout the month.

Celebrate the successes, and don’t gloss over the missteps. How do you feel about the process so far? What has gone well? What hasn’t gone so well? Write everything down.


Here are some questions that can help prompt your reflection:

  • How much money do I have?
  • How much money do I want to save?
  • How much money am I spending?
  • How can I improve?

The ultimate goal of kakeibo is to boost your ability to save, and for many of us, that requires a significant shift in how we think about money.

Writing everything down is a simple, yet powerful way to encourage mindfulness and a new approach to spending—so don’t skip out on this last step!

Benefits of Using the Kakeibo Saving System

It’s cost-efficient.

Aside from the cost of a pen and a notebook, there is virtually no cost to using kakeibo as a budgeting method. There are no membership fees, no app fees, and no consulting fees—anyone can start using kakeibo, making it an incredibly affordable and accessible option for budgeters of all income levels and ages.

It’s simple.

Let’s face it: budgeting can be complicated (especially if you aren’t naturally inclined to digest numbers and figures). And while budgeting apps certainly allow for multiple layers of detail in categorizing and tracking spending, that level of detail can quickly become confusing, rather than helpful.

Instead of sorting your spending and saving into endless categories with Quickbooks, kakeibo simplifies spending categories by sorting everything into four clear, easy-to-understand sections.

It’s realistic.

It isn’t easy to set a realistic, attainable goal, especially when it comes to your finances. Setting a goal that simply isn’t achievable is an incredibly common mistake. If that sounds familiar, know that you are certainly not alone! On average, as many as 92 percent of people who set a goal will fail to achieve it (both financial and otherwise).

Why do so many of us fail to meet our goals? For many of us, it’s the way that we form our goals that is hurting us the most. Goals should be specific, attainable, and measurable.

Simply saying, “I want to save more money” or “I want to be debt-free” is not enough. Give your goal specificity, break it down into smaller parts, and hold yourself accountable to tracking your progress.

If you’ve had trouble sticking to a budget in the past, or if you’re just learning how to budget for the first time, kakeibo may be exactly what you are looking for! By documenting your spending down in real-time, you are training your brain to keep your finances top of mind, which means you’ll start paying much more attention to how you are spending.

Regular reflection on your progress also gives room to celebrate little wins (no matter how small), which can be a huge motivation when you’re cutting back on spending.

Sticking to your financial goals can be tough, but with kakeibo, you’ll be giving yourself the gift of wiser financial decisions—and that opportunity is priceless!