Kakeibo is known as a financial philosophy centered on careful and intentional spending and saving. Kakeibo gets its name from a Japanese term meaning “household financial ledger”. Before, Kakeibo was an accounting method that was popular among housewives in Japan. However, it turns out that this method is useful for anyone to control them in managing expenses.
5 tips you should know to do Kakeibo for saving money.
1. Take a Note for Your Income
The first step you can do is to record all income every beginning of each month, either from regular income like monthly salary or additional income. The Kakeibo method suggests that you record your finances by writing them down in a book so that you really absorb what you are writing down.
2. Set Aside Money then Allocating It to Several Sections
The Kakeibo method suggests setting aside money first for savings, then allocating the rest to different types of expenses. In this method there are four categories of expenses, such as:
- Survival or basic needs (eating, installments, bills, and others)
- Optional or secondary needs (entertainment, playing outside, eating out, etc.)
- Culture or the need for additional knowledge (books, magazines, films, etc.)
- Extra or additional expenses such as (buying friends gifts, funeral money, etc.)
3. Transaction with Cash
Using a debit card often makes a person not aware of the amount of money being spent. For that, try to transact with cash so that you can be more aware of the amount of money that has been spent.
4. Creating Reminders
One of the interesting tips that you can do is to make a reminder in your wallet with the words “do you really need this stuff?”. This can help you to consider before making a shopping transaction.
5. Wait 24 Hours Before Purchasing Items
Japanese people usually have a long consideration before buying goods. You can do this by thinking for at least 24 hours to see if it’s something you really need or just want.
Source: CNBC, Medium