Looking for a way to take control of your finances? If so, you may have heard of the Kakebo method. But what is it exactly? And can it help you control your money? Read on to find out!
The Kakebo method: what is it?
The Kakebo method is a Japanese financial management system. It was created by Hisako Takamizawa in the early 20th century and has been used by Japanese households for generations. The Kakebo method is based on the principle of saving 10% of your income each month. This money is then divided into three different categories: savings, investments, and expenses.
Savings can be used for long-term goals such as retirement, traveling the world, or buying property. The investments are intended for medium-term goals, such as starting a business or going back to school. Finally, the expenses are for short-term needs, like groceries or electricity bills.
By following the Kakebo method, you can slowly but surely increase your savings and reach your financial goals. If you are looking for a way to control your finances, the Kakebo method may be for you!
How to order expenses according to the Kakebo method?
The key principle of the kakebo method is that all income and expenses should be recorded in a notebook, making it easy to track spending habits. This information can be used to create a budget that allocates money for necessary savings and expenses. The Kakebo notebook should have three columns. Spend, invest and save.
So here is how to apply the method in real life:
First, determine the monthly financial resources and enter the amounts raised at the top of the list. Then you need to fill in the columns that contain the three categories. Starting with the “Expenses” category, estimate an amount equivalent to monthly expenses such as internet access, electricity, food and transportation. Then, complete the “Investment” category if you have a medium-term project, such as continuing your studies, enrolling in specialized training, enrolling in language courses, etc. The “savings” category must contain 10% of monthly income.
After completing your notebook, consider withdrawing the sum of the two categories “expenses” and “investments”. Set them aside, then hand over your bank card. When you leave your credit card at home, you will be obliged to respect the amount that you have estimated for your daily expenses. It should be noted that the use of cash makes it possible to reduce the accounts to be managed and the bank statements to be analysed. So, you should never forget to use your notebook to take notes of all the expenses. And finally, budget planning should be done on a monthly basis. This allows you to have good visibility of the amounts of money available in your account.
What should you learn from the Kakebo method?
The kakebo method has proven to be an effective way to save money as it helps people become more mindful of their spending habits. Additionally, the kakebo method can also help reduce debt and improve financial security. All in all, it is a great tool for anyone looking to promote their future and project themselves into new ventures.
Using a simple Kakebo notebook is not enough to properly plan your expenses and save. It requires true willpower and awareness. The method is just a tool. Therefore, several rules must be applied for a budget management optimal You also need to fully understand the usefulness of the notes in your notebook.
It is completely normal not to follow the rules during the first use, but if you show patience and perseverance, eventually you will adapt and you will have access to a beautiful reward that is your savings, which you deserve so much!
Another advantage of the Kakebo method.
In addition to managing and planning day-to-day expenses, the kakebo method would be to use this support to plan for longer-term financing. Therefore, it can be used for a whole year as a calendar. The user could thus find himself with a good sum destined solely for his leisure activities while improving various projects that were once on his wish list.
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