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Japanese Kakebo budgeting system


If you are aware of the need to keep track of expenses, love notepads and handwriting, one of the Asian ways to save will suit you. In this article, we will talk about how the Japanese Kakebo budgeting system works.

Why financial literacy is important

Financial literacy is the knowledge, skills and psychological attitudes of a person that regulate his behavior in the field of finance. This, for example, is the ability to interact with banks and credit organizations, analyze the current economic situation, and use effective monetary instruments. In addition, knowing at least the basics of financial literacy allows you to set realistic goals, save money and increase it.

If not, as this knowledge is also called, a “financial streak" a person can fall into a debt hole, and as a result come to a low quality of life. Lack of financial literacy, and hence money, often leads to the degradation of everything else. Without them, it is now difficult to get a good education or, for example, high-quality medical services. The ability to earn money, however, on the contrary leads to success in all other areas.

According to a study by the NAFI analytical center, which was conducted in 2017, our country took 12th place in the financial literacy rating. The result is slightly below average: we overtook Mexico, Argentina, Italy and several other countries. In 2020, we ranked 9th among European countries. However, this situation means that we know only the basics of economics.

Compatriots have an idea about the change in the value of money, the percentage of payments on a loan and the calculation of compound interest. At the same time, we know very little about how to save money, diversify income and invest.

At the same time, Canada, China, Korea, and Japan are consistently leading in such ratings. This is because they manage finances at the household level. Kakebo is one of the effective systems.

Japanese Kakebo budgeting system

What is Kakebo and how did the system come about?

Kakebo is a family budgeting system invented over 100 years ago. It is based on the principles of efficient money allocation and financial planning. Simply put, these are methods of accounting for expenses and income using tables.

The author of the system is the first Japanese journalist, feminist and author of the first Japanese women’s magazine, Motoko Hani. It was in Woman’s Friend magazine that Motoko talked about how to save money and record your expenses. Over time, the system became popular in Europe, where the economy of the Japanese was surprised. For example, now the Spaniards have adapted the system for themselves and even invented heroes for it: a pig that represents your savings, and a wolf that symbolizes wasted money.

The term Ka-ke-bo itself means "book of household finances" and was first used in 1904. For 50 years and within just a few years. By the middle of the 20th century, the Japanese kakebo economy system gained popularity and became firmly established in Japanese life.

Rules for competent management of the Kakebo family budget

In fact, this is home accounting, the essence of which is to fill out a table once a month. The table consists of an income plan, such as salary, regular expenses, savings plan. Expenses can be rounded up to calculate faster without a calculator.

Income, according to the author, should be divided. Firstly, you need to set aside money for planned expenses, and secondly, allocate at least 10% of finances for savings, and spend the remaining amount on current desires.

Operating expenses are grouped into four columns:

  1. Household: for transport, household, food, children, etc. ;
  2. Leisure: tourist trips, visits to cafes, cinema;
  3. On cultural development: books, training courses, exhibitions and museums;
  4. Additional costs: repairs, health.

Over time, you will begin to see the big picture and understand why it is not possible to achieve financial goals. It often happens that we spend money on momentary desires: new books, regular visits to a cafe or buying sweets. At the same time, the problem is not in the purchases themselves, but in the fact that we make them before we have invested or set aside some of the money.

Additional nuances

In addition, the author of the system suggests that every time after visiting shops or cafes, set aside a trifle, and from each large bill that has been exchanged, also postpone change. Without cash, following this advice is more difficult, but you can, for example, transfer change from large purchases to your account.

Another important tip: you should try to plan fixed expenses between weeks as evenly as possible and not go beyond the indicated amount. The remaining money can be used at any time or put into a savings account.

There are also a few other tricks:

  • Try to save small amounts daily;
  • Use money to change habits. Create, for example, a system of fines: for a smoked cigarette if you quit smoking, or an extra candy if you are on a diet. You will benefit in any case: either, finally, you will get in shape, or increase your bank account.
  • Postpone non-urgent purchases for 30 days. Sometimes in a month you realize that you don’t really need a thing. If the desire remains, feel free to buy.

Keeping a diary on paper is not very convenient for many, but you can fill out a table on a computer or phone. In addition, there are already special applications such as “Kakebo: Budgeting and Spending Tracker” – there are several sections and automatic calculation that make the process of accounting for finances even more convenient.

Japanese Kakebo budgeting system


When buying things, ask yourself questions: do you really need it? Will you use this item in the future? The Japanese Kakebo budgeting system helps you think about why you want to buy something in the first place. Maybe the desire is caused by good advertising or high spirits?

Saving and budgeting is extremely important for those who want to become successful, and for those who have already achieved it. Thanks to these financial instruments, about 30% of households in China and Asia have savings. For comparison: in Europe, only 7% of families were able to save significant amounts of money. Savings gives everyone the opportunity to avoid debt and achieve their goals.

Post source: kakzarabotat.net

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