Kakeibo – meaning “household finance ledger” – was invented by Japan’s first female journalist, Hani Motoko, in 1904. Motoko developed this accounting system for Japanese housewives, because, in Japan, the wife traditionally managed the finances of the household and gave the husband an allowance. The Kakeibo system was designed to make the user aware of their spending habits and help the user take control of their budget. This special attention to mindfulness makes the Kakeibo system unique intended to make the user enjoy their money more.

Japanese culture deems flashy spending to be unseemly behavior, which is quite different from much of western, consumerist culture. Prior to the pandemic, the majority of purchases in Japan were still made with cash. Meanwhile, South Korea and China have largely transitioned to a cashless culture. Although the pandemic has lead many Japanese away from cash-only spending, paper currency is still widely used and has a ceremonial role in Japanese society. I’m sure Dave Ramsey would approve of Japan’s conservative approach to money by living within their budgets, saving, and using cash for their purchases.

The Kakeibo system is centered around 4 questions:

1. How much money do you have available?
   • Write down your monthly take-home pay; fixed expenses; and any debt to pay down.
   • Subtract your expenses and debt from your take-home pay to get your spending money.
2. How much money do you want to save?
   • Write down your realistic savings goals and specify what you are saving for, such as a new car.
   • Subtract your targeted savings amount from your available spending money.
   • NOTE: you plan your savings before your spending to prioritize saving more than just the leftovers.
3. How much money are you spending?
   • First, write down everything you buy.
   • Second, group purchases into the following four categories:
     1. Necessities: food, soap, toilet paper, etc…
     2. Wants: eating out, new clothing, vacations, etc…
     3. Culture: learning, museum trips, books, etc…
     4. Unexpected: injuries, car repairs, accidents, etc…
   • NOTE: using a pen and paper forces you to slow down and be more mindful about your spending.
     • This is similar to the Bullet Journaling system of task planning.
4. How can you improve your finances?
   • Review your spending and categories to see if your spending and saving stayed on track.
   • Assess your monthly budget and mindfully reflect on your performance.
     • Write down what you did well and what you can do better.

This may seem similar to Dave Ramsey’s EveryDollar method. However, Dave Ramsey’s approach has you preplan every dollar that you bring home. The Kakeibo system is more about setting goals, reviewing your spending, and making changes to get the most enjoyment out of your money.

Let me know in the comments below what you think of this budgeting system.