Sreelakshmi Prasad

Chief Editor

Kakeibo- A Japanese Method Of Budgeting

17 Jun 2020

 5-mins  Read


The world has been turning towards the East, particularly Asia, to learn new ways of efficiency and mindfulness off-late. Asians are known to relatively have practices that perpetuate optimism. Whether it is eating using chopsticks, or exercises such as Yoga and Tai Chi, skincare techniques from Korea, and more.

Kakeibo is another such mindful practice from Japan, that helps you manage your finances.

Kakeibo, pronounced Kah-Keh-boh, refers to the Japanese style of recording your daily expenses and goals by hand. It translates to ‘household financial ledger’. It was introduced by Hani Mokoto, Japan’s notable female reporter in 1904, to help Japanese housewives manage household finances. Today, Kakeibo continues to be used, not just by housewives, but many others as well!

Kakeibo basically revolves around four simple questions, whose answers help you manage your finances:

  1. How much money do you have?
  2. How much would you like to save?
  3. How much are you spending?
  4. How can you improve?

This gives you the overall picture of your finances. This enables you to make better and informed financial decisions.


To begin with, all you need is a book and a pen. It could be any notebook, with some lines to support your categorization. Try not to substitute this with online applications, as the main purpose of this method is to use your hand to write. However, there are several templates available online, which does help you prepare your own little ledger. Once you have your supplies, you are only three steps away from being empowered financially!

STEP 1: Organize your finances

On the first day of every month, write down the answers to the following questions:

  1. How much money do you get every month? – This should include all your sources of income including benefits, salary, side hustles, etc.
  2. How much expenditure do you have? – Include all your fixed expenses such as rent, electricity, monthly groceries, etc.
  3. How much money do you have left? – Reduce your fixed expenses from the total income in order to learn how much disposable income you have.
  4. How much would you like to save? – Write down how much you want to save every month. It could be a small amount as well, it doesn’t matter how much. Add a line to describe what you are saving for.
  5. How much can you spend? – Subtract your savings from the disposable income and you have the amount that you can spend on your discretion. This amount can be divided by four to arrive at your weekly spending budget. 

STEP 2: Record every expense

Always write down every expense you have, as and when you take care of it. You could alternatively, keep the receipts or bills to track them and write them down every week. Each expense needs to be categorized ideally into four different sections as per traditional Kakeibo practice:

Kakeibo Template    
  1. Survival: Things you need to survive such as groceries, electricity, etc, but that don’t have a fixed cost 
  2. Optional: Wants such as eating out, shopping for extra clothes, makeup, perfumes, etc. 
  3. Culture: Things that add value to life, but isn’t a need such as newspaper or magazine subscriptions, gym memberships, birthday gifts, etc. 
  4. Extra: Expenses that come once in a while, such as repair costs, medical bills, etc. 

Taking time to understand why you spend when you categorize helps you understand your finances better, and make spending decisions that are much more satisfactory.

STEP 3: Time to reflect.

Take some time out, every week or every month, to review your notes. Understand how and where your money was spent and if you are happy with the choices you made. If not, you can figure out how to make better choices the next time.

This is an important part of the process as it helps you save without any trouble while improving your financial management skills!


Though Kakeibo may sound cumbersome, it is a practice that seeks to inculcate the habit of tracking your finances. It also encourages you to be conscious and mindful of your spending habits. Writing down expenses blindly at the end of every week and month does help keep track, but Kakeibo does more than just track. It makes you reflect on the way your money comes and goes and gives you more control over your money habits.

Of course, we are all short of time, and this might seem like an elaborate process. The best part is that you can trim it down to suit your needs, as long as you are aware and mindful. The key is to not look at saving money as the money we cannot spend, but rather, as money made by spending efficiently!

Follow the magic of Kakeibo, and prepare to be cast under a spell of good money habits!

Save & Invest Your Spare Change!

More in Roundups

6 Steps on How to Invest in Share Market

5 Mar 2020

 5-mins Read

3- Side Hustles to earn over Rs. 35,000 Per Month

11 Mar 2020

 3-mins Read

What are Index funds: Benefits, Differences and More

11 Mar 2020

 5-mins Read

How to Invest in Bharat Bond ETF?

11 Mar 2020

 3-mins Read