Kakeibo: How to save money and manage your finances according to this Japanese method
Dollar dollar bills, y'all
Money is a troubling paradox. Especially when its sole existence has the power to solve and ignite problems all at the same time. More than anything, it's deeply personal, that at times, it's even difficult laying out all your cards in front of someone as close as your significant other. So while managing my finances and navigating this funny little thing called adulthood, I've found help in apps that track spending, spiels from banks on how to grow your wealth, and of course the all-knowing wisdom from my parents — which can be easily summed up: "Stop spending on things you don't need." However, nothing seemed to stick around long enough.
And with the cult success of fairy-like Marie Kondo (who despite my issues with her unorthodox method, did trigger a cleaning spree at home on my own), I veered into Kakeibo, a Japanese concept of saving money. It was a concept created by Hani Motoko, and recently published in English by writer Fumiko Chiba. And here's how it goes.
It involves writing by hand
We hardly write anymore. At times when I'm asked to fill out forms at the airport, my hand experiences a strange motion before my mind can keep up that I'm not furiously typing on a keyboard. So Kakeibo brought me back to the romanticsm of pen and paper. You start off each month by listing down the plan — what will you spend on, what you're going to save, and how to reach that goal.
The process forces you to plan ahead, and set realistic goals for the month ahead. It was daunting, so I gave myself a good healthy amount to spend on, just so I didn't overestimate myself, or lack of self-control for that matter.
Ask yourself questions before buying
Last month, I had my eye on a bag. And was tested by these questions.
- Can I live without this item? - Yes
- Based on my financial situation, can I afford it? - Yes
- Will I actually use it? - Not all the time, but enough
- Do I have the space for it? - Yes, I think?
- How did I come across it in the first place? - I was bored while scouring the web.
- What is my emotional state in general today? - Calm
- How do I feel about buying it? - Excited, but nervous as I'm not sure if it's a responsible purchase.
Sit on it for a day before making the purchase
Did I still feel the same the next day? Not as much.
Verdict: I did not make the purchase.
Be honest about your musts and wants
As the method dictates, pen this bit down. It's hard to be honest, because most of our 'musts' typically turn out the be 'wants'. Like lofty desires to travel and see the world. Arguably, my urge to work out five times a week on ClassPass could have two sessions swapped out for free sprints in the park. That, and splurging on transport when I was too lazy to commute after a long day. $5 coffees? Not a must, even if I needed to have a caffeine boost everyday in order to function. As that can easily be replaced by a cheaper kopi option, which can save me about $3 with each cup.
'Musts' include expenses for food, phone bills, monthly tithes to the church, allowance for my folks, and a deposit into my savings account.
Swap out card for cash
This was the hardest to work with, especially when I operate most days without my wallet in hand — God bless Apple Pay. But it's also a dangerous way of spending, when you don't physically see the money deplete, even the action of handing out your credit card is now obselete with your iPhone taking care of everything.
I limited myself to surviving $100 a week in cash, which would cover food expenses (including the occasional second cup of coffee) and transport. With this mapped out, I planned my schedule accordingly — that meant shifting appointments around, just so that I wasn't heading out for dinner everyday at some bougie place.
Fact is, there were no fancy meals that I could have, if I didn't want to bust my budget. But even if I had to, that meant being mentally aware of the excess. As compared to being on autopilot, tapping my smartphone without a care in the world.
Even if you aren't able to fully adopt Kakeibo, just try out this method. The cash diet, truly works.
Check your balance regularly
A painful process. Because you're basically facing off reality in numbers, where you'll see more ' — ' than ' + '. This step was really more of a guilt-trip, especially if you're constantly pay-waving your purchases.
But while you're studying your statements, come up with goals to trim the fat. Write it down, alongside your musts and wants. It's a good thing that online shopping is no longer a threat within my spending habits, but I for one, could do a lot better without indulging in $5 flat whites everyday.
Check out Kakeibo: The Japanese Art of Saving Money by Fumiko Chiba for more.