Kakeibo is more than a budgeting method — it’s a financial philosophy centered on mindful, deliberate spending and saving. This sounds lofty, but kakeibo is super simple to practice and tailor to your lifestyle.
Devotees and promoters promise kakeibo users can save 35% on monthly expenses, and while I didn’t hit that exact figure, I was surprised how much cash it helped me save. I definitely got a better sense of my financial priorities.
And besides the cost of pen and paper, kakeibo’s absolutely free.
What is kakeibo?
Kakeibo gets its name from a Japanese term meaning “household financial ledger.” Essentially a kakeibo is a physical budgeting journal. Users answer some financial questions and set savings goals. Then they track their expenses, put their purchases in categories, and review expenses at the end of every month.
The process resembles a lot of best budgeting apps, like PocketSmith and You Need a Budget (YNAB). But there are no downloads, bank account links, or regular notifications with kakeibo — just good old-fashioned record keeping.
More importantly, kakeibo is designed to help you think about your relationship to money and understand why you’re making each purchase. When I can spend hundreds of dollars by clicking a few buttons on Amazon, I appreciate this reminder to slow down.
Where did kakeibo come from?
While kakeibo is still new-ish in the United States, it’s a tradition in Japan. Japanese journalist Hani Motoko wrote about the method in a 1904 women’s magazine. The kakeibo accounting system appealed to her readers, Japanese housewives in charge of their household budgets.
When writer Fumiko Chiba published the guide “Kakeibo: The Japanese Art of Saving Money” in 2018, the trend took off in the West.
According to Chiba and other experts, kakeibo reflects Japanese cultural beliefs about the importance of saving money. Cash plays a ceremonial role. Children receive money as a holiday gift and they’re encouraged to hold onto the cash for purchases that are worth it.
Adults don’t take money lightly either. Compared to other countries Japan has a cash-heavy economy; credit cards, which enable frequent, big-ticket spending, aren’t swiped nearly as often as they are elsewhere.
How does kakeibo work?
Kakeibo is a simple pen-and-paper method of tracking your spending. Here’s how to use it:
Get a ledger
Remember a pen and paper? Kakeibo stays true to its roots in early 20th-century Japan — it requires physical handwriting. Bullet journals work well, but any notebook (or handwritten system you can keep track of) will do just fine.
Calculate your monthly income and subtract fixed expenses
I cheated and used an online calculator for this step.
Set a savings goal for the month
Ideally, this goal amount will come from the income you have leftover after fixed expenses like your rent or mortgage and utilities.
List your spending categories
Kakeibo specifies four “pillars” or categories of spending:
- Needs: the essentials like housing, groceries, car payments, or student loans.
- Wants: enjoyable but not totally necessary purchases (takeout food, hobbies, entertainment).
- Culture: any spending on cultural activities — books, museum fees, concert tickets, TV streaming services, etc.
- Unexpected: other expenses that crop up, like medical bills or home repairs.
Categorize everything you buy
Record all your purchases under their appropriate “pillar” and include the purchase amount.
For me, the sorting process was the most helpful part of kakeibo. When you have to sort something into a category, you give it more thought than you would have otherwise. Separating needs from wants turned out to be harder than I expected!
I’m a big spender in the “culture” category (I like to support the arts) and it was interesting to see those results on paper too — not only how much I spent but which creators and organizations I was choosing to support.
Answer four reflection questions at the end of the month (or week)
Every so often — monthly or weekly — write down your answers to these questions:
- How much money do you have?
- How much money would you like to save?
- How much money are you spending?
- How can you improve?
The last question “How can you improve?” is open-ended on purpose. You’re encouraged to reflect and personalize the answer. Improvement doesn’t just mean finding ways to cut costs — it might mean deciding to spend more on what you really enjoy (or save more for something you’re looking forward to) and spend less on purchases you didn’t value that much. Or you may figure out how to prevent a costly unexpected situation from happening in the future.
The ultimate goal is to increase your savings. Original Japanese kakeibo books came with illustrations of a “savings pig” fighting a dangerous “expenses wolf” all month. You could replicate these drawings in your kakeibo ledger — or get creative and think of your own metaphor.
Repeat as needed
The categories and questions are the same every time. I appreciated this consistency. Even if my circumstances and goals change, my budget planning doesn’t have to.
How is kakeibo different from other budgeting systems?
I found that kakeibo is exceptional — more so than other systems I’ve tried — for considering the motivations behind my spending.
For one thing, kakeibo users write down budget items by hand in real-time. Handwriting improves memory, according to some studies, and it’s a meditative, reflective process. Writing down the details of a purchase takes longer than plugging numbers into a computer or phone. On some level, I’m more aware of what I’m writing and why. (Kakeibo could be adapted for a screen or software program if physical handwriting is a challenge for you. The thought process is the most important part.)
Kakeibo’s category system makes you give every purchase a second look. I couldn’t automate any part of the process — the way I might, for example, enter recurring expenses into an electronic budgeting app and then put them out of my mind. Instead, I had a chance to think about how all my spending reflected my values and priorities.
When I did decide to buy something in the “wants” or “culture” column, I was more confident about making a smart choice, not an impulse purchase.
How can kakeibo help you save money?
Kakeibo keeps your savings goals front and center. Similar to “spare change” investment apps, like Acorns, the kakeibo approach helps you save cash little by little in a way that’s sustainable over the long term. Setting a savings amount I knew I could achieve was empowering.
And kakeibo is designed for long-term financial planning; the four questions required me to think about my future goals. Like any good budgeting system, kakeibo helps you prepare for the future without feeling deprived or panicked in the present.
Who is kakeibo best for?
- Inconsistent budgeters: If you’ve had trouble sticking to budgets in the past, kakeibo’s simplicity and flexibility might do the trick.
- Fearful or reluctant budgeters: Kakeibo is good at banishing the idea anyone is “bad with money.” The method puts you in charge of your spending, giving users more control and confidence.
- First-time savers: The “start anywhere” approach celebrates even the smallest savings goals and motivates you to save more along the way.
- “Envelope” budgeters: Kakeibo’s categories resemble the “envelope budgeting” method where you plan monthly expenses ahead of time and distribute fixed amounts into physical or virtual envelopes. If envelope-style planning works for you, you’ll probably like kakeibo.
Many kakeibo users report they actually started to enjoy saving money. If this method sounds intriguing, it’s a great time to grab a notebook and pen (and maybe your favorite budget beverage) and get started!
If you prefer to budget with a spreadsheet, I have created a free monthly budget spreadsheet for Google Sheets that’s loosely based upon kakeibo.