The Japanese way of saving money — and it completely changed how I spend and save my money

Image for post
Image for post
Pic by Sharon McCutcheon from

Have you ever heard about minimalist living?

Saving money is an art. No matter how much you feel you’re scrimping, in the end, you’re always left with nothing more than a few dollars in your savings account. In my experience, a huge chunk of monthly income goes on rent, bills, travel costs, and groceries. Sometimes we spend a lot of money on unnecessary entertainment and things we don’t even need.

You are not alone in this chaos.

Kakeibo — A Japanese “budgeting journal” helps you to keep an eye on your incomings and outgoings.

It’s basically a three-step process —

Save, Reflect , Improve

  • Is it really necessary to buy this item? Can I live without it?
  • Do I have alternatives? Can I build it myself?
  • Based on my financial goals, can I afford it?
  • Will I actually use it? If yes then where?
  • Since I don’t want to clutter my house, do I have space for it at my home?
  • Being a techie myself, I started questioning is the technology affecting my purchasing moods or choices by throwing ads based on my browsing history?
  • Is my emotional state affecting my mood?
  • Would I feel excited once I buy this item?

These questions helped me a lot. For the kind of foodie I am, I used to eat out every day with my friends, over a meeting or just when I felt lazy. One day, I just invited my friends over dinner and cooked the food myself. My friends loved the food and asked me to cook more often. By the end of the day, not just I loved the food, I also calculated the time I invested in cooking and the money I spent on the food every day.

I was shocked!

Over a period of 12 months, I saved around $10,000

  1. At the beginning of each month, you sit down with your kakeibo and think actively about how much you would put under your savings and what are your savings goals for each month.
  2. Then in the space given by Kakeibo, you can jot down your weekly spending and reflect on the month just gone.This simple act of completing your kakeibo ensures that you reach your savings goals by saving every day, while also giving you the opportunity to improve every month.

The “kakeibo monthly cycle” depends on four questions:

  1. How much money do I have available?

How much do you earn monthly after taxes ?

2. What are my savings goals per month?

You can start small and then progress. Like I started with $30 and for every, other days, previous day-saving amount + $1 which means $31 the next day, then $32 and so on. I created this loop and it worked well for me.

3. How much am I spending?

Make a priority list of the necessary things you cannot live without.

The kakeibo approach subdivides expenses into 4 key areas:

Image for post
Image for post
4 Key areas (Image source and credits: Pinterest)

1.Survival mode(things you can’t do without, eg. rent, bills, and food),

2. Entertainment and culture ( Amazon Prime, Netflix, etc),

3. Optional (things you don’t need but choose to do)

4. Extra (unexpected expenses such as repairs and replacements, birthdays).

You can create your own key areas, for example, I value fitness more than entertainment and culture, so, a gym membership is more important to me than a Netflix membership. So, in short, you can and customize to suit your lifestyle.

Basically using the Kakeibo method, you can weigh your Needs vs Wants. Don’t give up what you want most for what you want now. This way you can put more money in your pocket every month and it’s one of the quickest way to identify areas of wasted spending to help you succeed in meeting your savings goals by giving you a broader perspective about your spending habits.

Remember — saving money is an art.

Image for post
Image for post
Keep these questions in your mind (Image source and credits: Pinterest)

Thanks for Reading. Keep Saving (wherever it’s necessary) :)

Written by

🇺🇸,World Traveler,Women in Tech,Sr. SDE-Earning my bread using 0&1,Coursera Instructor ML & GCP, Trekker, Avid Reader,I write for fun@AI & Python publications

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store