Japanese Financial Journaling: What is Kakeibo?

Have you ever heard of Kakeibo? If not, don't worry - you're not alone.

Kakeibo is a form of Japanese financial journaling that involves asking questions about your money situation. The goal is to help you become more mindful of your spending, save money, and improve your overall financial situation. Some of the questions that kakeibo asks include:

  • How much money do I have available?
  • How much money would I like to save?
  • How much money am I spending?
  • What are some ways I can improve my financial situation?

Kakeibo originated in Japan in the early 1900s as a way for stay-at-home mothers to save money for their families. At the time, women did not work outside the home, so they needed to be mindful of their spending in order to make ends meet. Nowadays, kakeibo is used by gals and guys alike as a way to take control of their finances.

How Can Kakeibo Help Me?

Kakeibo can help you improve your personal finances in two ways: by making you more mindful of your spending and by helping you save money.

Being more mindful of your spending means being aware of where your money is going and why you are spending it. This can help you curb impulse spending and make better decisions about how to use your money. When you track your spending with kakeibo, you might be surprised to see how much money you're wasting on things that aren't important to you.

What's more, there is something to be said for manually recording expenditures. As the folks at Money Crashers pointed out in their article about Kakeibo, there are some psychological implications of writing things out longhand versus typing the same information on a computer.

In addition, kakeibo can help you save money by setting savings goals and coming up with creative ways to reach them. For example, let's say you want to save $1,000 over the next six months. Kakeibo can help you figure out how much money you need to save each month to reach that goal, and it can also give you ideas for where to cut back on expenses in order to free up more money for savings.

Here is a video describing what was learned from a six-month Kakeibo test.

I practiced Kakeibo for six months: Here is what I learned.

How Does Kakeibo Work?

The fundamental principle of kakeibo is simple: Track your spending for one month so that you are aware of where your money is going. Then, at the end of the month, reflect on your spending habits and make adjustments accordingly. For example, if you find that you are spending too much on dining out, you can make a conscious effort to cook more meals at home in the future.

How To Get Started With Kakeibo

The great thing about kakeibo is that it requires very little in terms of supplies or equipment—all you need is a notebook or journal and a pen or pencil! Once you have those supplies, follow these simple steps to get started:

No. 1: At the beginning of each month, set a financial goal for the month ahead. Make sure this goal is realistic; otherwise, you will likely become discouraged when you don’t meet it.

No. 2: Decide what time frame makes sense for tracking your progress towards this goal—weekly or fortnightly works well for most people starting out with kakeibo—and set smaller goals accordingly.

No. 3: Track all income and expenditures in your journal throughout the month using whatever system makes sense for you—this could involve keeping track of every purchase made or simply writing down the remaining balance in your bank account at regular intervals throughout the month; whatever works best for you!

No. 4: At the end of the month (or at regular intervals throughout the month if tracking every purchase seems daunting), take some time to review your journal entries and analyze your spending habits. Make adjustments as necessary; if possible cut back on expenses in areas where you are overspending so that you can reach your monthly savings goal (or come close to reaching it).

No. 5: Rinse and repeat. Kakeibo is an ongoing process; once you get into the habit of tracking your income and expenditures on a monthly basis, it will become second nature after a while. And as they say, “a journey of a thousand miles begins with a single step!” So take that first step today towards taking control of your finances with kakeibo.

The Four Categories

In your financial journal, you will be placing all expenses into one of four categories that can be labeled in a few ways.

  • Needs / Essentials / Survival.
  • Wants / Leisure.
  • Culture / Personal Growth.
  • Unexpected.
Get started with Kakeibo.

Needs or essentials are things like your mortgage or rent payment. Groceries, but not restaurants. Laundry detergent, shampoo, toilet paper, and the like. One of my favorite labels for this is "Survival" since it sets a high bar. Just pick one label for this category -- again needs, essentials, or survival— and stick to it.

The wants or leisure label is for date night, your Netflix subscription, expensive wine, or similar. Again, pick the category name that makes the most sense to you.

The third category is often called culture. Originally, these were things like books or tickets to the theater. I like the label personal growth since to my mind it can include things like a gym membership, online class, or similar too.

Finally, there are those unexpected expenses.

The Four Questions

When you practice Kakeibo, i.e. keep a household financial journal, you are seeking to ask and answer four questions about your personal financial situation.

You will answer two of these questions at the beginning of the month. One question all month long, and one question at the end of the month.

  1. How much money do I have available?
  2. How much would I like to save?
  3. How much am I spending?
  4. How can I improve?

How much money do I have available?

At the beginning of each month, you want to record a few things.

First, write down a starting balance. This is the total of everything you have. It includes savings, investment, and cash.

Next, record all of your expected income. This might be income from your job, a side hustle, and a few nights of driving for Uber Eats.

Third, write down all known and fixed expenses, including which category they belong in. So your mortgage will be listed and marked as an essential or survival expense.

Your aforementioned Netflix expense will be list and classified as a want or leisure. You get the idea.

When you subtract your fixed expenses from your income, you know how much money you have available for the month. You have answered the first question.

How much money do I have available?

How much would I like to save?

The second question —how much would I like to save?— is also asked at the beginning of the month, immediately after you have determined how much you have available.

You want to write this total down. If you want to be proactive, move funds to a savings or investment account, or better still set up automatic savings.

How much am I spending?

The third Kakeibo question --home much am I spending?-- is one you answer all month long. Anytime you spend anything, record it, write it down, and classify it. Was it a want? Was it for personal growth? Did something unexpected happen? Record it.

This can be done in a few ways. For me, it amounted to setting aside time each day to review receipts and the checking account. I copied down and categorized each expense.

It can also be done in "real-time" if you will. You can carry your Kakeibo journal or app with you and record everything you spend as you spend it.

Keep in mind how much money you had available in total and how much you wanted to save.

How can I improve?

When the end of the month rolls around, it is time to answer the final Kakeibo question --how can I improve?

Start with your income estimates from the beginning of the month. If you have a salary, these were probably pretty accurate, but if some of your income is variable you might have been a bit off, so how could you improve?

Did you hit your savings goal? Were you able to save as much as you wanted? Why or why not?

What about your spending? Are there ways to improve? What about packing a lunch or only buying coffee three days per week?

You get the idea.

Kakeibo is a great tool for anyone who wants to get a handle on their finances. It can help you become more mindful of your spending and also give you practical advice for saving money. If you're looking for a way to take control of your finances.


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