People in Japan are said to be masters of minimal living and have saving habits that let even those earning small salaries save significant amount of money for their future. Even though things are changing with millenials open to spending more than the older generation, there are many lessons one can draw from the Japanese art of saving money, especially their Kakeibo practice which is gradually becoming popular across the world.
Kakeibo is actually a traditional Japanese journal used by the natives to track their income and expenses every month. While there are numerous mobile apps now that let you do the same but what makes Kakeibo special is that instead of logging expenses after one incurs them, it involves planning your intended savings and expenses at the beginning of each month and tracking them every week.
What’s more, experts argue, writing down one’s spending and saving decisions play a role in bringing people closer to their spending habits and help them understand how they can make small changes to optimize their money.
Here are some tips one can learn from the Japanese art of Kakeibo:
- Set saving goals; At the beginning of each month, think about how much you have to spend and how much you want to save. Write it all down.
- Have a monthly income plan. Mention income from all sources down to even the birthday money from the family.
- Note down all your fixed expenses including utility bills, house rent, EMIs etc.
- Divide the money left after deducting intended savings and fixed expenses into four categories – survival or unavoidable expenses, culture and education expenses (like courses, trainings and books), entertainment expenses (movie tickets, meeting friends or trips) and others (for everything else).
- Record your expenses in real time – down to the smallest expense.
- At the end of every week, review your expenses to see if you are sticking to your plan and readjust if there are any deviations. See where you can cut back.
- At the end of each month, analyse your expenses to see if you stayed within the budget, or are even left with some extra money. Based on this, try to draw an even more exact budget for the next month.
Following these tips may help one stay within their budget and save some money as well. For those who want to take it a step forward, they can even buy an actual Kakeibo journal from the market and follow the practice religiously.
