Pronounced “kah-keh-boh”, this simple, no-frills approach to managing your finances first came to be in 1904 by a woman named Hani Motoko, known for being Japan’s first female journalist. Translated as “household financial ledger,” kakeibo is the perfect method for those who struggle with overspending, especially when they’re bored, stressed, or unhappy about something. While some people can be content with a life with just the essentials, others are keen on their “daily self-rewards”. Regardless, this is easier said than done because bad financial habits are not easy to change. It is deeply cemented into our daily routines and the emotional aspect that is difficult to detach from. However, kakeibo might just be the Japanese trick you need to help you when it comes to saving your money.
Let’s Go Back To the Olden Ways
Like any budgeting system, kakeibo is designed to help you understand your relationship with money by keeping a ledger on everything that is incoming and outgoing. Nonetheless, what sets kakeibo apart from the rest is that it does not involve any budgeting software or apps. If you’re a big fan of bullet journaling, this gives off the same vibe as it emphasizes the importance of physically writing things down as a meditative way to observe and process your spending habits.
To-Do or Not To Do
Following the kakeibo method, before purchasing any non-essential items or things you might buy on impulse, here are some of the questions you must ask yourself:
- Can I live without this item?
- Looking at my current financial situation, can I afford it?
- Will I actually use it?
- Do I have the space to store this in my home?
- How did I find this item in the first place? (Did I see it in an advertisement or did I come across it while walking out of boredom?)
- What is my emotional state today? Am I calm, stressed, celebratory or do I feel bad about myself?
- How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)
In other words, kakeibo forces you to think about your purchases and understand the reasoning behind buying them in the first place. Additionally, it will allow you to conquer your fear by being completely honest with yourself about your “needs” and “wants”. As a result, this will help you make smarter, faster, and more logical decisions about whether something is worth spending money on.
Take note that the purpose of kakeibo is not to cut all the joy out of your life. If you’re feeling down in the dumps, and a bouquet of flowers will cheer you up, get yourself one. However, kakeibo encourages you to be more mindful of your actions and to change your bad habits through small changes. Here are some simple but effective kakeibo-themed strategies to ensure that you spend more mindfully:
- Leave the item for 24 hours. If you’re still thinking about it the next day, then make the purchase. By doing this, you’ll feel a greater sense of satisfaction about your decision.
- Don’t get tempted by the word “sale”. We always fall for it when they put up a huge “big sale” sign. However, that will lead to you buying something you normally would not buy, hence, ask yourself whether you would buy it if it were full price.
- Check your bank balance regularly. Checking your balance will help you feel more in control of your finances because it reminds you of the amount you’ve spent and how much you can still spend.
- Buy stuff with cash. Physically handing over money rather than mindlessly swiping your card will, without a doubt, make you more conscious of what you’re spending. Try taking out a set amount of cash to spend each week.
- Get rid of the temptations. If you start to notice that you’ll spend money when you’re scrolling through Instagram or in a marketing email, then unfollow or unsubscribe.
Kakeibo still allows you to occasionally treat yourself with non-essential purchases but remember to use mindfulness to cut out ones that will only give you temporary happiness. Start making mindful decisions today and invest your money in items that will give you a long-term boost of happiness!