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How to budget and save money with the Kakeibo Method

We have all heard the phrase, “old is gold.” But did you know that it applies to things other than your dad’s music collection? We are talking about the budgeting technique called the Kakeibo saving method. Budgeting is an art and consistency is key. But it is really difficult to have a constant saving plan given the unpredictability of life and the volatile market plagued with inflation.

Originating from Japan, this budgeting technique is almost a century old and requires just as much technological prowess as chalk and slate.  So, without further ado, let’s jump right into what the Japanese saving method Kakeibo method entails, what it can do for you, and how you can implement it in your day-to-day budgeting plans to build wealth. your wealth-building efforts. 

A brief history of Kakeibo

Kakeibo is a Japanese saving method that translates to ‘household financial ledger.’ It focuses on helping individuals develop healthy spending and saving habits to achieve long-term goals. 

Back in 1904, Hani Motoko, the first female Japanese journalist, came up with this idea. She crafted a technique to help Japanese homemakers keep their monthly household expenses in check. Fast forward to today and you will find that the Japanese saving method Kakeibo has garnered substantial popularity, especially among the younger crowd. 

How does the Kakeibo method work?

To execute the Kakeibo saving method all you need is a pen and a piece of paper. Follow these steps to flawlessly create a monthly budget with the Kakeibo method:

Step 1: Total income

Jot down your monthly income. This is a constant value and should not fluctuate much apart from increments or due to some unforeseen circumstances.

Step 2: Categorize your income

Divide your income into the following categories: 

  • Fixed expenses: Make a list of your fixed expenses. These essential items are indispensable for your survival, encompassing basic needs like food, daily essentials, medical expenses, and transportation costs. And no need to adhere to the pen-and-paper principle here. You can use a calculator if you need it, don’t be shy. 
  • Wants: The next category you should demarcate is your wants. These are the expenditures that add enjoyment to your life but aren’t strictly essential for survival, including dining out, shopping, and the like.
  • Entertainment and other expenses: These are the expenditures that enable you to partake in different experiences in your life. This includes recreational and entertainment expenses such as activities like movies, attending plays, purchasing gifts and decor, and more.
  • Unexpected expenses: The final category includes things like medical bills, repair bills, and other unforeseen things. 

Step 3: Decide on a realistic saving goal 

Using the above data, estimate a number that you can get to comfortably. Don’t set unrealistic expectations as that will do you more harm than good. You need to do some calculations here as well. But fret not, it’s not too complicated. Let’s understand this with a simple example. 

Let’s say your monthly income is about Rs. 50,000. 

The sum of your fixed expenses consisting of, perhaps, your rent, car payments, utility bills, average grocery bills, etc. comes out at around Rs. 20,000. 

The difference is not Rs. 30,000. 

Now, you need to decide how much you want to save. A good starting point will be Rs. 10,000. Always keep this number a bit lower than what you actually think you can save. Set this amount aside and use the Rs. 20,000 for your purchases in the three other categories. 

Step 4: Divide it on a weekly basis

Divide your saving goal by 4, since we usually have 4 weeks every month. If your goal was Rs. 10,000, then you are now allowed to spend Rs. 2,500 every week. 

And that’s how you can implement the Kakeibo budgeting method as your monthly savings strategy. 

Best practices of the Kakeibo method

While the Kakeibo method is quite simple and self-sufficient, there are some additional things you can do in order to further streamline it:

Review and refine: 

Keep reviewing your actual savings and contrast them with your planned saving goals to gain further accuracy in your Kakeibo practices

Analyse your spending habits: 

Once you’ve gained insight into your spending habits and identified where your money is flowing, you’re prepared to address the question, “What can I do to save more?” This involves examining your expenditures and questioning whether you’ve allocated excessive funds to certain categories, thus aiding your savings goals.

Take note of areas where you can cut down on expenses and jot down reminders for future reference. This practice will prove valuable when you navigate your finances for the upcoming month

Delay non-essential purchases: 

Postpone any non-essential purchases until the following month. If the desire for that item persists after a month, take the time to assess its affordability and consider the value it could bring to your life. Once you are sure that you really do need it, only then go for the product

Carry shopping lists: 

Always carry a shopping list for your monthly purchases and try your best to stick by it. This reduces the chances of any potential impulse buys that you might regret later on, especially with overpriced luxury products.

Reconsider ‘on-sale’ purchases: 

When encountering a sale on an item, pose the question to yourself: “If it were not on sale, would I still choose to purchase it?” That should caution you from making unnecessary purchases and protect you against scammy advertising.

Prefer cash payments: 

Cash all the way – try to minimize your online spending through UPI and wallet apps. That’s because it sometimes becomes hard to truly visualize how much money you are spending. The physical cash leaving your hands on the other hand is a good indicator of your expenditure and helps you save more


The Kakeibo method is simple and easy, and you can do it in 15 minutes. There is virtually no downside to investing a bit of your time to save money. If you still need convincing, give it a whirl yourself. Take up that pen and pad lying on the table and start calculating. 

For more money-saving tips and ways to enlarge and diversify your portfolio, visit StockGro. 


What is the Kakeibo Method?

The Kakeibo method is a Japanese budgeting technique that requires you to maintain a journal of both your income and expenses, allowing you to identify areas where unnecessary spending occurs.

Does the Kakeibo method help save money? 

The Kakeibo Method in conjunction with some other money-saving tips and tricks has been a proven solution that has helped Japanese households increase their savings significantly. If you follow it and are strict with yourself, then you too should have no problem extracting the benefits of the Kakeibo Method. 

When should you start using the Kakeibo method?

You can realistically start anytime you want. However, the best time to start would be at the beginning of the coming month. Ideally, you need to keep at it for at least a few months before you see the effects. Consistency is key. If you miss a month, you might need to restart all over again.

What do you need to start with the Kakeibo method?

The prerequisites for indulging in the Kakeibo method include:
– Stationary like pen and paper
– A calculator if you want to save some time
– Knowledge of your total income
– Knowledge of your expenditure in the following divisions:
1. Necessary expenses 
2. Expenses related to wants
3. Cultural expenses 
4. Unexpected expenses 
– Self-control
– Discipline 

Who can use the Kakeibo Method?

Anyone can use the Kabeibo method. As long as you wish to save money and take charge of your personal finances, nothing is stopping you from implementing the Kakeibo method for yourself. 

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